Appellate permission for flexible security forms bars the assessing authority from insisting on a bank guarantee

Where an appellate order permitted security to be furnished in any form authorised under the Kerala Value Added Tax Rules, the assessing authority could not insist on a bank guarantee or otherwise narrow the permitted modes. Rule 85, read with Rule 19(2)(e), recognises multiple forms of security, including a security bond in Form No. 6A. The demand for a more restrictive form of security exceeded the scope of the appellate order and was unsustainable. The writ petition was allowed, and the security bond was directed to be accepted as sufficient compliance if otherwise in order.

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Issues: Whether the assessing authority could insist on bank guarantee or a particular form of security when the appellate order permitted security in any form stipulated under the Act.

Analysis: Rule 85 of the Kerala Value Added Tax Rules, 2005 permits security to be furnished in the forms specified in rule 19(2)(e) and also contemplates a security bond in Form No. 6A. Rule 19(2)(e) similarly recognises multiple permissible modes of furnishing security. Since the appellate authority had expressly permitted the petitioner to furnish security in any of the stipulated forms, the assessing authority could not narrow that choice by insisting on a bank guarantee or any other different form of security. The demand made by the assessing authority exceeded the scope of the appellate order.

Conclusion: The insistence on bank guarantee was unsustainable and the impugned directions were liable to be set aside.

Final Conclusion: The writ petition was allowed and the petitioner's security bond was directed to be accepted as sufficient compliance if otherwise in order.

Ratio Decidendi: Where an appellate order authorises furnishing of security in any stipulated form, the original authority cannot impose a more restrictive mode of security inconsistent with that permission.

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