2007 (7) TMI 606

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....he surety is to a tune of Rs. 1 lakh. A sum of more than Rs. 23 lakhs is due from the third respondent as sales tax arrears. Revenue recovery proceedings were initiated against the appellant as well. The writ petition was filed by the appellant herein praying for the following reliefs: "(i) Issue a writ of certiorari or other appropriate writ, direction or order calling for the records leading to exhibit P5 demand notice and quashing the same; (ii) Issue a writ of mandamus or other appropriate writ, direction or order directing the first and second respondents to abstain from enforcing any demand against the petitioner beyond one half of the tax assessed on the third respondent for the relevant year of registration certified in exhi....

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....in making a proper estimate. (2) Such security may be furnished by the dealer in any of the following ways, namely: (a) by depositing as security in the Government treasury the amount fixed by the said authority; or (b) by depositing with the said authority Government securities for the amount fixed by the said authority; or (c) by depositing security amount in the post office savings bank and pledging the pass book to and depositing it with the said authority; or (d) by furnishing to the said authority a guarantee from a bank, approved in this behalf by the said authority, agreeing to pay to the State Government, on demand, the amount of security fixed by the said authority; or (e) by furnishing two sureties acceptable to the said au....

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....en for the amount not exceeding one-half of the tax payable on the turnover of the dealer for the year as estimated by the authority. Security is to be furnished in the manner provided in sub-rule (2) of rule 6. Exhibit P3 is a bond which comes under sub-rule (2)(e) of rule 6. So far as the surety is concerned, he need not be heard by the authority while fixing the amount under rule 6(1). At the stage of fixing the amount under rule 6(1), surety does not come into the picture at all. His liability arises under the bond and it has no reference or relevance to rule 6(1). Once a bond is executed, as per rule 6(3) such security shall remain in force till the registration certificate continues to be in force and it can be enforced in the event ....