P. Raju vs Commercial Tax Officer, Godown Assessment Circle, Madras-1 and Others

Nainar Sundaram, J.—On the allegation that the petitioner, who is admittedly an assessee and a registered dealer under the Tamil Nadu

General Sales Tax Act, 1959, hereinafter referred to as the Act, is a regular defaulter in the payment of monthly taxes, steps were taken

demanding of the petitioner to deposit additional security as per section 21(2-B) of the Act. The notice of demand issued by the first respondent is

dated 16th May, 1981. Prior to the demand, there was no opportunity of being heard afforded to the petitioner, as contemplated u/s 21(2-C) of

the Act. This notice of demand was followed up by a show cause issued by the first respondent to the petitioner on 9th June, 1981 whereunder the

petitioner was called upon the explain as to why the registration certificate issued to him under the Act should not be cancelled. On 1st July, 1981,

the first respondent passed orders cancelling the registration certificate of the petitioner under the Act. The petitioner agitated the matter further.

The petitioner raised contentions on merits with regard to the call for depositing additional security and the petitioner also raised a contention that

he was not afforded the opportunity of being heard before he was called upon to deposit the additional security. All the contentions were rejected

and the ultimate order passed was that of the third respondent dated 27th November, 1981. That order is being impugned in this writ petition.

Mr. K. Jayachandran, learned counsel for the petitioner, would submit that section 21(2-C) of the Act is specific and enjoins upon the authority

to afford the dealer an opportunity of being heard before he is required to furnish any additional security u/s 21(2-B) and this mandate of the law

has been violated in the instant case. Learned counsel for the petitioner also wants to canvass the merits of his client''s contention that there is no

warrant to call upon the petitioner to deposit the additional security and further even if such an additional security has got to be made, the petitioner

could press for furnishing immovable property security in the place of making cash deposit. Section 21(2-C) of the Act, as contended by the

learned counsel for the petitioner, envisaged providing of an opportunity of being heard to the concerned dealer before he is called upon to furnish

additional security as per section 21(2-B) of the Act. It is not claimed before me that the petitioner was afforded any such opportunity. In view of

this, I am obliged to interfere in this writ petition. Accordingly, the writ petition is allowed and the proceedings taken calling upon the petitioner to

deposit additional security culminating in the order of the third respondent in the writ petition are quashed. There will be no order as to costs. This

order shall not stand in the way of the concerned authority initiating action afresh strictly complying with the provisions of the Act in this behalf.

Writ petition allowed.