Statutory security must follow prescribed forms only; bank guarantee cannot be insisted on where the rule excludes it.

Rule 37(1) of the U.P. Value Added Tax Rules, 2008 prescribes the specific forms in which security may be furnished against a demand under Section 19, and it does not include a bank guarantee. An authority cannot therefore insist on a mode of security not authorised by the rule, even if the object is to protect revenue. Where the dealer is willing to furnish security in one of the permitted forms, the demand must be reconsidered within the statutory framework and decided afresh by the competent authority.

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Issues: Whether, under Rule 37(1) of the U.P. Value Added Tax Rules, 2008, the authority could insist upon a bank guarantee in lieu of the security contemplated by the rule, and whether the impugned demand required reconsideration.

Analysis: Rule 37(1) prescribes the forms in which security may be furnished against the demand raised under Section 19 of the U.P. Value Added Tax Act, 2008, and does not contemplate bank guarantee as one of the specified modes. The demand of bank guarantee was also examined against the backdrop that security must adequately protect the revenue, yet must remain within the statutory framework. As the petitioner expressed willingness to furnish security in the forms permitted by the rule, the matter required a fresh decision by the authority on the security acceptable under the statutory scheme.

Conclusion: The demand for bank guarantee could not be sustained under Rule 37(1), and the petitioner was entitled to have the matter reconsidered by the competent authority in accordance with the prescribed forms of security.

Ratio Decidendi: When a statute or rule specifies the permissible forms of security, the authority cannot insist on a mode not authorised by the rule, and the matter must be decided afresh within the statutory framework.

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