*THE HONOURABLE SRI JUSTICE B PRAKASH RAO AND THE HON’BLE SRI JUSTICE G BHAVANI PRASAD +WRIT PETITION NO. 20128 OF 2009 %14.7.2010 #M.Siva Ramakrishna ….petitioner Vs. $The Government of A.P. & ors …. Respondents !Counsel for the Appellants: Mr C V R Rudra Prasad Counsel for the Respondents: Smt N Shoba, G P for Mines & Geology and G P for Revenue <Gist : >Head Note: ? Cases referred:2009 (6) ALD 59 (SC) THE HONOURABLE SRI JUSTICE B.PRAKASH RAO AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN W.P.No.16100 of 2010 ORDER: (Per RR,J) Heard Sri S.R.Ashok, Learned Senior Counsel appearing on behalf of the petitioner and Sri P.Balaji Varma, learned Standing Counsel for Commercial Taxes. At their request, the Writ Petition is being disposed of at the stage of admission. The order under challenge in this writ petition is the notice issued by the 4th respondent, dated 23-6-2010 calling upon the 5th respondent to make payment of Rs.11,05,60,981=00 due towards penalty for the tax period 1-4-2005 to 30-11-2007. The petitioner is a Government of India Public Sector Undertaking, and is carrying on business in refined crude oil and sale of petroleum products like Kerosene etc. It is a registered dealer on the rolls of the Commercial Tax Officer, Kadapa (1st respondent). For the tax period April, 2005 to August, 2007 the petitioner supplied Blue Pigmented Kerosene to oil distributing companies, filed its returns and paid tax at 4% under Entry 40 of IV Schedule of the A.P.V.A.T Act. The Assistant Commissioner (CT) Audit issued notice on 10-10-2007, for the tax period April, 2005 to August, 2007, on the ground that the Superior Kerosene Oil sold by the petitioner could not be classified under Entry 40 of the IV Schedule notwithstanding that it was sold through the Public Distribution System in the State. The Assistant Commissioner was of the view that Kerosene was a residual item and was taxable at 12.5%. The Assistant Commissioner rejected the objections filed by the petitioner, and passed Assessment Order dated 30-10-2007 levying tax at 12.5%. Aggrieved thereby, the petitioner preferred an appeal before the Appellate Deputy Commissioner which was dismissed by order dated 10- 9-2008, aggrieved by which the petitioner preferred appeals before the Sales Tax Appellate Tribunal in T.A.121 of 2009 and T.A.122 of 2009. Along with the appeals the petitioner filed stay applications before the 3rd respondent. In the interregnum, the entire disputed tax of Rs.44,22,43,935/- was recovered by the department from the petitioner. While matters stood thus, the petitioner submitted a representation on 23- 07-2008 to the Commissioner of Commercial Taxes seeking waiver of interest and penalty. The petitioner claims that the Commissioner had stipulated deposit of the interest amount as a condition for recommending waiver of penalty, and accordingly they paid Rs.4,32,05,100/- on 30-5- 2008 and Rs.1,93,24,229/- on 28-7-2008. The petitioner’s application for waiver was rejected by proceedings dated 14-6-2010, and subsequently the 4th respondent issued notice dated 23- 6-2010. Sri S.R. Ashok, Learned Senior Counsel appearing on behalf of the petitioner, would contend that the Kerosene supplied by the petitioner, through the public distribution system in the State of Andhra Pradesh, fell within the ambit of Entry 40 Schedule IV and the rate of tax applicable was 4% and not 12.5%. Learned Senior counsel would submit that, in any event, the petitioner has already paid more than Rs.46 crores towards tax and interest as against the penalty claimed by the respondent of around Rs. 11 crores. Learned counsel would contend that, since a substantive appeal is pending before the Tribunal, it is but appropriate that the petitioner be granted stay pending disposal of the said appeal. We do not propose to examine the contentions, urged before us, on merits since a substantive appeal is pending adjudication before the Sales Tax Appellate Tribunal. Suffice to hold that, since the petitioner has already paid more than Rs.46 crores towards a total liability of Rs.57 crores towards tax, interest and penalty, we consider it appropriate to set aside the impugned garnishee notice issued by the 4th respondent dated 23-6-2007. It is made clear that after the appeals, now pending before the Sales Tax Appellate Tribunal, are disposed of it is open for the respondents to take action in accordance with law. The Writ Petition is, accordingly, disposed of. No costs. __________________ (B.PRAKASH RAO,J) __________________________ (RAMESH RANGANATHAN,J) Dated:07th July, 2010 grk