TaxTMI 
TaxTMI 
2013 (1) TMI 273
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....7(1) of the KVAT Act (hereinafter referred to as 'the Act' for short). Subsequently, respondents demanded additional security of Rs. 5,00,000/- which was also remitted. Still later, petitioner was issued Ext.P3 notice stating that, having regard to the volume of transactions, in order to protect the interest of the revenue, he should furnish an additional security of Rs. 50,00,000/-, in any manner as provided under Section 17 of the Act r/w Rule 19 of the KVAT Rules. Petitioner did not furnish security as directed. Therefore, Ext.P6 order was issued cancelling his registration both under the Act and under CST Act. It is challenging Ext.P6 order, the writ petition is filed. 3. A reading of Ext.P6 shows that in addition to the....
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.... of the tax payable on the turnover of the dealer for the year as estimated by the registering authority. (2). Notwithstanding anything contained in sub-section (1), the registering authority may, at the time of registration, demand security by order in writing from every dealer effecting first sale of goods within the State an amount not exceeding one half of the tax payable on the turnover of the dealer for the year as estimated by the registering authority: Provided that the registering authority shall have the power to demand at any time additional security if such authority has reason to believe that the turnover estimated under sub-sections (1) or (2) was too low. Provided further that no security or additional security shall be de....
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....w, for making up the shortage of the one half of the tax payable as security, additional security can be demanded. 8. Insofar as CST Act is concerned, the relevant provisions are Sections 7(2A), (3A), (3B) and (3BB) which read as under:- 7(2A). Where it appears necessary to the authority to whom an application is made under sub-section (1) or sub- section (2) so to do for the proper realization of the tax payable under this Act or for the proper custody and use of the forms referred to in clause (a) of the first proviso to sub-section (2) of section 6 or sub section (1) of section 6A or [sub-section (4) of section8], he may, by an order in writing and for reasons to be recorded therein, impose as a condition for the issue of....
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....l not exceed- (a). in the case of a dealer other than a dealer who has made an application, or who has been registered in pursuance of an application, under sub-section (2), a sum equal to the tax payable under this Act, in accordance with the estimate of such authority, on the turnover of such dealer for the year in which such security or, as the case may be, additional security is required to be furnished; and (b). in the case of a dealer who has made an application or who has been registered in pursuance of an application, under sub-section (2), a sum equal to the tax leviable under this Act, in accordance with the estimate of such authority on the sales to such dealer in the course of inter-State trade or commerce in the year i....