9911796707
TMI Blog2000 (1) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... ming into force of the Delhi Sales Tax Act, 1975, the registration of the petitioner continued under the said Act. 3.. The business of the petitioner has been gradually increasing year after year. According to the petitioner it has been regularly filing its returns and maintaining complete records as per the law. It has also been paying the taxes regularly as required under the law. The petitioner is carrying on business of (a) sale of fabrics; (b) sale of readymade garments and (c) sale of cement. Regarding fabrics, it is submitted that the sale is exempted from payment of sales tax under the local Act as well as the Central Act. In view of this exemption, no declaration forms are required nor any were taken from the department. 4.. About readymade garments, the case of the petitioner is that they are mostly purchased by the petitioner locally after payment of sales tax. No further sales tax is payable on sale of such garments. Therefore, no declaration forms are needed in this behalf. So far as readymade garments purchased from outside Delhi, the petitioner being a registered dealer under the Central Act, it is entitled to purchase the same at a concessional rate of 4 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of which rupees fifty lakh were to be in the form of bank guarantee. Further the petitioner was directed to furnish security of rupees twenty lakh under the Central Act out of which rupees five lakh in the form of bank guarantee. The Assistant Commissioner observed in the impugned order that the business of the dealer had increased to gigantic proportion and for that reason the sales tax liability had also increased. The petitioner-company was not charging tax separately in respect of items except cement. It was further observed that the petitioner was not paying monthly tax as per rules and it had not been depositing tax regularly. Further it was mentioned in the order that the petitioner had not been informing the department about opening and closure of some of its offices. The department also felt that the revenue s stake involved in the purchases made through various types of declaration forms was considerably high. The order dated October 9, 1995 passed by the Assistant Commissioner was challenged by the petitioner in this Court by filing a writ petition. The High Court stayed the operation of the impugned order subject to furnishing surety to the extent of rupees fifty l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r purports to have been passed is essential. The relevant portion of section 18 is reproduced as under: The Commissioner may, if it appears to him to be necessary so to do for the proper realisation of the tax, composition money or other dues payable under this Act or for the proper custody and use of the forms referred to in the second proviso to clause (a) of sub-section (2) of section 4, or the first proviso to section 5, as the case may be, impose, for reasons to be recorded in writing as a condition of the grant of the certificate of registration under section 14, section 15 or section 17 to a dealer or of the continuance in effect of such certificate granted to any dealer, a requirement that the dealer shall furnish in the prescribed manner and within such time as may be specified in the order such security or, as the case may be, such additional security as may be so specified, for all or any of the aforesaid purposes. 10.. It will be seen from the above provision that the only conditions for passing an order requiring a dealer to furnish security are-(a) for proper realisation of the taxes or dues payable under the Act; (b) for proper custody and use of the forms. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, all the payments used to be made by the head office at Bombay. At times the cheques issued from Bombay got delayed on account of the postal delays or on account of clearance from the bank. The receipted challans are received only after the cheques are cleared. The challans are to be enclosed with the returns which are filed. Besides this it was pointed out that the banks also take their own time in giving the challans which causes delay in filing the returns. As per the requirement the challans have to accompany the returns. 12.. From the material on record it appears that delay in filing return for the first quarter of the year 1992-93 is the only basis for entire action. Rest of the things are near add-ons for which no basis is available on record. The petitioner has been a registered dealer for more than 35 years. This solitary instance relied upon by the respondents for basing their impugned action also has a positive side so far as the petitioner is concerned. It shows that there has been no other default in filing returns or meeting the tax liability. This solitary instance cannot be taken as a ground for a belief or apprehension that the petitioner would not meet its li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 18 of the Act. The relevant considerations for action under section 18 have to be found in section 18. A reference to the show cause notice shows that several things which have no nexus to the requirements for security contained in section 18 have been enumerated in the show cause notice. For instance, the ground regarding increase in turnover of the petitioner-company does not have any relevance. It rather shows that the petitioner-company is doing well and seen in the background of regular timely filing of returns and payment of tax should be taken as a positive sign. The impugned order dated October 9, 1995 contains more grounds than were stated in the show cause notice. One of the additional grounds contained in the impugned order is that the company is not charging tax separately in respect of items except cement. For this ground again there is no basis. There is no requirement in law or the rules that sales tax should be charged separately. The dealer has to pay the tax on the sales whether the dealer realises the same from its customers is none of the concerns of the department. Thus not charging sales tax separately can have no relevance so far as the considerations me ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
