TaxTMI 
TaxTMI 
2003 (1) TMI 682
X X X X Extracts X X X X
X X X X Extracts X X X X
....alaji Lotteries". He applied for registration under the Tamil Nadu General Sales Tax Act, 1959. As per section 20 of the said Act he filed application in form D. The registering authority as a pre-requisite for granting certificate of registration, demanded security in form XIX-B. To oblige the said V.R. Ramaswamy, the petitioner furnished the above said house as security in form XIX-B. 2.. At the time of filing the application for registration, the said V.R. Ramaswamy, has filed a return in form A, on behalf of "Balaji Lotteries" furnishing the estimated taxable turnover of Rs. 1,10,000. According to the proviso to section 21(1-A) of the TNGST Act, 1959 the security furnished should not exceed one half of the tax payable on the taxable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to proceed against the property security given by the petitioner. 6.. The main contention of the petitioner is that Thiru V.R. Ramaswamy was running the Balaji Lotteries and the petitioner has nothing to do with the said business. As per proviso to section 21(1-A), the petitioner has furnished his property as security in form XIX-B. It covers a sum of Rs. 2,200 which the petitioner undertakes to pay. The respondent cannot proceed against the petitioner's personal property which he gave only as a security for the purpose of registration and as such the impugned notice is liable to be quashed. 7.. As per section 21(2-B) of the TNGST Act, 1959 for the purpose of realisation of tax payable, security should be obtained at the time of registr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under the Tamil Nadu General Sales Tax Act, 1959 at any time, while the said certificate is in force, the assessee is liable to pay the tax. When we read section 50 of the Tamil Nadu Revenue Recovery Act, 1864 along with section 21(2-B) of the TNGST Act, 1959 it is not only the assessee but also the surety, is liable for the payment of tax. The very purpose of execution of security bond is for the purpose of collection of tax from the assessee. The execution of a security bond in stamp papers for creating security of the property exclusively owned by the petitioner would bind the petitioner as per the provisions of section 50 of the Revenue Recovery Act, 1864. 10.. Further rule 24(15-A) of the Tamil Nadu General Sales Tax Rules, 1959 rea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dice to any other mode of collection, be recovered as if it were an arrear of land revenue. It is this fiction of treating the 'arrear of sales tax' as if it were an 'arrear of land revenue' which attracts section 52 of the Madras Revenue Recovery Act, 1864. This section provides that all arrears of revenue, other than land revenue, due to the State Government, may be recovered in the same manner as arrears of land revenue under the provisions of the Act, unless there is a contrary intendment provided for in any other special enactment." The High Court has also held further: "Here is a case in which the statutory authority in the exercise of such power, has distrained the properties, admittedly belonging to the petitioner and intends to p....