IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FIFTEENTH DAY OF DECEMBER TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE GODA RAGHURAM AND THE HON'BLE SRI JUSTICE G.V.SEETHAPATHY WRIT PETITION No: 27333 of 2009 Between: M/s. Reliance Industries Limited, 6-3-666/B, 1st Floor, Deccan Chambers, Somajiguda, Hyderabad, Rep. by its Manager, Mr. B. Nagaraj Kumar. ..... PETITIONER A N D 1. The Assistant Commissioner (CT), LTU, Abids Division, Hyderabad. 2. The Appellate Deputy Commissioner (CT), Secunderabad Division, Hyderabad. 3. The Joint Commissioner (CT) Legal, Andhra Pradesh, Hyderabad. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Mandamus or any other appropriate Writ or order or direction declaring the action of the 3rd Respondent in rejecting the revision petition filed by the petitioner seeking stay through the impugned orders in CCT Ref.No.LV(1)/607/2009 Dt. 24- 11-2009 and the consequential action of the 1st respondent insisting for payment of the disputed penalty of Rs.1,05.56,431/- for the tax period 2007-08 under the APVAT Act, as illegal, arbitrary and highhanded and set aside the same and restrain the 1st Respondent from taking any coercive steps for recovery of the disputed penalty of Rs.1,05.56.431/- for the tax period 2007-08 under the APVAT Act pending disposal of the appeal before the 2nd Respondent Counsel for the Petitioner: MR.BHASKAR REDDY VEMIREDDY Counsel for the Respondents: GP FOR COMMERCIAL TAXES The Court made the following: ORAL ORDER:(Per GR,J) Heard the learned counsel for the petitioner and Sri P.Balaji Varma, Special Standing Counsel for Commercial Taxes. 2. Third respondent’s order dated 24-11-2009 granting stay of collection of the penalty within the time stipulated, is assailed herein. 3. The petitioner-public limited company is in the business of petroleum products, polyester, polymers etc. It is a registered dealer under the provisions of the Andhra Pradesh Value Added Tax Act, 2005 [for short ‘the Act’] and the Central Sales Tax Act, 1956 and an assessee on the rolls of the 1st respondent. The petitioner collected tax at 4% on aviation turbine fuel sold to aircrafts, having maximum takeoff mass of less than 40000 kilograms and remitted the same to the department with its monthly returns. In this factual scenario, during the years 2007- 2008, the petitioner effected sale of aviation turbine fuel to various foreign aircrafts, a transaction exempt from tax under Section 3 of the Foreign Aircraft (Exempt from Taxes & Duties on Fuels and Lubricants) Act, 2002 (Central Act 36 of 2002). The 1st respondent- assessing authority rejected the returns filed by the petitioner and brought to tax a turnover of 17,09,98,740/- and levied tax at different rates, in all of Rs.4,22,25,725/- and interest thereon to a tune of Rs.50,67,087/- through the order dated 21-03-2009, rejecting the petitioner’s objections to a claim on application of the rate of tax under Section 14 (ii) (d) of the Act 1956. There against, the petitioner preferred an appeal to the 2nd respondent and applied for stay. The 2nd respondent by order dated 18-05-2009 rejected the application for stay on the ground that there was no notification by the State Government under the Act exempting tax at the rates specified under the said Act for the sale of aviation turbine fuel. 4. Assailing the order of the 2nd respondent dated 18-05-2009 declining grant of stay, the petitioner preferred a revision before the 3rd respondent and when the 1st respondent initiated a coercive processes for recovery of the tax liability determined, the petitioner filed a writ petition and obtained some interim relief (not germane for the purposes of this writ petition). The 3rd respondent eventually disposed of the revision by the order dated 08-06-2009 granting stay of collection of the tax liability on condition of deposit of 50% of the balance disputed tax. 5. While so, the 1st respondent passed orders dated 21-08-2009 imposing penalty in purported exercise of the clause under Section 53 (1) (ii) of the Act on the ground that non-payment of tax at 33% under the Act constituted under declaration of tax. The petitioner preferred an appeal there against to the 2nd respondent along with an application for stay. The 2nd respondent declined stay, petitioner preferred a revision to the 3rd respondent, which was rejected by the order dated 24-11-2009, impugned herein. 6. Prima facie, in view of the provisions of Section 14(ii) (d) read with Section 15 and the definition of ‘declared goods’ in Section 2 (c) of the Central Sales Tax Act, 1956, the petitioner is seem to have an eminently arguable case against the very imposition of the tax liability, which is pending in the substantive appeal preferred by the petitioner to the 2nd respondent. 7. On this analysis, infliction of penalty and at any rate the rejection thereof by the appellate authority and its confirmation in substance by the revisional authority by imposing the onerous condition of payment of 50% of the penalty, appears an irrational exercise of discretion. 8. For the aforesaid reasons, we consider it appropriate to allow this writ petition, granting stay of collection of the penalty of Rs.1,05,56,431/-, as determined by the order of the 1st respondent dated 21- 08-2009 pending disposal of the petitioner’s appeal by the 2nd respondent (directed against the assessment order dated 21-03-2009 passed by the 1st respondent). The 2nd respondent, Sri P.Balaji Varma, Special Standing Counsel for Commercial Taxes, submits, should be able to dispose of the appeal expeditiously. Recording his contention, the 2nd respondent is directed to dispose of the appeal preferred by the petitioner expeditiously and in any event within a period of four weeks from the date of receipt of a copy of this order. The petitioner shall cooperate with the 2nd respondent to ensure the expeditious disposal of the appeal. There shall be no order as to costs. ___________________ GODA RAGHURAM, J ___________________ G.V.SEETHAPATHY, J December 15th 2009. Lrkm/Bss.