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M/S. Bankey Bihari Traders v. Trade Tax Officer, Bareilly - WRIT TAX No. 257 of 2000  RD-AH 1510 (24 November 2004)
Civil Misc. Writ No. 257 of 2000
M/s. Bankey Bihari Traders Vs. Trade Tax Officer, Sector-VI, Bareilly
Hon. R.K. Agrawal, J.
Hon. Dilip Gupta, J.
This petition has been filed for quashing the order dated 2.3.2000 passed by the Trade Tax Officer, Bareilly suspending the registration certificate of the petitioner under Section 8-C (7)(b) of the Uttar Pradesh Trade Tax Act, 1948 (hereinafter referred to as the ''Act') and for quashing the notice dated 28.1.2000 issued under Section 8-C (2) of the Act requiring the petitioner to furnish the additional security to the extent of Rs. 4.5 lacs.
The petitioner is a Firm registered under Section 8-A of the Act. A notice dated 28.1.2000 was issued by the Trade Tax Officer under Section 8-C (2) of the Act requiring the petitioner to furnish the additional security of Rs. 4.5 lacs in the form of a Bank Guarantee by 14.2.2000 failing which action could be taken against it in accordance with law. Since the petitioner did not furnish the additional security by the date fixed, an order dated 2.3.2000 was passed under Section 8-C (7) (b) of the Act suspending the registration of the petitioner both under the U.P. Sales Tax Act and the Central Sales Tax Act till the deposit of the additional security. These two orders have been impugned in the present petition.
Learned counsel for the petitioner contended that the order dated 28.1.2000 was passed without giving any opportunity of being heard in complete violation of the provisions of Section 8-C (3) of the Act and, therefore, it was liable to be set aside. The subsequent order dated 2.3.2000 being a consequential order was, therefore, also liable to be set aside. These averments have been made in paragraph No. 18 of the writ petition.
A counter-affidavit has been filed on behalf of the respondent and in paragraph No. 19 of the counter-affidavit, it has been stated as follows:-
"That in reply to the contents of paragraph no. 18 of the writ petition the deponent states that the petitioner has rightly stated in these paragraphs that the order dated 28.1.2000 was passed without giving any opportunity. Although the opportunity was given to the petitioner to file the additional security till 14.2.2000 on the basis of opportunity given earlier as mentioned in the notice-order dated 28.1.2000 hence allegation to the contrary that no opportunity of hearing has been given to the petitioner is wrong and denied to the contrary the petitioner has never co-operated with the department by producing his account books."
We have heard the learned counsel for the parties and have perused the materials available on record.
Section 8-C (2) of the Act provides that the assessing authority may, by an order in writing and for reasons to be recorded therein, direct a dealer within such time as may be specified in the order to furnish such additional security. Section 8-C (3) of the Act, however, provides that no dealer shall be required to furnish such additional security unless he has been given an opportunity of being heard, and the amount of such additional security shall in no case exceed the tax payable.
From a bare perusal of the aforesaid provisions, it is clear that the assessing authority can require a dealer to furnish additional security by an order in writing and for reasons to be recorded therein only after the dealer has been given an opportunity of being heard. A perusal of the order dated 28.1.2000 leaves no manner of doubt that the petitioner had been required to furnish the additional security without being heard at all. The petitioner, by means of the said order, was straight away asked to deposit the additional security to the extent of Rs. 4.5 lacs by the date fixed. In the counter-affidavit, the respondent has clearly admitted that the order dated 28.1.2000 was passed without giving any opportunity.
We, therefore, find considerable force in the submissions made by the learned counsel for the petitioner that the notice dated 28.1.2000 requiring the petitioner to furnish the additional security is liable to be quashed on the sole ground that opportunity of being heard had not been provided before the petitioner was required to furnish the additional security. The notice dated 28.1.2000 is clearly in contravention of the provisions of Section 8-C (2) of the Act. Such being the position, the subsequent order dated 2.3.2000 is also liable to be set aside.
The writ petition, therefore, succeeds and is allowed. The notice dated 28.1.2000 and the order dated 2.3.2000 are quashed. It will, however, be open to the assessing authority to pass a fresh order in accordance with law under Section 8-C (2) of the Act after providing an opportunity of hearing to the petitioner as provided for under Section 8-C (3) of the Act. There shall be no order as to costs.
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