(1.) THIS is a statement of a case submitted by the Judge (Revisions) Sales Tax for decision on the following question :-
(2.) THE respondent, M/s. Rustam Glass Works, Ferozabad, is a dealer in glass bangles. It was registered under section 8-A of the U.P. Sales Tax Act, and the registration certificate was renewed for the year 1959-60. It appears that as it was heavily in arrears of sales tax, it was called upon to furnish security in the sum of Rs. 40,000 for the continuance of the registration certificate. The security was not furnished by the respondent and thereupon the Sales Tax Officer made an order dated 20th November, 1959, cancelling the registration certificate. The respondent filed a revision application against the order of cancellation. When the revision application came on for hearing a preliminary objection was raised on behalf of the State that the revision was not maintainable inasmuch as the respondent had not furnished the security required by the second proviso to section 8-A(6). On behalf of the respondent it was contended that this proviso contravened the respondent's fundamental right guaranteed by Article 19(1)(g) of the Constitution and was, therefore, ultra vires. The contention of the respondent found favour with the Judge (Revisions) who held that the provisions requiring the furnishing of security at the time of filing the revision application amounted to an unreasonable restriction on the fundamental right guaranteed under Article (19)(1)(g) and, therefore, rejected the preliminary objection on behalf of the State. He considered the revision application on its merits and allowed it. The order of cancellation was set aside and the Judge (Revisions) declared that the registration certificate would continue in force. Upon application by the Commissioner of Sales Tax under section 11(1), of the Act, this statement of the case has been submitted to this Court.
(3.) SECTION 8-A requires a dealer to apply for registration to the assessing authority for an assessment year. That application is considered by the assessing authority who may grant a certificate of registration. The consequence of the grant of that certificate is that a dealer is entitled to certain benefits, among them being his right to realize sales tax from his customers. Section 8-A(6) empowers the assessing authority to require a dealer to furnish security as a condition for the grant of the certificate of registration and also empowers it, even after the certificate has been granted, to require the dealer to furnish security to enable the certificate to continue to have effect. It appears that action was taken by the Sales Tax Officer under section 8-A(6) and, upon the failure of the respondent to furnish the security called for, the certificate renewed earlier was cancelled by the Sales Tax Officer. The first proviso to section 8-A(6) requires the assessing authority to take action under section 8-A(6) only after obtaining the previous approval of the Commissioner. The second proviso, with which we are concerned, gives to a person, aggrieved by the order of the assessing authority calling upon him to furnish the security, a right to proceed in revision to the revising authority, but lays down that this right can be exercised only after the applicant has furnished the security.