( 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.

( 4 ) ABOUT readymade garments, the case of the petitioner is that they are mostly purchased by the petitioner locally after payment of sales-tax. No further sales-tax is payable on sale of such garments. Therefore, no declaration forms are needed in this behalf. So far as readymade garments purchased from outside Delhi, the petitioner being a registered deal under the Central Act, it is entitled to purchase the same at a concessional rate of 4% on the strength of its registration certificate by issuing a declaration in form `c . For this the petitioner has been obtaining form `c from the Sales-tax Officer as per the rules and has been giving complete account of its utilisation from time to time.

( 5 ) FOR sale of cement, the stand of the petitioner is that it is selling cement manufactured by the company itself. Cement is received on stock transfer from the factory at Bilaspur in Madhya Pradesh and from some other branches and depots. Under Section 6 (2) (a) of the Central Sales Tax Act it is provided that for receiving goods on stock transfer, evidence to that effect has to be produced before the tax authorities by the factory or the unit which sends the goods. This can be done by producing a declaration in Form F which the receiving branch can procure from its tax authority and issue the same to the sending branch/factory. In the present case, against the goods received, the company has been procuring Form F from the respondent tax authorities and have been issuing the same to its factory/depots. As required by the rules, complete details of the utilisation of the Form F are furnished to the assessing authorities from time to time. That upon the entire sales of cement in and outside Delhi, appropriate tax is collected and deposited.

( 6 ) THE petitioner was served with a notice dated 22nd August, 1995 by the Assistant Commissioner, Sales-tax, Delhi calling upon the petitioner why it be not required to furnish security of rupees two crores under the Local Act and rupees twenty lacs under the Central Act. The ground for requiring the petitioner to furnish security given in the show cause notice are for safe custody for statutory forms and for safeguarding the Government revenue. The allegations levelled against the petitioner in the show cause notice were