IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTYFIFTH DAY OF MARCH TWO THOUSAND AND TEN PRESENT THE HON'BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO. 6 3 9 8 of 2010 Between : M/s. IRIS Cyber tech Ltd., 5A, Venugal Rao Nagar, Hyderabad, Represented by its Director, Sri K.P.C. Rao ..... PETITIONER V/s. The Commissioner Tax Officer, Srinagar Colony Circle, Hyderabad & 2-Ors. ..... RESPONDENTS Counsel for the Petitioner : Sri Bhasker Reddy Vemireddy Counsel for the Respondents: Govt.Pleader for Commercial Tax The Division Bench of this Court made the following : (Order follows 2nd page) THE HON'BLE SMT. JUSTICE T.MEENA KUMARI AND THE HON'BLE SRI JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION No. 6 3 9 8 of 2010 ORAL ORDER : { Per the Hon’ble Smt.Justice T.Meenakumari } Seeking a writ of mandamus to declare the action of the first respondent in insisting for payment of the disputed tax/penalty/interest through the impugned final notice dated 06-03-2010 for the assessment year 2005- 06, 2006-07 and 2007-08 and contemplating to take coercive steps for recovery of the disputed tax/penalty/interest even during pendency of appeals and stay applications before the second respondent as illegal, arbitrary and to set aside the same and restrain the first respondent from taking any coercive steps for recovery of the disputed penalty of Rs. 8,64,655-00 for the assessment year 2005-06 under the A.P. VAT Act, 2005 pending appeal before the second respondent and to pass such other suitable orders as this court may deems fit and proper in the circumstances of the case, the present writ petition has been filed. 2. The facts of the case are that the present writ petition has been filed by the Director of the petitioner-company, which is a Limited Company carrying on business in Computer Software and Computer Peripherals and is a registered dealer under the provisions of AP VAT Act, 2005 and CST Act, 1956 and is an assessee on the rolls of the Commercial Tax Officer, who is the respondent herein. For the assessment years 2005-06, 2006-078 and 2007-08, the petitioner-company filed its monthly returns reporting the turnovers scored and paid the applicable taxes. Thereafter the first respondent conducted audit and passed orders dated 20-11-2008 in Form-305 for the assessment years 2005-06 and 2006-07 wherein the first respondent rejected the claim of input tax credit claimed by the petitioner, which resulted in a liability of tax of Rs.27,87,209-00 for the assessment year 2005-06, Rs.26,64,191/- for the assessment year 2006-07 and for the assessment year 2007-08 the first respondent passed orders dated 14-10-2009 rejecting the claim of input tax credit which resulted in a demand of Rs.6,18,853/-. Challenging the same, the petitioner filed appeals before the second respondent contending inter alia that the rejection of claim of input tax credit by the first respondent is contrary to the provisions of the Act since the petitioner-company is entitled for input tax credit once it proves that it had purchased the goods from the local registered dealer and has valid tax invoices on hand. However, the second respondent dismissed the appeals for the assessment years 2005-06, 2006-07 through proceedings dated 16-2-2009 on untenable grounds. Questioning the same, the petitioner filed further appeals before the Sales Tax Appellate Tribunal, which are pending adjudication. It is stated that with reference to the assessment year 2007-08 though the appeal is pending before the second respondent, the second respondent however rejected the stay application through proceedings dated 09-2-2010. Challenging the stay rejection order, the petitioner company filed revision before the third respondent on 06-3-2010, which is pending adjudication. 3. While the things stood thus, it is stated that the first respondent passed orders levying penalty and interest through proceedings dated 26-11- 2009 for the assessment years 2005-06 and 2006-07. It is stated that challenging the orders passed by the first respondent in levying penalty and interest, the petitioner filed appeals before the second respondent on 08-1-2010 with a delay of four days which is within the condonable limits permissible under section 31 of the AP VAT Act, 2005. It is stated that the petitioner company filed stay application seeking stay of recovery of the disputed penalty and interest for the aforesaid assessment years. Now the appeals as well as the stay applications are pending before the second respondent. It is further stated that though the appeals and stay applications filed by the petitioner against the orders passed by the first respondent in levying penalty and interest for the assessment years 2005-06 and 2006-07 under the provisions of the AP VAT Act, 2005 and revision application seeking stay of recovery of the disputed tax for the assessment year 2007-08 before the third respondent are pending adjudication, the first respondent has issued the impugned notice dated 06-3- 2010 demanding payment of the disputed tax, penalty and interest for the assessment year 2005-06, 2006-07 and 2007-08 and is contemplating to take coercive steps. 4. It is submitted by the learned counsel for the petitioner that though several contentions were raised before the Appellate Deputy Commissioner, it has refused to grant stay vide the order impugned herein. It is submitted that pursuant to the rejection of stay by the Appellate Deputy Commissioner, the respondents are contemplating to take coercive steps for recovery of the disputed tax. 5. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes as well as the learned Government Pleader for Revenue. 6. In the facts and circumstances of the case, we are of the opinion that the writ petition can be disposed of at the stage of admission directing the petitioner to deposit half of the disputed penalty and interest, as per the impugned notice, within a period of six weeks from the date of receipt of a copy of the order but however, the respondents are directed not to take coercive step against the petitioner-company, pending finalisation of the appeals by the Appellate Deputy Commissioner. It is made clear that the amount paid, if any, shall be given credit to the above stipulated sum. 7. At this stage, the learned counsel for the petitioner, Sri Bhaskar Reddy Vemireddy has submitted across the bar that the penalty imposed in this case and also the connected cases, it is more than 200%. He further submitted that the petitioner-company would pay only Rs.20,00,000/- (Rs. Twenty lakhs only) in lumpsum in all the connected matters; namely, WP.Nos. 6396, 6397, 6398, 6399 and 6400 of 2010. 8. In view of the peculiar facts and circumstances of the case and having regard to the submissions made by the learned counsel for the petitioner across the bar, we deem it appropriate to dispose of the writ petition at the stage of admission granting interim stay subject to depositing/payment of Rs.20,00,000=00 (Rs. Twenty Lakhs only) within a period of six weeks from today, towards tax/penalty/interest in the peculiar circumstances of this writ petition and also WP.Nos. 6396, 6397, 6399 and 6400 of 2010 after giving credit to the amount already in deposit. 13. With these directions, the writ petition is disposed of at the stage of admission. However, in the circumstances there shall be no order as to costs. _____________________ Justice T.Meena Kumari ___________________________________ Justice Nooty Ramamohana Rao March 25, 2010. I s L N B : 1) Furnish CC of the order in two days. B/o. I s L THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE NOORTY RAMAMOHANA RAO WRIT PETITION No. 6 3 9 8 OF 2010 Judgment of the Division Bench delivered by the Hon'ble Smt. Justice T. Meenakumari) Circulation Entry No. 4 9 Date: 25-03-2010 COMPUTER No. 43 Court Master: I s L