IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY SIXTH DAY OF MARCH TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE V.ESWARAIAH and THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO : 3706 of 2009 Between: M/s. Coromandel Met Coke Industries, (Unit of Kalyaneswari Properties (P) Ltd.,) HIG 85, Madhavadhara, VUDA Layout, Near RTO Office, Visakhapatnam-530 018. Rep. by its Director Mr. Ashish Daruka. ..... PETITIONER AND 1 The Joint Commissioner (CT) Legal, Office of Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad. 2 The Commercial Tax Office, Dwarakanagar Circle, Visakhapatnam. 3 The Dy. Commercial Tax Office, VMU-II, Visakhapatnam. 4 The Branch Manager, State Bank of Hyderabad, Siripiram Branch, Visakhapatnam. 5 The Branch Manager, Axis Bank, Dwarakanagar Branch, Visakhapatnam. 6 The Principal Secretary, Revenue Department, Secretariat, Hyderabad. .....RESPONDENT(S) 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 or direction a) praying the Hon'ble Court to declare that the Rule 59 of VAT Rules, 2005 is ultra virus to Section 2 (4) of the A.P. VAT Act. b) praying the Hon'ble Court to declare that the disallowance of input tax credit to an extent of Rs. 4,97,707/- by the 3rd respondent by proceedings dated 29-7-2008 is contrary to Section 13(2) of the AP VAT Act read with Rules 20(1) and 37 of the AP VAT Rules and set aside the proceedings dated 29-7-2008 passed in Form VAT 305 as null and void; c) praying the Hon'ble Court to declare that the proceedings passed by the 3rd respondent dated 29.07.2008 passing a common order for three assessment years 2005-06 to 2007-08 is contrary to section 2(36) of the AP Vat Act. d) praying the Hon'ble Court to declare that the action of the 1st respondent in rejecting the stay application by proceedings, dated 31- 01-2009 in CCT Ref.No.LV(3)/56/2009 without considering all the contentions of the petitioner as arbitrary, contrary to law and in violation of principles of natural justice and rule of law and consequently grant stay of collection of disputed tax of Rs.4,97,707/- for the years 2005-06 to 2007- 08, and consequently revoke the garnishee notices dated 7-1-2009 and 21-1-2009 issued by the 2nd respondent to the 4th and 5th respondents pending disposal of the appeal before the Hon'ble Sale Tax Appellate Tribunal, Additional Bench, Visakhapatnam. Counsel for the Petitioner: MR.SHAIK JEELANI BASHA Counsel for the Respondent No.: GP FOR COMMERCIAL TAX WRIT PETITION NO : 3800 of 2009 Between: M/s. Coromandel Met Coke Industries, (Unit of Kalyaneswari Properties (P) Ltd.,) HIG 85, Madhavadhara, VUDA Layout, Near RTO Office, Visakhapatnam-530 018. Rep. by its Director Mr. Ashish Daruka. ..... PETITIONER AND 1 The Joint Commissioner (CT) Legal, Office of Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad. 2 The Commercial Tax Office, Dwarakanagar Circle, Visakhapatnam. 3 The Dy. Commercial Tax Office, VMU-II, Visakhapatnam. 4 The Branch Manager, State Bank of Hyderabad, Siripiram Branch, Visakhapatnam. 5 The Branch Manager, Axis Bank, Dwarakanagar Branch, Visakhapatnam. 6 The Principal Secretary, Revenue Department, Secretariat, Hyderabad. .....RESPONDENT(S) 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 or direction a) praying the Hon'ble Court to declare that the Rule 59 of VAT Rules, 2005 is ultra virus to Section 2 (4) of the A.P. VAT Act. b) praying the Hon'ble Court to declare that the levy of penalty of Rs.1,25,447/- and penal interest of Rs.1,89,083/- u/s 53 of the AP VAT Act, by the 3rd respondent by proceedings dated 23-9-2008 is contrary to Section 53 of AP VAT Act and set aside the proceedings dated 23-09- 2008 passed in Form VAT 305 as null and void; c) praying the Hon'ble Court to declare that the proceedings passed by the 3rd respondent dated 20.09.2008 passing a common order for three assessment years 2005-06 to 2007-08 is contrary to section 2(36) of the AP Vat Act. d) praying the Hon'ble Court to declare that the action of the 1st respondent in rejecting the stay application