RAYMONDS LIMITED Vs. COMMISSIONER OF SALES TAX

JUDGEMENT

(1.) By this petition under Article 226 of the Constitution of India, the petitioner has challenged an order dated 9th October, 1995 passed by the Assistant Commissioner, Sales-tax, Delhi in the exercise of powers under Sec.18 of the Delhi Sales-tax Act, 1975. By the impugned order, the Assistant Commissioner directed the petitioner to provide a security of rupees two crores under the Local Act out of which rupees fifty lacs were to be in the form of bank guarantee and rupees twenty lacs under the Central Act out of which rupees five lacs were to be in the form of bank guarantee for continuance of the registration certificate granted in favour of the petitioner under both the Acts.

(2.) Briefly the facts are that the petitioner was registered under the then Bengal Finance (Sales-tax) Act, 1941 as extended to the Union Territory of Delhi with effect from December 1963 and the Central Sales-tax Act with effect from 1974. With the coming into force of the Delhi Sales-tax Act, 1975, the registration of the petitioner continued under the said Act.

(3.) The business of the petitioner has been gradually increasing year after year. According to the petitioner it has been regularly filing its returns and maintaining complete records as per the law. It has also been paying the taxes regularly as required under the law. The petitioner is carrying on business of a) sale of fabric; b) sale of readymade garments and (c) sale of cement. Regarding fabrics, it is submitted that the sale is exempted from payment of sales- tax under the Local Act as well as the Central Act. In view of this exemption, no declaration forms are required nor any were taken from the Department.