IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE EIGHTEENTH DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 12609 of 2008 Between: M/s. Mahindra & Mahindra Limited (Transport Solutions Group) " Mahindra House" H.No. 1-7-1, Park Lane, TSR Complex, Secunderabad - 500 003, Rep. by its Regional Sales Manager, Mr. Rajwinder Singh. ..... PETITIONER AND 1 Assistant Commissioner (CT) LTU, Begumpet Division, Hyderabad. 2 Appellate Deputy Commissioner (CT), Punjagutta Division, 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 Writ of Mandamus or any other appropriate Writ or Order o Direction declaring the action of the 1st respondent in issuing notice dated 10-6-2008 for collection of disputed penalty of Rs.28,61,477/- for the assessment year 2005- 2006 as arbitrary, contrary to the provisions of the A.P.VAT Act and also in violation of principles of natural justice and consequently grant stay of collection of disputes penalty of Rs.28,61,477/- for the assessment year 2005-2006 pending disposal of the appeal before the Hon'ble Sales Tax Appellate Tribunal and pass Counsel for the Petitioner: MR.SHAIK JEELANI BASHA 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 first respondent in issuing notice dated 10.6.2008 for collection of disputed penalty of Rs.28,61,477/- for the assessment year 2005-2006, as illegal and arbitrary and contrary to the provisions of the VAT Act and to consequently grant stay of collection of disputed penalty, pending appeal before the Sales Tax Appellate Tribunal, the petitioner filed this writ petition. The petitioner is a Limited Company incorporated under the Companies Act and a registered dealer on the rolls of the Commercial Tax Officer, SD Road, Secunderabad. While so, the first respondent issued penalty notice dated 25.10.2007 proposing to levy penalty inasmuch as the petitioner is an unregistered dealer and accordingly, it is liable to pay penalty of 25% of the amount of tax due prior to the date of registration in terms of Sec. 49(2) of the VAT Act. The petitioner herein submitted its reply on 1.11.2007, but the first respondent without considering the same, issued proceedings dated 21.11.2007 confirming the proposed penalty of Rs.28,61,477/-. Aggrieved by the same, the petitioner preferred an appeal to the second respondent on 5.12.2007, along with an application seeking stay of collection of disputed penalty. The second respondent has rejected the stay petition by order dated 14.12.2007. Pursuant to the said rejection by the second respondent, it is stated that first respondent is contemplating to take coercive steps by using Garnishee Notice to the banker of the petitioner. Hence, the present writ petition. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for the respondents. It is submitted by the learned counsel for the petitioner that pending appeal before the Tribunal, the respondents are contemplating to take coercive steps for recovery of the disputed penalty amount, in which event, the very purpose of filing appeal will be frustrated. We have gone through the record. We feel that the interest of justice would have been met if stay was granted pending Appeal, subject to the condition of the petitioner depositing 25% of the penalty amount. Accordingly, the writ petition is disposed of directing the petitioner to deposit 25% of the penalty amount within a period of six weeks from the date of receipt of a copy of this order and the respondents are directed not to take coercive steps for recovery of the balance amount, pending appeal. The deposit of amount shall be without prejudice to the rights of the petitioner in Appeal. If any amount has already been paid by the petitioner, the same shall be given credit. The writ petition is accordingly disposed of. No costs. ____________________ T.MEENA KUMARI, J. ___________________________ RAMESH RANGANATHAN, J. June 18, 2008 MAS ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{SPJS}