IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE SEVENTEENTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 20149 of 2008 Between: M/s. Usha Mullapudi Cardiac Centre, 222, Gajularamaram, Jeedimetla, Hyderabad - 500 055. Rep by its Managing Trustee, Dr. Ratnam V. Mullapudi ..... PETITIONER AND 1 The Appellate Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad. 2 The Commercial Tax Officer, IDA, Gandhinagar Circle, Hyderbad. .....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 Writ of Mandamus or any other appropriate writ or order or direction declaring the action o the 2nd respondent in issuing notice dated 04-9-2008 directing the petitioner to pay the balance disputed tax and penalty even before the orders of the 1st respondent was served on the petitioner on 08-9-2008, as arbitrary, contrary to the provisions of the APGST act and also in violation of principles of natural justice and Rule of law and consequently grant stay of collection of disputed tax of Rs. 13,26,678/- for the assessment year 2003-2004, pending disposal of the appeal before the Hon'ble Sales Tax Appellate Tribunal, Hyderabad, and to pass such other suitable orders as this Court may deems ﬁt and proper in the circumstances of the case. Counsel for the Petitioner: MR.SHAIK JEELANI BASHA Counsel for the Respondents: GP FOR COMMERCIAL TAX The Division Bench of this Court made the following order: THE HON'BLE MRS JUSTICE T.MEENA KUMARI A N D THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 20149 of 2008 O R D E R : (Per the Hon’ble Smt. Justice T. Meena Kumari) The writ petition is ﬁled seeking a Writ of Mandamus or any other appropriate writ or order or direction to declare the action o the 2nd respondent in issuing notice dated 04-9-2008 directing the petitioner to pay the balance disputed tax and penalty even before the orders of the 1st respondent was served on the petitioner on 08-9-2008, as arbitrary, contrary to the provisions of the APGST act and also in violation of principles of natural justice and Rule of law and consequently grant stay of collection of disputed tax of Rs. 13,26,678/- and disputed penalty of Rs.13,26,678/- for the assessment year 2003-2004, pending disposal of the appeal before the Hon'ble Sales Tax Appellate Tribunal, Hyderabad, and to pass such other suitable orders as this Court may deems fit and proper in the circumstances of the case. 2. The case of the petitioner is that it is a trust, carrying on medical services, trading of drugs and medicines. It is stated that the petitioner is a registered dealer on the rolls of the second respondent both under Central Sales Tax Act and AP General Sales Tax Act. The second respondent proposed to assess the petitioner by issuing show cause notice holding that as seen from the balance sheet along with the audit report for the year 2003-04 under the Act, the second respondent noticed that in the income and expenditure schedules, the assesses have eﬀected the sales on the goods and not reported and the same are proposed to levy tax. It is stated that the second respondent proposed to levy tax on a turn over represents surgical receipts not covered, purchase details and a turn over represents to Blood Bank receipts and is treated income on blood sales and levy of tax on food and beverages supplied to the in-patients under section 5-C of the Act. Against the said proposal in the notice, the petitioner ﬁled reply dated 02-3-2007 and submitted on 05-3-2007 contending iner alia that the sales of food and beverages to in- patients is exempt from tax as per GO Ms.No.1091 dated 10-6- 1957, the petitioner contended that they have received some amount by performing many lab investigations and diagnostics services to its patients like Angiogram and the charges collected for these tests like Floroscopy were accounted under OP receipts and the charges received pertains to medical services and no sale of goods are involved and requested to exempt from levy of tax. 3. It is stated that the second respondent conﬁrmed the proposals made in the show cause notice except allowing exemption with regard to purely service charges on surgicals, IP Blood Bank receipts and purchase of dairy products and purchase of provisions and brought to demand to an extent of Rs.13,26, 678/- by proceedings dated 08-3-2007. 4. Aggrieved by the assessment proceedings of the second respondent, the petitioner ﬁled an appeal before the ﬁrst respondent on 22-5-2007. But the ﬁrst respondent through proceedings dated 23-8-2008 dismissed the appeal without considering the contentions raised by the petitioner and the same was served on 08-9-2008. Against the orders passed by the ﬁrst respondent, dated 25-8-2008, the further appeal before the Sales Tax Appellate Tribunal, Hyderabad to be ﬁled by the petitioner is on 07-11-2008 under section 21 of the APGST Act. However, the second respondent, issued notice dated 4-9-2008 directing the petitioner to pay the balance amount of tax and penalty within seven days from the date of receipt of notice, though the petitioner has got time to ﬁle appeal before the Sales Tax Appellate Tribunal, Hyderabad till 07-11-2008 and the petitioner has already paid 50% of the disputed tax as per orders passed by this Court in WP.No.19278 of 2007, dated 11-9-2007, when the petitioner has approached this Court when pending appeal before the ﬁrst respondent and the stay was rejected by the ﬁrst respondent as well as by the Revisional Authority as per section 19 of the APGST Act. In view of the orders passed by this Court dated 11-9-2007, the petitioner had already paid 50% of the disputed demand to the second respondent and now the second respondent issued notice for the remaining balance of 50% of the disputed tax. 5. It is submitted by the learned counsel for the petitioner that though several contentions were raised before the respondents but the second respondent had issued notice and is contemplating to take coercive steps for recovery of the disputed tax. 6. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Tax. 7. In the facts and circumstances of the case, without going into the merits of the matter, we are of the opinion that the writ petition can be disposed of at the stage of admission, directing the petitioner to deposit 50% of the disputed tax amount together with 25% of the penalty within a period of eight weeks from today and the respondents are directed not to take coercive steps for recovery of the tax, pending finalization of the appeal by the Sales Tax Appellate Tribunal. It is stated that when pending appeal before the ﬁrst respondent and the stay was rejected and this court passed orders in WP.No.19278 of 2007, dated 11-9-2007 and in pursuance of the said orders passed by this court, the petitioner had already paid 50% of the disputed demand to the second respondent and now the second respondent again issued notice for the remaining balance of 50% of the disputed tax. It is also made clear that the amounts already paid, if any, shall be given credit to the above stipulated sum. 8. With these directions, the writ petition is disposed of at the stage of admission. No order as to costs. _________________________ JUSTICE T. MEENA KUMARI. ________________________________ JUSTICE RAMESH RANGANTHAN. 17-9-2008 I s L NB: Furnish CC in two days. B/o. I s L ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies