IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY SEVENTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH and THE HON'BLE MR JUSTICE SANJAY KUMAR WRIT PETITION NO : 8686 of 2009 Between: M/S. Bio Veda Action Research Private Limited, 11-4-1/1, Srinivasa Colony, Saroornagar, Hyderabad, Rep. by its Area Manager- Sales, Mr. Naresh Gudala. ..... PETITIONER AND 1 The Deputy Commercial Tax Officer, Saroornagar Division, Hyderabad. 2 The Appellate Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad. 3 The Additional Commissioner (CT) Legal, Andhra Pradesh, Hyderabad. 4 The Deputy Commissioner (CT), Saroornagar Division, Hyderabad. 5 The Commercial Tax Officer, Saroornagar Circle, Hyderabad. 6 Citi Bank, Rep. by its Manager, Begumpet Branch, Hyderabad. .....RESPONDENT(S) 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 to (a) declare Rule 59(5) of the APVAT Act as ultra vires Section 2(4) of the APVAT Act and struck down the same; and (b) declare that the order of the 3rd Respondent in CCT's Ref.No. LIII (4)/723/2008 as illegal, arbitrary and high handed and set aside the same and consequently restrain the 5th Respondent from taking any coercive steps for recovery of the balance disputed tax of Rs. 23,23,232/- out of total disputed tax of Rs. 46,43,464/- pending disposal of the appeal before the Sales Tax Appellate Tribunal in T.A.No. 756 of 2008. Counsel for the Petitioner: MR.BHASKAR REDDY VEMIREDDY Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following : ORDER: (Per Sri Justice Sanjay Kumar) Petitioner Company suffered assessment to tax under the Andhra Pradesh Value Added Tax Act, 2005 (hereinafter referred to as ‘the Act’) for the period April, 2005 to December, 2007 under orders dated 11.3.2008 of the Deputy Commercial Tax Officer, Saroornagar Division, Hyderabad. Aggrieved thereby, the petitioner company preferred an appeal before the Appellate Deputy Commissioner (CT), Hyderabad, which was dismissed by order dated 18.9.2008. Against this order, the petitioner preferred a further appeal to the Sales Tax appellate Tribunal, Hyderabad on 31.10.2008. The petitioner has paid 50% of the disputed tax of Rs.46,43,464/-. The said appeal was taken on file as T.A.No.756 of 2008. Seeking grant of stay pending the appeal, the petitioner approached the Additional Commissioner (CT) Legal, Hyderabad. By order dated 17.11.2008 the Additional Commissioner (CT) Legal, Hyderabad granted stay of collection of tax on condition that the petitioner pays the remaining 50% of the disputed tax as well as penalty within four weeks from the date of the order. Against the said order, the petitioner filed W.P.No.827 of 2009 and during the pendency of the said writ petition, the petitioner also paid the entire penalty amount of Rs.11,60,866/-. Learned counsel for the petitioner stated that the said writ petition was subsequently withdrawn reserving liberty to file a fresh writ petition. Thereafter, the present writ petition was filed challenging the validity of Rule 59 of A.P.VAT Rules (hereinafter referred to as ‘the Rules’) inasmuch as it is the case of the petitioner that the Deputy Commercial Tax Officer, Saroornagar, Hyderabad has no jurisdiction to make an assessment against the petitioner under the Act. It is the case of the petitioner company that its products fall within the category of ‘drugs and medicine’ as defined in Section 3(b) of the Drugs and Cosmetics Act, 1940 and the same are not exigible to tax at 12.5%, but only at 4%. Though the petitioner challenged the validity of Rule 59(5) of the Rules on the ground that the same is ultra vires Section 2(4) of the Act, learned counsel for the petitioner fairly submitted that his client was not keen on pressing this challenge as against the validity of the said Rule, pending disposal of its appeal. Taking note of the said submission, the writ petition is disposed of granting stay of collection of the disputed tax pending disposal of the appeal before the Sales Tax Appellate Tribunal, Hyderabad, subject to the condition that the petitioner company deposits 50% of the disputed tax within a period of six weeks from the date of receipt of a copy of this order. Any amounts already paid or deposited shall be given due credit while computing the amount payable under this order. The writ petition is accordingly disposed of. There shall be no order as to costs. ________________ V.ESWARAIAH, J. ________________ SANJAY KUMAR, J. 27.4.2009 kpr