- (1.) THIS petition is directed against the two orders both dated February 26, 1996, contained in annexures 7 and 8 to the writ petition by which the Trade Tax Officer, Sector-14, Agra, the sole respondent has cancelled the registration of the petitioner both under the U. P. Trade Tax Act, 1948, and the Central Sales Tax Act, 1956, respectively.
(2.) WE have heard the learned counsel for the parties. The impugned orders proceed on the allegation that since the petitioner had failed to furnish the additional security of Rs. 2,00,000 demanded from the petitioner, therefore, the registrations were being cancelled. The petitioner is a firm which carries on business, inter alia, in iron and steel building materials and stone grits, etc. At the time when registration was obtained both under the U. P. Trade Tax Act and the Central Sales Tax Act the petitioner was required to give a bank guarantee of Rs. 15,000 which was admittedly furnished. A notice purporting to be under section 8-C of the U. P. Trade Tax Act was served upon the petitioner demanding additional security of Rs. 2,00,000 by January 30, 1996, failing which the notice stated that proceedings for the cancellation of the registration will be taken. It may be observed that no reasons have been indicated in the said notice for which it became necessary to require the petitioner to furnish an additional security of rupees two lacs. However, some grounds have been set out in the counter-affidavit, but it is not necessary to refer them. It is not disputed that the petitioner objected to the notice under section 8-C and stated that it was not liable to furnish any additional security. Thereafter, the petitioner was issued a notice dated January 3, 1996 for cancellation of its registration under the aforesaid two Acts with the allegation that the reply filed by the petitioner was not found satisfactory, therefore, it should show cause by September 8, 1996 as to why its registration should not be cancelled. At this stage the petitioner approached this Court under article 226 of the Constitution of India by Writ Petition No. 166 of 1996. While inviting counter-affidavit on February 26, 1996 and a Division Bench of this Court passed an interim order to the effect that " In the meantime no steps will be taken to cancel the registration of the petitioner pursuant to the impugned notices dated February 15, 1996 (annexure 9 to the writ petition) both under the U. P. and Central Sales Tax Acts and forms XXXI will be issued to the petitioner on the previous terms and conditions in accordance with law".
(3.) DESPITE the interim order passed by this Court the registration of the petitioner was cancelled under the U. P. Trade Tax Act and the Central Sales Tax Act on the allegation that the petitioner did not appear on the date fixed in the show cause notice and the additional security of rupees two lacs was not furnished. It is averred in the counter-affidavit that the interim order passed by this Court was not placed before the respondent although the case of the petitioner is that the said order was duly brought to the notice of the respondent and he proceeded to pass the impugned order in violation of the interim order. Sub-section (2) of section 8-C contemplates as under " (2) Where it appears necessary to the assessing authority so to do - (a) for the proper realisation of any tax, penalty or other sums due or payable under this Act; or (b) for the proper custody or use of forms prescribed under this Act or the Rules framed thereunder; or (c) as a condition for the grant or, as the case may be, renewal or the continuance in effect of a recognition certificate or a certificate of registration or provisional registration, it may, by an order in writing and for reasons to be recorded therein, direct, before the grant or, as the case may be, renewal of such certificate or at any time while such certificate is in force, that the dealer or the person concerned shall furnish, in the prescribed manner and within such time as may be specified in the order, such security or, if the dealer or the person concerned has already furnished security, such additional security, of any nature other than those specified in sub-section (1), as may be specified, for all or any of the aforesaid purposes : Provided that the dealer or the person concerned may, if he so likes, instead of furnishing security of the nature asked for, furnish security of the nature specified in sub-section (1 ). ";