Security demand at transit check-posts requires statutory preconditions and brief disclosure of reasons to the transporter.

Security under section 76(4) of the Assam Value Added Tax Act, 2003 may be required only when the prescribed conditions precedent are satisfied, namely that the consignment documents are incomplete or incorrect, proper ownership and destination details are not furnished, or the transporter lacks a permanent address in the State. The power is not routine and must be exercised in a quasi-judicial manner. Fairness further requires that the reason for insisting on security be communicated to the affected person, at least briefly at the check-post, to prevent arbitrariness.

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Issues: Whether security under section 76(4) of the Assam Value Added Tax Act, 2003 can be demanded only when the statutory conditions are satisfied and the reasons for such demand are communicated to the person concerned.

Analysis: The power to require security is not routine and arises only when the officer-in-charge of the entry check-post or the officer empowered by the Commissioner forms the requisite satisfaction that the documents relating to the consignment are not correct and complete, that correct information about ownership and destination is not furnished, or that the transporter has no permanent address within the State. The demand is therefore hedged by conditions precedent and must be exercised in a quasi-judicial manner. Even though the statute does not expressly require a speaking order, fairness demands that the reason for insisting on security be communicated, briefly, at the check-post itself so that arbitrariness is avoided.

Conclusion: Security cannot be demanded unless the statutory preconditions under section 76(4) are fulfilled, and the reason for the demand must be communicated to the affected person.

Ratio Decidendi: A statutory power to demand security at a transit check-post is exercisable only upon satisfaction of the prescribed conditions precedent and must be accompanied by disclosure of the reason for the demand, however brief.

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