IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FOURTH DAY OF APRIL, TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.PRAKASH RAO and THE HON'BLE MR JUSTICE P.S.NARAYANA WRIT PETITION NO : 4548 of 2008 Between: M/s. Godrej Agrovet Ltd. I.D.A. Kondapally, Krishna District, rep. by its authorised Signatory, Mr.T.K.Sethuraman. ..... PETITIONER AND The Commercial Tax Officer, Nandigama Circle, Bhavanipuram, Vijayawada-12, Krishna District. .....RESPONDENT 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 (A) declaring Section 16 (3) (a) of the Andhra Pradesh General Sales Tax Act in so far as authorizing levy of interest at a rate more than 12% as arbitrary, unreasonable, unconstitutional as violative of Article 14 of Constitution of India; (B) declaring that the petitioner is entitled for interest of Rs.4,41,660/- on the refund amount of Rs.9,13,889/- for the year 1994-95 from 08-07-1999 to 18-07-2003 and interest of Rs.7,782/- on the refund amount of Rs.33,833/- for the year 1997-98 from 20-08-2001 totaling to Rs.4,49,442/- as per the provisions under Section 33 of the Andhra Pradesh General Sales Tax Act; (C) declaring the action of the respondent in passing the impugned order dt. 26.6.2007 basing on the audit report after four years levying interest on the tax amount for the year 1999-2000 already paid/adjusted without reference to the order dated 18-07-2003 and without granting interest on the refund amounts due to the petitioner for the assessment years 1994-95 and 1997-98 as arbitrary illegal, excessive and unsustainable and consequently (D) set aside the order dated 26-06-2007 of the respondent or in the alternative directing the respondent to adjust the interest amount of Rs.3,91,738/- levied for the year 1999-2000 from out of the interest amount of Rs.4,49,442/- payable to the petitioner for the years 1994- 95 and 1997-97 and refund the balance amount of Rs.57,704/- to the petitioner forthwith and (E) to pass such other order or orders. Counsel for the Petitioner:MR.P.GIRISH KUMAR Counsel for the Respondent No.: K.Raji Reddy, Spl.S.C.for Commercial Taxes. The Court made the following : O R D E R (Per the Hon’ble Sri Justice B.Prakash Rao): Heard Sri P.Girish Kumar, learned counsel for the petitioner, and Sri K.Raji Reddy, learned Standing Counsel appearing on behalf of the respondents, and at their request, the main writ petition itself is taken up for disposal at the stage of admission. In this writ petition, the petitioner, who is an assessee under the General Sales Tax, assailed the order dated 26-06-2007 passed by the respondent, whereunder the respondent, after giving notice on 08- 02-2007 for imposing penal interest under Section 16(3)(a) of the Andhra Pradesh General Sales Tax Act, 1957, passed orders levying interest. The contention on behalf of the petitioner is that the respondent had already adjusted the tax due from the petitioner for the assessment year 1999-2000 from out of the refund amount due to the petitioner from the department for the assessment years 1994-1995 and 1997-98, which is evident from the proceedings dated 18-07-2003, without calculating or levying interest both on the refund amount as well as on the tax amount due to the department and the petitioner had paid the balance demand. Having already adjusted the amount, now after long lapse of time, the respondent chooses to impose penal interest, without considering the claim of the petitioner about his entitlement to interest on refund amount. Hence, the writ petition. Having heard the learned counsel for the parties and also on perusal of the material available on record, it is quite apparent that there is no dispute with regard to the fact that interest was not imposed when the order dated 18-07-2003 was passed long back. It is only now a fresh notice has been given, to which the petitioner has not filed any explanation, but yet, that does not dispense with the obligation of the respondent for holding an enquiry and giving an opportunity of hearing to the petitioner. Admittedly, no opportunity of hearing was given to the petitioner to make his submissions before passing the impugned order. In view of the same, we are of the view that the impugned order suffers from vices of principles of natural justice and the matter requires to be considered afresh after giving notice and opportunity of hearing to the petitioner. We, accordingly, allow the writ petition and set aside the impugned order. The respondent is directed to pass fresh orders, on merits, in accordance with law, after giving notice and opportunity of hearing to the petitioner. The petitioner is at liberty to file his explanation to the show cause notice, within a period of four weeks from today, setting forth all his objections and claims, whatsoever, to which he is entitled to in law. No order as to costs. __________________ B.Prakash Rao, J Dated 4th March, 2008 __________________ P.S.Narayana,J vrn ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. The Commercial Tax Officer, Nandigama Circle, Bhavanipuram, Vijayawada-12, Krishna District. 2. Two C.D. copies. Form-NIC-OGS/WP{KURR}