Sales tax surety is confined to the assessment year and does not continue indefinitely for later arrears.

A surety furnished under the Andhra Pradesh General Sales Tax Act and Rules is not a perpetual liability for later years. Reading section 12(7), rule 28(8), Form D clause (19) and rule 28(14) together, the security remains in force while registration continues, but its operation is referable to the specific assessment year for which it was undertaken. The rules also allow adjustment of security towards tax dues and demand of fresh or additional security, confirming that the surety does not extend indefinitely to subsequent years' arrears.

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Issues: Whether a surety furnished under the Andhra Pradesh General Sales Tax Act, 1957 and the Andhra Pradesh General Sales Tax Rules, 1957 continues indefinitely so as to cover tax arrears of subsequent years, or is confined to the assessment year for which it was given.

Analysis: The security and surety scheme under section 12(7) of the Andhra Pradesh General Sales Tax Act, 1957 and rule 28(8) of the Andhra Pradesh General Sales Tax Rules, 1957 was read with clause (19) in Form D and rule 28(14) of the Rules. On that construction, the security furnished by a surety is maintained while the registration certificate remains in force, but its operation is referable to the particular year for which the surety was undertaken. Rule 28(14) also contemplates adjustment of the security towards tax dues and permits demand of fresh or additional security, which supports the view that the surety is not perpetual.

Conclusion: The surety was held to be limited to the assessment year for which it was furnished and could not be treated as a continuing or perpetual liability for later years.

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