IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE FIFTEENTH 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 : 20037 of 2008 Between: M/s. Rayalaseema Concrete Sleepers (P) Limited, 205, 206, Amarchand Sharma Complex, S.D. Road, Secunderabad-500003, rep. by its Sr. Manager- Legal, Mr. Sunil Palnitkar. ..... PETITIONER AND 1 The Commercial Tax Officer, Maharajgunj, Hyderabad. 2 The Deputy Commissioner (CT) Charminar Division, Hyderabad. 3 The Additional 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 to issue a Writ of Certiorari or any other appropriate writ or order or direction quashing the impugned stay rejection order passed by 3rd respondent dated 08.08.2008 in CCT's Ref.No.LIII(2)/568/2008 as illegal, arbitrary and unjustiﬁed and restrain the 1st respondent from taking any coercive steps for recovery of the disputed penalty of Rs.15,50,550/- for the assessment year 1997-98 under the APGST Act, pending disposal of the appeal before the Hon'ble Sales Tax Appellate Tribunal, Hyderabad in T.A.No.352 of 2004 and to pass such other suitable orders as this Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.S.DWARAKANATH 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 : 20037 of 2008 O R D E R : [ Per the Hon’ble Smt. Justice T. Meena Kumari ] 1. The writ petition is filed seeking to quash the impugned stay rejection order passed by the third respondent dated 08-08-2008 in CCT’s Ref.No.LIII (2)/568/2008 as illegal, arbitrary and unjustiﬁed and to restrain the ﬁrst respondent from taking any coercive steps for recovery of the disputed penalty of Rs.15,50,550-00 for the assessment year 1997-98 under A.P.G.S.T. Act, pending disposal of the appeal before the Sales Tax Appellate Tribunal, Hyderabad, in T.A.No.3 5 2 of 2004. 2. The facts of the case in brief as follows: : It is stated that the petitioner is a Private Limited Company and also a registered dealer under the provisions of A.P. General Sales Tax Act, 1957 (for brevity ‘the APGST Act’) and Central Sales Tax Act, 1956 (for brevity ‘the CST Act’), carrying on business in manufacture of sale of concrete sleepers and is an assessee on the rolls of ﬁrst respondent. The assessment for the year 1997-98 under the APGST Act was completed by the ﬁrst respondent through proceedings dated 16-8-1999 on the gross and net turn overs of Rs.10,50,20,611-00 and Rs.9,13,76,005-00 respectively levying tax at 10 %.. The Commercial Tax Oﬃcer, (Intelligence), Enforcement Wing, A.P., Hyderabad had inspected the business premises of the petitioner on 28-1-2001 and 30-1-2001. On veriﬁcation, he found that the petitioner had suppressed a turn over of Rs.31,01,100-00. Thereafter, the petitioner had been re-assessed by the second respondent in view of suppression of alleged turnover found on inspection by the Commercial Tax Oﬃcer. Subsequently, the petitioner paid the tax and agreed to compound the oﬀence by oﬀering to pay Rs.1,00,000-00 under section 32 of the Act for the said lapse. Thereafter, the second respondent proposed to levy penalty under section 14 (8) of the Act at ﬁve times the tax due at Rs. 3,10,110- 00. For levying the same the petitioner contested the same and ﬁled reply contending that the bonaﬁde mistake had occurred on the part of the company in depending on the short sighted oﬃcers, who have indulged in misconduct with apparent intention to please the management with their artiﬁcial performance and they were also punished for misconduct. The petitioner contended that though the petitioner paid tax and compounding fee pursuant to the inspection but it does not amount to a wilful suppression but only due to bonaﬁde mistake committed by its executives.. However, the second respondent had conﬁrmed the levy of penalty under section 14 (4) of the Act by order dated 12-1-2004. Aggrieved by the order passed by the second respondent, the petitioner ﬁled an appeal before the Sales Tax Appellate Tribunal on 06-4- 2004 in TA.No. 352 of 2004. The petitioner also ﬁled an application for stay of collection of disputed penalty of Rs.15,50,550-00 before the third respondent on 25-7-2008. But the third respondent through an order dated 08-8-2008 had refused to grant stay of collection of the disputed penalty. Pursuant to the orders passed by the third respondent, the ﬁrst respondent had issued notice dated 18-8-2008 seeking payment of the disputed penalty. 3. Sri S. Dwarakanath, the learned counsel representing the petitioner, M/s. Rayalaseema Concrete Sleepers (P) Ltd.., seeks to contend that the order of penalty passed by the second respondent is barred by time and in any case vitiated by unreasonable delay. Further the non- disclosure of turn over noticed and the petitioner had paid tax due thereon in a sum of Rs.34,00,753-00 at 10 % in March 2001 and also agreed to compound the oﬀence by oﬀering to pay Rs.1,00,000-00 under section 32 of the Act for the lapse under both the Acts. He further contended that due to the misadventure of the then staﬀ on whom heavy reliance was placed by the management had not reported the same but the second respondent ought to have seen that there is no wilful or contumacious conduct on the part of the company in the alleged suppression. It is a case of bonaﬁde mistake that occurred on the part of the company in depending upon the executives, who have indulged in misconduct with an intention to please the management. 4. The learned counsel had raised several contentions and relied upon the decision s of the Supreme Court in HINDUSTAN STEEL case reported in 25 STC at Page-211 and Cement Marketing Company Case reported in 45 STC Page-197 and contended that in any event the Deputy Commissioner ought to have treated the lapse as not wilful and could have levied penalty not exceeding one-half of the tax under section 14 (8) (b). Now the petitioner is hard pressed for funds and any attempt of the ﬁrst respondent for recovering the disputed penalty through coercive measures would adversely aﬀect the petitioner financially. 5. On the other hand, Sri A.V. Krishna Kaundinya, the learned Special Standing Counsel for the Commercial Taxes contended that though the petitioner did not disclose certain sales of concrete sleepers through the SCR in their returns and paid tax due on the suppressed turn over along with compounding fee of Rs. One lakh immediately after detection of suppression by the Commercial Tax Department and that the non- disclosure of sales of Concrete Sleepers was only a bonaﬁde mistake on the part of the petitioner is only to rectify the suppressed turn over. The Deputy Commissioner is justiﬁed in levying penalty ﬁve times tax due on the suppressed turn over. 6. Heard Sri S. Dwarakanath, the learned counsel for the petitioner and Sri A.V. Krishna Kaundinya, he learned special standing counsel for the Commercial Taxes. 7. It is submitted by the learned counsel for the petitioner that pending an appeal, the issuance of impugned proceedings demanding to pay penalty of Rs.15,50,550-00 is contrary to law. 7. We have gone through the record. We feel that the interest of justice would have been met if stay was granted pending appeal, subject to the condition of the petitioner depositing half of the disputed tax and 25 % of the penalty and interest. Accordingly, the writ petition is disposed at the stage of admission directing the petitioner to deposit 25 % of the penalty and interest within a period of two weeks from the date of the order and in the meanwhile the respondents are directed not to take coercive steps for recovery of the same, pending appeal. The deposit of amount shall be without prejudice to the rights of the petitioner in appeal. If any amount has already been paid by the petitioner, the same shall be given credit. 6. The writ petition is accordingly disposed of at the stage of admission. No costs. ________________________ JUSTICE T . MEENA KUMARI , ______________________________ JUSTICE RAMESH RANGANATHAN, 15-9-2008. I s L N B : 1) Operative Portion of the order by wire at party’s costs. 2) Furnish CC of the order in three days. B/o. I s L ... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{MSN}