TaxTMI 
TaxTMI 
2003 (8) TMI 511
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....hat they were sureties for the firm M/s. Gita Brothers, Naraingarh, with the Excise and Taxation Department. The surety bond submitted by plaintiff-respondent No. 1, Dharam Singh was neither accepted nor attested by or on behalf of Excise and Taxation Department or any other person authorised by it. However, the department on furnishing the surety bonds by Dharam Singh plaintiff-respondent No. 1 on March 6, 1973 has issued sales tax licence to the firm M/s. Gita Brothers, Naraingarh. It was claimed by the defendant-appellant that surety bond stood accepted impliedly. 3.. The learned trial court took the view that surety bond submitted by Dharam Singh, plaintiff-respondent No. 1, was for consideration and non-mentioning of word "accepted" is not material as long as sales tax licence was issued to the firm M/s. Gita Brothers and plaintiff-respondent No. 2, Pritam Lal should be deemed to have undertaken to pay the dues of plaintiff-respondent No. 1, Dharam Singh. The recovery was ordered to be effected from either of the two respondents and the suit was dismissed. However, the learned lower Appellate Court reversed the findings by observing that acceptance of the surety bon....
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....d's case AIR 1970 Raj 112, inter alia, holds that provisions of sections 133 to 139 of the contract Act cannot apply to a surety bond executed in favour of the State, would not mean that the impugned surety bond was not to be formally accepted. Reference on this aspect of the matter may with profit be made to State of Uttar Pradesh v. Jayanand Lakhera 1971 U.J. SC 262. DW2 Shri Prem Nath, retired District Excise and Taxation officer, has admitted in his cross-examination among other things that all the witnesses/ sureties of the impugned surety bond had not put their signatures thereon [sic?] in his presence and the Inspector also did not sign the same and that the surety bond in question does not bear the signatures of any one from the department in token of the acceptance or attestation thereof. The mere fact that plaintiff No. 1 had paid or deposited Rs. 2,000 under constrained circumstances while under arrest, is inconsequential. I, accordingly, hold that the so-called implied acceptance of the impugned surety bond is of no result and moment and I as consequential upset erroneous finding of learned trial Judge on issue No. 1. It is further held that the impugned surety bond....
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....cate is in force, by an order in writing and for reasons to be recorded therein, require the dealer, to whom the certificate has been granted, to furnish within such time as may be specified in the order and in the prescribed manner such security or, if the dealer has already furnished any security in pursuance of an order under this sub-section or subsection (1), such additional security, as may be specified in the order, for all or any of the aforesaid purposes. (3) No dealer shall be required to furnish a security under subsection (1) or sub-section (2) by the authority referred to therein, unless he has been given a reasonable opportunity of being heard and the amount of security that may be required to be furnished by any dealer under either of the aforesaid sub-sections or the aggregate of the amount of such security and the amount of additional security that may be required to be furnished by any dealer under subsection (2), shall in no case exceed the tax payable, in accordance with the estimate of such authority, on the turnover of the dealer for the year in which such security or, as the case may be, additional security is required to be furnished. (4) Where the securit....
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....ales tax receipts'; (b) post office saving banks account, the account being pledged to the Commissioner or any officer authorised by him in writing in this behalf; (c) bank guarantee from a Scheduled Bank agreeing to pay to the State Government on demand the amount of security; (d) personal bond with solvent surety/sureties for the amount of security to the satisfaction of the Commissioner or any officer appointed by the State Government under sub-section (1) of section 3 to assist the Commissioner not below the rank of an Assistant Excise and Taxation Officer, but including the officer-in-charge of a barrier, which shall be in form S.T. 50 on a non-judicial paper of the appropriate value; (e) Such saving certificate or bonds as are issued by Government of India, from time to time, to be pledged to the Commissioner or any other officer authorised by him in this behalf. (2) The security furnished under sub-section (1) or sub-section (2) of section 23 shall be maintained in full so long as the registration certificate continues to be in force. (3) In the event of default in the payment of any tax, surcharge, interest, penalty or any other amount due, the security furnished ....