by proceedings, dated 31-01-2009 in CCT Ref.No.LV(3)/56/2009 without considering all the contentions of the petitioner as arbitrary, constrary to law and in violation of principles of natural justice and rule of law and consequently grant stay of collection of disputed penalty and interest of Rs.3,14,530/- for the years 2005-06 to 2007-08, pending disposal of the appeal before the Hon'ble Sale Tax Appellate Tribunal, Additional Bench, Visakhapatnam. Counsel for the Petitioner: MR.SHAIK JEELANI BASHA Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following : W.P.Nos.3706 and 3800 of 2009 COMMON ORDER: (Per Sri V.Eswaraiah, J.) Heard both the counsel. The petitioner is one and the same in both the writ petitions which are filed questioning the validity of Rule 59 of A.P.VAT Rules as being ultra vires Section 2(4) of the A.P.VAT Act. Though the petitioner questions the validity of Rule 59 of A.P.VAT Rules as being ultra vires to Section 2(4) of the A.P.VAT Act, but it gave up the said attack, seeking liberty to reserve its right to challenge the same after disposal of its appeals, pending before the Sales Tax Appellate Tribunal, Visakhapatnam. The case of the petitioner is that as against the notice of assessment dated 9.7.2008 demanding payment of Rs.9,53,987/- towards the tax arrears for the years 2005-06 to 2008-09, the petitioner filed appeals before the Appellate Deputy Commissioner (Commercial Taxes), Visakhapatnam and the said appeals were dismissed by order dated 2.12.2008 in appeal Nos.VSP/VAT/032/08-09 and VSP/VAT/039/08-09. Aggrieved by the said orders of the appellate authority dismissing the appeals, the petitioner preferred appeals before the Sales Tax Appellate Tribunal and simultaneously filed stay application before the 1st respondent - Joint Commissioner (CT) Legal, seeking stay of collection of tax of Rs.4,97,707/- for the years 2005-06 to 2007-08 under the A.P.VAT Act pending the appeal before the Sales Tax Appellate Tribunal, Visakhapatnam. The said application was rejected by order 31.1.2009 in CCT’s Ref.No.LV(3)/57/2009. Questioning the said order dated 31.1.2009 of the Joint Commissioner (CT) Legal, Hyderabad, the petitioner filed W.P.No.3706 of 2009. The Deputy Commercial Tax Officer, Visakhapatnam – 3rd respondent herein levied penalty and penal interest of Rs.3,14,530/- for the years 2005-06 to 2007-08. Petitioner questions the rejection of its stay application pending its second appeal against this order in W.P.No.3800 of 2009. Admittedly, the second appeal is pending before the Sales Tax Appellate Tribunal, Visakhapatnam. Learned counsel for the petitioner submits that he is not pressing the ground raised with regard to the vires of the Rule. However, he seeks a direction to the Sales Tax Appellate Tribunal, Visakhapatnam to consider and dispose of the appeals and pending disposal of the second appeals, he seeks grant of stay of the collection of the disputed tax, penalty and interest. Having regard to the facts and circumstances of the case, without going into the merits of the case, the writ petitions are disposed of granting stay pending the disposal of the petitioner’s appeals, subject to payment of 50% of the disputed tax and 25% of the penalty and penal interest within four weeks from today. The tax paid, if any, may be given due credit. The writ petitions are disposed of accordingly. No order as to costs. ________________ V.ESWARAIAH, J. ____________________ SANJAY KUMAR, J. 26.3.2009 kpr THE HON’BLE SRI JUSTICE V.ESWARAIAH AND THE HON’BLE SRI JUSTICE SANJAY KUMAR W.P.Nos.3706 and 3800 of 2009 ORDER: (Operative portion) The writ petitions are disposed of granting stay subject to payment of 50% of the disputed tax and 25% of the penalty and interest within four weeks from today. The tax paid, if any, may be given due credit to. The writ petitions are disposed of accordingly. No order as to costs. ________________ V.ESWARAIAH, J. ____________________ SANJAY KUMAR, J. Note: Issue wire at party’s cost Send the files to C.M.Section B.O. kpr