IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE EIGHTH DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 14587 of 2008 Between: M/s.Baljaj Auto Finance Ltd, 1st Floor 19-3-7th Cross Srinivasapuram Tirupathi Rep. by its Area Manager(Credit& Operation) Mr.K.Chandrasekhar ..... PETITIONER AND 1 The Commercial Tax Officer Tirupathi II Circle Tirupathi 2 The Commissioner of Commerical Taxes Governement of A.P Hyderabad 3 The Govt of A.P rep.by its Secretary Revenue(CT) Department Secretariat Buildings 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 issue an appropriate writ or order or direction more particularly one in the nature of writ of Mandamus (a) declaring the action of the 1st respondent in passing the impugned assessment order dt.12-06-2008 in From VAT 305 for the tax period 2005-06 and 2006-07 under the AP VAT act 2005 as illegal arbitrary high handed without authority of law and jurisdiction and in violation of principles of natural justice and set aside the same and declare that the petitioner is the capacity of an agent of borrower and not in the capacity of the owner of the motor vehicles and also declare that the view of the non availability of the input tax in terms of Rule20(2) (a) there in no tax liability on the petitioner and (b) Alternatively even the petitioner is treated a dealer in view of the availability of notional credit in terms of Ruls20(3)(a) there is no liability of tax on the sale of second hand vehicle by the petitioner and to pass Counsel for the Petitioner: MR.BHASKAR REDDY VEMIREDDY Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following : ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of mandamus declaring action of the 1st respondent in passing the order dt.12.06.2008 in From VAT 305 for the years 2005-06 and 2006-07 as illegal and arbitrary consequently to set aside the same and declare that the petitioner is not liable to pay the tax in dispute in view of the non availability of the input tax credit or in the alternative, it is prayed that in view of the availability of notional credit in terms of Ruls20(3)(a), there is no liability of tax on the sale of second hand vehicle by the petitioner, the present writ petition is filed. The petitioner is a Limited Company registered under the Companies Act. Its activity is to advance money to its customers for purchase of motor vehicles. The petitioner, in terms of the agreement, has a right to seize the vehicles in case of default in repayment and sell the same for realisation of the advanced amount. According to the petitioner, it is not business, which requires registration under the provisions of the A.P.VAT Act. While so, the first respondent has issued notice dated 3.5.2008 proposing to levy tax and since there was delay in filing objections, the first respondent passed the impugned order confirming levy of tax. Hence, the present writ petition. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes. It is submitted by the learned counsel for the petitioner that since the Head Office of the petitioner company is situated at Pune, there occurred some delay in filing the objections to the notice issued by the Assessing Officer proposing to levy tax. He also contends that had the Assessing Officer granted some time to file objections, the petitioner would have proved that as there is no input tax credit availability under Rule 20(2)(a) of the Act, in respect of sale of automobiles by a dealer who is not a dealer in Automobiles, there is no liability under VA T Act on resale of such vehicles. It appears that the only grievance of the petitioner is that no opportunity was afforded to it to put forth its claim, before the Assessing Authority. 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 1/3rd of the disputed tax amount, as per the impugned order, within a period of six weeks from today and on such deposit, the respondents are directed not to take coercive steps for recovery of the balance disputed amount. The petitioner is also entitled to file objections before the Assessing Authority to the impugned notice within the time stipulated, in which event, the Assessing Officer is directed to pass appropriate order in accordance with law. Default of the petitioner in complying with the order of depositing 1/3rd of the disputed tax amount now ordered, will result in the impugned order becoming operative. With these directions, the writ petition is disposed of. No order as to costs. ____________________ Justice T.Meena Kumari _______________________ Justice Ramesh Ranganathan July 8, 2008 Copy in one week //BO// MAS ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{BMR}