Rajasthan Sales Tax Act,1994
Section 23. Furnishing of security for registration
(1) Subject to any rules framed in this behalf, the authority competent to grant registration or the assessing authority shall, as a condition to the grant of registration to a dealer or at any time after such grant, require him to furnish in the prescribed manner and within the time specified by such authority, the initial security or such subsequent additional security as may be considered necessary –
(a) for the timely payment of the amount of any tax or other sum payable by him under this Act; and
(b) for the safe custody and the proper use of the declaration forms obtained by him under this Act and the rules made thereunder.
(2) Subject to provisions of sub-section (1), the obligatory registration certificate and the voluntary registration certificates may be granted before furnishing of security, but the furnishing of such security shall be a pre-condition for granting of the provisional registration certificate, but in no case declaration forms shall be issued to a dealer who has not furnished the security in accordance with the provisions of this section.
(3) At the time of grant of registration, the initial security shall be of the amount of –
(a) Rs. 10,000 in case of a dealer applying for obligatory registration or voluntary registration; and
(b) Rs. 10,000 in case of a small scale manufacturing unit, Rs. 15,000 in case of a medium scale manufacturing unit and Rs. 25,000 in case of a large scale manufacturing unit, applying for provisional registration.
Explanation : The small scale or medium scale or large scale manufacturing unit shall have the same meaning as assigned to them by the Government of India from time to time.
(4) The amount of security, in case of a dealer who is already registered under the Act, may be increased by the assessing authority, for reasons to be recorded in writing, to five per cent of the annual tax liability of the immediate preceding year, subject to a maximum limit of rupees one lac.
(5) Where the security furnished by a dealer under sub-sections (3) and (4) is in the form of a surety bond and the surety becomes insolvent or dies, the dealer shall within thirty days of the occurrence of any of the aforesaid events, inform the assessing authority and shall within ninety days of such occurrence, furnish a fresh surety bond or furnish in a prescribed manner other security for the amount of the surety bond.
(6) The assessing authority may, by order in writing, forfeit the whole or any part of the security furnished by a dealer –
(a) for realising any amount of tax, penalty, interest or any other sum payable by him under this Act; or
(b) for any loss caused to the government by negligence or wilful default on his part in ensuring the safe custody or the proper use of the declaration forms.
(7) Where by reason of an order of forfeiture under sub-section (6), the security furnished by any dealer is rendered insufficient, he shall make up the deficiency within a period of thirty days from the date of the communication of the order of the assessing authority.
(8) No dealer shall be required to furnish additional security under sub-section (4) and no order of forfeiture of the whole or any part of the security shall be passed against him under sub-section (6) unless he has been given an opportunity of being heard.
