TaxTMI 
TaxTMI 
2011 (4) TMI 1270
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....t, 1993 (hereinafter referred to as, "the AGST Act") and the Central Sales Tax Act, 1956 (hereinafter referred to as, "the CST Act"), with the Superintendent of Taxes, Unit-C, Guwahati. The petitioner has submitted its up to date returns under the AGST and CST Act and the assessment is complete under both the Acts for the previous years and the demanded tax has also been paid by the assessee. The challenge here is to the order of the Superintendent of Taxes whereby additional security has been assessed against the dealer and proceeding is initiated under section 7 of the Bengal Public Demand Recovery Act (hereinafter referred to as, "the Recovery Act") by the Bakijai Officer, to realize the assessed additional security of Rs. 3 lac, as a....
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....s not given an opportunity, before demand of additional security. Section 15 of the AGST Act permits the assessing officer to demand additional security to satisfy the twin objective of:- (a) timely payment of tax, and (b) for proper use and safe custody of furnished declaration or forms required to be furnished under sub-section (2) of section 10 of the AGST Act. That apart, deposit of additional security can be ordered only for reasons to be recorded in writing and that too after giving an opportunity of hearing to the affected dealer. For ready reference, section 15(1)(a) and (b) of the AGST Act is extracted here in below:- "15. (1) Subject to any rule framed in this behalf the assessing officer may, as a condition of t....
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....onditions under section 15(1)(a) and (b) are not satisfied in the present case. That apart, it must also be noted that the amount of Rs. 3 lac has been arbitrarily stipulated as additional security although under rule 24 of the Assam General Sales Tax Rules, 1993 (hereinafter referred to as, "the AGST Rules"), it is clearly prescribed that additional security cannot exceed the anticipated tax or the tax paid in the previous years. The tax liability of the assessee in this case, never exceeded Rs. 20,000 in the previous years and therefore the stipulated amount of Rs. 3 lac, has no nexus with the objective prescribed under section 15 of the AGST Act and is far in excess of the additional security, realizable under rule 24(1) of the AGST R....
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.... be exercised reasonably and to meet the twin objective(s) under sub-clauses (a) and (b) of section 15(1) of the AGST Act and additional security cannot be demanded on the ipse dixit of the assessing officer. For demanding additional security, the assessing officer must satisfy itself that the revenue needs to be safeguarded for timely realization of tax and/or for proper custody and use of the forms issued to the assessee. Cogent materials must also be available for deriving such satisfaction and the materials must be relevant to show the assessee to be defaulting in timely payment of tax or misuse of the forms. But for an unblemished dealer who deposits his tax on time and there is no adverse records of any misuse of forms, additional ....