THE HON’BLE Mrs. JUSTICE T. MEENA KUMARI AND THE HON’BLE Ms JUSTICE G. ROHINI WRIT PETITION No.1036 of 2008 ORAL ORDER: (Per the Hon’ble Mrs. Justice T. Meena Kumari) This writ petition is filed seeking a writ of mandamus to declare the action of the 3rd respondent in rejecting the application filed by the petitioner seeking stay of recovery of the disputed penalty of Rs.82,908/- for the assessment year 2001-02 pending appeal before the Sales Tax Appellate Tribunal through the impugned proceedings dated 23.10.2007 in CCT’s Ref No.LIII(3)657/2007 as illegal, arbitrary and to set aside the same and consequently to restrain the 1st respondent from taking any coercive steps for recovery of the disputed penalty amount pending appeal before the Sales Tax Appellate Tribunal. The petitioner is a registered dealer under APGST & CST Acts carrying on business in purchase and sale of paddy, rice, groundnut and gingelly seeds and is an assessee on the rolls of the 1st respondent/Deputy Commercial Tax Officer. The assessments for the years 2000-01; 2002-02; 2002-03 were completed by the 2nd respondent by orders dated 17.5.2001; 27.6.2002 and 10.4.2003, respectively, duly granting exemption on purchase value of groundnut claimed by the petitioner. The assessment for the year 2002-03 resulted in refund of Rs.90,142/-. However, as the petitioner was not keeping good health, he stopped his business and intimated the same to the department that he had stopped his business with effect from 1.4.2003. At that juncture, the Deputy Commissioner, Chittoor Division, initiated revision proceedings on the ground that he received a report from the Commercial Tax Officer to the effect that the buyer of the petitioner, namely M/s Sri Maruthi Traders, Mydukur Road, Proddutur is not an existing and identifiable dealer and that his registration had been cancelled, and, therefore, petitioner’s claim for exemption cannot be accepted. It is the case of the petitioner that in the first week of October, 2004, the Deputy Commissioner obtained an enquiry report dated 12.10.2004 from the Commercial Tax Officer, Proddutur behind the back of the petitioner and relying upon the alleged enquiry report, the Deputy Commissioner, Chittoor Division initiated revision proceedings and issued show cause notice dated 14.10.2004 proposing to revise the assessments of the petitioners for the years 2001-01; 2001-02 and 2002-03. Though the petitioner filed detailed objections, the Deputy Commissioner, confirmed the revisions through proceedings dated 8.11.2004. The petitioner submits that against the orders of the Deputy Commissioner, Chittoor Division, the petitioner filed Appeals before the Sales Tax Appellate Tribunal, which are pending consideration. Pending disposal of the Appeals, the petitioner also filed stay applications before the Addl. Commissioner. Even before the disposal of the stay applications, the petitioner was forced to pay the disputed tax and the entire amount of tax pursuant to the revision orders of the 1st respondent was paid on 21.2.2005. The Additional Commissioner rejected the stay applications on 31.3.2005. When the matters stood thus, the 1st respondent initiated proceedings proposing to levy penalty under Section 7A(2) of the APGST Act and issued show cause notice dated 26.9.2005. The petitioner filed detailed objections contending that the very initiation of revision proceedings by the Deputy Commissioner, Chittoor Division and levy of tax is without authority of law. The petitioner also contended that the 1st respondent cannot proceed to take any action for levying penalty under Section 7A(2) of the APGST Act since he has no jurisdiction to exercise power under Section 7A(2) of the Act at a belated stage. It was further contended that if the department doubts the genuineness of the declarations, action can be initiated against the person who has given such declarations. The petitioner contended that sale of groundnut was made to M/s Sri Maruthi Traders, Maidukur Road, Proddutur and declarations were obtained from the purchaser to that effect. Since groundnut is taxable at the last purchase point, no tax can be levied and collected from the petitioner since the petitioner is not the last purchaser in the State. Further, at the time of finalizing the assessments, the 1st respondent verified the documents and also the existence of purchasing dealer and having satisfied about the genuineness of the claim, granted exemption. The objections filed by the petitioner were not considered in correct perspective and the 1st respondent confirmed the penalty for all the three years through proceedings dated 18.1.2006. Challenging the penalty orders, the petitioner filed Appeals before the 2nd respondent. The 2nd respondent without considering the objections raised by the petitioner approved the orders passed by the 1st respondent, through his orders dated 2.5.2007. Against the said orders, the petitioner preferred further appeals before the Sales Tax Appellate Tribunal, which are pending adjudication. Since Sales Tax Appellate Tribunal is not vested with the power to grant stay, the petitioner filed stay applications before the 3rd respondent seeking stay of the disputed penalty, pending appeals before the Sales Tax Appellate Tribunal. The 3rd respondent rejected the stay applications through impugned orders dated 23.10.2007. Hence, the writ petition. Having heard the learned Counsel for the petitioner as well as the learned Special Standing Counsel for Commercial Taxes appearing for the respondents and in view of the fact that the Appeals preferred by the petitioner are pending before the 2nd respondent, we are of the opinion that interests of justice would be adequately met if stay is granted pending Appeal subject to certain conditions. Accordingly, the Writ Petition is disposed of granting stay of recovery of the disputed penalty pending Appeal before the Sales Tax Appellate Tribunal subject to the petitioner depositing one- fourth of the disputed penalty, after giving credit to the amounts already paid, within a period of four weeks from today. However, in the event of failure to deposit one fourth of the disputed tax within the time stipulated above, the impugned order would become operative. It is made clear that the amount deposited in compliance with this order shall be without prejudice to the rights of the petitioner in the Appeal. With the above observation, the Writ Petition is disposed of. No costs. _______________________ T.MEENA KUMARI, J. ______________ G. ROHINI, J 24th January, 2008. Kgr THE HON’BLE Mrs. JUSTICE T. MEENA KUMARI AND THE HON’BLE Ms JUSTICE G. ROHINI WRIT PETITION No.1036 of 2008 Between: N. Thiruvengadam Chetty. .. Petitioner. And The Dy. Commercial Tax Officer (FAC), Puttur, Chittoor District and others. .. Respondents.