PRAKASH KRISHNA, J. - (1.) THESE three revisions under Section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, 'the Act') arise out of common order dated March 5, 2001 passed by the Trade Tax Tribunal, Kanpur, whereby and whereunder it has dismissed all the three Second Appeal Nos. 513, 515 and 514 of 2000 filed by the dealer in respect of an order passed under Section 8C of the Act demanding additional security and cancellation of registration both provincial and Central. The controversies involved in these revisions are interconnected and interwoven and as was suggested by the learned Counsel for the parties are being disposed of by a common judgment.
(2.) THE applicant who is engaged in the business of foodgrains, galla, tilhan, bardana, kirana, gur, rab, posta dana and oil cake, etc., applied for and was granted registration under Section 8A of the Act and under Section 7 of the Central Sales Tax Act. The registration was granted on March 22, 1999 and a security of Rs. 15,000 of two registered dealers under the Act was furnished as demanded by the Department. The returns of the turnover were filed regularly and the admitted tax was paid promptly as alleged by the applicant. The applicant has a head office at Farrukhabad and a branch at district Bareilly. For the month of July, 1999 he filed a return of the taxable turnover of Rs. 13,12,740.27 on which he has admitted the tax to the tune of Rs. 65,635. The assessing officer looking to the magnitude of the turnover of the dealer demanded additional security to the tune of Rs. 5 lakhs to safeguard the interest of the Revenue. He was of the opinion that the dealer has a huge turnover, and to protect the interest of the Revenue, additional security as provided for under Section 8C should be demanded. After serving a pre -show -cause notice, by the order dated August 20, 1999 the Trade Tax Officer, Sector 2, Fatehgarh asked the dealer to furnish an additional security of Rs. 5 lakhs of two registered dealers or in the alternative to furnish a national saving certificate of Rs. 5 lakhs pledged in favour of the Department. The said order was challenged unsuccessfully before the first appellate authority and the Tribunal. It has given rise to T.T.R. No. 116 of 2001. The other two revisions arise out of consequential order cancelling the registration of the dealer under the Act as well as under the Central Sales Tax Act for failure to furnish additional security as demanded by the Department. The learned Counsel for the dealer advanced his argument with reference to T.T.R. No. 116 of 2001 wherein the following questions of law have been sought to be raised: (i) Whether additional security could be demanded for reasons extraneous to the provisions of the Act? (ii) Whether additional security could be demanded where none of the conditions prescribed under the Acts was present or alleged? (iii) Whether additional security demanded is disproportionate to the tax payable? (iv) Whether any additional security could be demanded without issuance of the show -cause notice? (v) Whether the Tribunal could take into consideration any ground or reason which was not considered by the lower authorities?
(3.) SHRI S.D. Singh, the learned Counsel appearing for the dealer, submits that on the plain language of Section 8C, there was no occasion for the Department to demand any additional security as otherwise it would amount to violation of the right of the dealer to carry on free trade. He submits that on the date when the impugned order was passed there was no material nor is there any material even today with the Department to show that the dealer is in any manner not paying the admitted tax or is a defaulter in paying the legitimate dues of the Department. The high turnover of the dealer in the month of July 1999 of the relevant assessment year has no nexus with the demand of additional security. It was further pointed out by him that this Court while entertaining the revision by way of interim protection directed the dealer to furnish additional security to the tune of Rs. 2 lakhs vide order dated July 22, 2001 which the dealer has furnished and is carrying on the business.;