{"id":151252,"date":"1991-07-30T00:00:00","date_gmt":"1991-07-29T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/r-h-enterprises-and-others-vs-commissioner-of-sales-tax-and-on-30-july-1991"},"modified":"2015-10-27T09:58:48","modified_gmt":"2015-10-27T04:28:48","slug":"r-h-enterprises-and-others-vs-commissioner-of-sales-tax-and-on-30-july-1991","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/r-h-enterprises-and-others-vs-commissioner-of-sales-tax-and-on-30-july-1991","title":{"rendered":"R.H. Enterprises And Others vs Commissioner Of Sales Tax And &#8230; on 30 July, 1991"},"content":{"rendered":"<div class=\"docsource_main\">Delhi High Court<\/div>\n<div class=\"doc_title\">R.H. Enterprises And Others vs Commissioner Of Sales Tax And &#8230; on 30 July, 1991<\/div>\n<div class=\"doc_citations\">Equivalent citations: 45 (1991) DLT 180, 1991 83 STC 447 Delhi<\/div>\n<div class=\"doc_author\">Author: B Kirpal<\/div>\n<div class=\"doc_bench\">Bench: B Kirpal, D Jain<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p>  B.N. Kirpal, J.   <\/p>\n<p> 1.  Rule D. B.\n<\/p>\n<p>2. The challenge in this writ petition is to the order dated 29th October, 1990, whereby the petitioner has been asked to give an enhanced security of Rs. 9 lakhs under the provisions of section 7 of the Central Sales Tax Act, 1956.\n<\/p>\n<p>3. The petitioner is a dealer, who is registered both under the local as well as the Central Act. The petitioner was registered in the year 1983 and, according to the petitioner, till today it has no taxable turnover under the provisions of the Central Sales Tax Act. The petitioner&#8217;s business is confined to local sales and only the local tax is payable.\n<\/p>\n<p>4. The respondent issued a show cause notice under section 7(3B) of the Central Sales Tax Act, requiring the petitioner to show cause why additional security under section 7(3A) of the Act should not be furnished by the petitioner. The enhancement proposed was Rs. 14 lakhs.\n<\/p>\n<p>5. The petitioner filed a reply in which it was, inter alia, submitted that most of its sales were local sales and there was not justification to enhance the security. It was further stated that the amount of security cannot exceed the limit prescribed under section 7 of the Central Sales Tax Act.\n<\/p>\n<p>6. Vide the impugned order dated 29th October, 1990, the Sales Tax Officer held that during the assessment proceedings for the years 1984-85 and 1985-86, evasion of tax was seen. He further observed that the total gross turnover for the years 1986-87 to 1989-90 came to Rs. 5,47,16,007, and that the average turnover per year was Rs. 1,36,79001. According to the Sales Tax Officer, the liability to tax came to Rs. 9,57,530 and the petitioner was, accordingly, asked to furnish additional security of Rs. 9 lakhs. This is the order which has been challenged before us.\n<\/p>\n<p>7. We find that according to sub-section (3BB), sub-clause (a), of section 7 of the Central Sales Tax Act, the security which a dealer may be required to furnish cannot exceed :\n<\/p>\n<p>  &#8220;a sum equal to the tax payable under this Act, in accordance with the estimate of such authority, on the turnover of such dealer for the year in which such security or, as the case may be, additional security is required to be furnished.&#8221;\n<\/p>\n<p>8. It is clear from the bare perusal of the aforesaid provision that in determining the quantum of the security, what is relevant is the estimate of the tax which may be payable under the provisions of the Central Sales Tax Act. This is evident from the use of the words &#8220;this Act&#8221; in the said sub-clause. In the impugned order, the reference to the annual turnover is with regard to the sales which were local sales. Learned counsel for the respondents has admitted that right from the assessment year 1983-84 till today, the petitioner has no taxable turnover under the provisions of the Central Sales Tax Act. He further states that the estimate of turnover of Rs. 1,36,79,001 mentioned in the impugned order is for the turnover under the local Act. On a query raised by us, he has further admitted that the reference to the evasion of tax in respect of the assessment years 1984-85 and 1985-86 was with regard to the alleged evasion under the local Act and not under the Central Act. In other words, the facts, on the basis of which the impugned order has been passed, pertained to the local Act while the order has been passed with reference to the Central Act.\n<\/p>\n<p>9. Counsel for the respondents states that under section 7(3A) of the Central Sales Tax Act, the respondents are entitled to charge security and also increase the same from time to time. There is no dispute with regard thereto. But what is contended by learned counsel for the petitioner and, in our opinion rightly so, is that the order which has been passed under section 7(3A), cannot provide for a security which is in excess of the limit prescribed by section 7(3BB). The impugned order does not indicate that under the provisions of the Central Sales Tax Act, the petitioner will be required to pay such an amount of tax which can justify an additional security of Rs. 9 lakhs.\n<\/p>\n<p>10. The impugned order is contrary to the provisions of section 7(3BB) and we, therefore, quash it.\n<\/p>\n<p>11. The petition stands disposed of. There will be no order as to costs.\n<\/p>\n<p>12. Writ petition allowed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delhi High Court R.H. Enterprises And Others vs Commissioner Of Sales Tax And &#8230; on 30 July, 1991 Equivalent citations: 45 (1991) DLT 180, 1991 83 STC 447 Delhi Author: B Kirpal Bench: B Kirpal, D Jain JUDGMENT B.N. Kirpal, J. 1. Rule D. B. 2. The challenge in this writ petition is to the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-151252","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>R.H. 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