IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY NINETH DAY OF OCTOBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE G. CHANDRAIAH WRIT PETITION NO : 23445 of 2008 Between: M/s Taj Ice Cream, 5-4-410, Nampally, Hyderabad, Rep by its Partner Sri.Naqee Hussain, ..... PETITIONER AND 1 Additional Commissioner (CT) (Legal), CCT's Office, 2nd Floor, Nampally, Hyderabad. 2 Appellate Deputy Commissioner(CT), Secunderabad Division, CCT's Complex, 5th Floor, Nampally, Hyderabad, 3 The Commercial Tax Officer, M.J.Market Circle, 4th Floor, Old Kakatiya Hotel, Nampally Station Road, 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 a writ or direction more particularly one in the nature of Writ of Mandamus declaring the impugned order dated 29-9-2008 passed by the 2nd respondent in Appeal No.A/50/08-09/V dated 29-9-2008 as illegal, arbitrary unjust and contrary to the facts and law and to pass such other suitable orders as this Hon’ble Division Bench of this Court may deems ﬁt and proper in the circumstances of the case. Counsel for the Petitioner: MR.S.R.R.VISWANATH Counsel for the Respondents: GP FOR COMMERCIAL T AX The Division Bench of this Court made the following order: [Order follows 2nd page] THE HON'BLE MRS JUSTICE T.MEENA KUMARI A N D THE HON'BLE MR JUSTICE G. CHANDRAIAH WRIT PETITION NO : 23445 of 2008 ORAL ORDER : [ Per the Hon’ble Smt. Justice T. Meena Kumari ] Seeking a writ of mandamus granting stay of collection of the disputed tax of Rs.18,74,210=00 for the assessment made by the third respondent for the assessment year 2005-07 under Value Added Tax and proposed to levy the tax in the notice in Form VAT-305A which was conﬁrmed with necessary modiﬁcation in respect of sales turnover in loose slips for the period from 01-4-2007 to 31-5-2007 and to declare the impugned proceedings dated 29-9-2008 passed by the second respondent in Appeal No.A/50/08-09/V under Andhra Pradesh Value Added Tax Act 2005 rejecting to grant stay of collection of the above disputed tax, as illegal, arbitrary and contrary to the facts and law and to pass such other suitable orders as this Court may deems ﬁt and proper in the circumstances of the case. 2. The petitioner-ﬁrm manufactures and sells Ice cream. It is registered as a dealer under the AP Value Added Tax Act 2005 and assigned Tax Payer Identiﬁcation Number 2833013381. The petitioner ﬁrm is on the rolls of the third respondent and it ﬁled monthly VAT-200 returns and paid the taxes due. It is stated that the petitioner ﬁrm was inspected by the Oﬃcials of the Regional Vigilance and Enforcement Wing on 21-9-2007 and carried away certain books and records and thereafter proposed additional turn over of Rs.1,44,41,529-00; Rs.3,95,475-00 and Rs.5,48,768 allegedly on the basis of Note Books 1, 2 and 3 and loose slips respectively. Subsequently the oﬃcials of the Regional Vigilance and Enforcement have transferred all the materials to the third respondent. Thereupon, the third respondent issued notice toeing the line of the oﬃcials of the Regional Vigilance and Enforcement. A show cause notice was issued in Form-305A, proposing to levy additional tax of Rs.18,74,210=00. On 04-6-2008 the petitioner ﬁrm ﬁled its reply by explaining the peculiar nature of Ice cream business, ﬂuctuations in power supply and interruptions in power supply will damage the ice cream and discounts to the extent of 45 to 50 per cent may have to be allowed. Further the petitioner ﬁrm explained that the distributors may place orders for certain kinds of ﬂavours but depending upon the availability the ﬂavours ordered for or diﬀerent ﬂavours would be supplied. It is also explained that the quantities supplied may vary from the quantities. As and when the orders are received over phone or other wise they are noted down and subsequently supplies are made under delivery challans. Based on the delivery challans ﬁnal invoices are prepared. It also explained that the turn over of Rs.3,95,478-00 arrived at on the basis of loose slips for the period from 08-2-2007 to 08-3-2007 the tax was already paid to the Government and for the said turn over the invoices had already been raised; with regard to the turn over proposed allegedly on the basis of loose slips for the period from 01-4-2007 to 31-5-2007 it was stated that there were arithmetical errors in calculation and the turn over on the basis of such slips was only Rs.1,53,342- 00 and it was already accounted for and reported to the department in VAT 200 returns and the taxes due were already paid; with regard to the turn over amounting to Rs.1,44,41,529-00 allegedly on the basis of three note books it was stated that they knew nothing about the “note books”. Further it was clearly stated that they were neither taken from their business premises nor did they relate to their business. 3. It is further stated that the third respondent merely accepted one objection raised by the petitioner ﬁrm. It is also an admitted mistake in calculating turn over and reduced the turn over of Rs.5,48,768-00 to Rs.1,56,672-00 with regard to three note books which do not relate to the petitioner’s ﬁrm business at all. The third respondent thus conﬁrmed additional tax of Rs.18,74,210-00 in the proceedings in Form VAT-305 dated 18-7-2008. Aggrieved by the assessment made by the third respondent, the petitioner ﬁrm ﬁled an appeal along with stay application before the second respondent in VAT Form Nos. APP-400 and APP-406 on 25-8-2008 and the petitioner ﬁrm explained to the second respondent various grounds on which the assessment made by the third respondent was bad. Further it is stated that the petitioner ﬁrm explained that any forcible collection of disputed tax would seriously impair the functioning of the petitioner ﬁrm and drive it out of business. Considering all the facts, the second respondent was implore to grant stay of collection of the disputed tax but the second respondent rejected the stay application by a cryptic order through proceedings in Appeal No. A/50/08-09/V dated 29-9-2008. 4. Aggrieved by the impugned proceedings of the second respondent, the petitioner ﬁrm ﬁled a revision against the stay rejection order in Form VAT-406 before the ﬁrst respondent under section 31 (3) (b) of AP Value Added Tax Act 2005. Now the revision is pending before the ﬁrst respondent and the respondent authorities can take coercive action for collection of the disputed tax. The petitioner-ﬁrm’s apprehension is that the third respondent will take coercive steps for collection of the tax demand, which is disputed in appeal before the second respondent. There is also imminent threat of attachment, which would adversely aﬀect the operations of the firm. 5. It is also stated that the third respondent has served a notice in RC.No. TIN/283202957775 dated 17-10-2008 demanding the disputed tax of Rs.18,74,210-00 within three days from 20-10-2008, failing which coercive action will be contemplated for the collection of disputed demand. 6. It is submitted by the learned counsel for the petitioner that though several contentions were raised before the respondent authorities but the second respondent has refused to grant stay vide the order impugned herein. It is submitted that pursuant to the rejection of stay by the second respondent, the third respondent has served a notice in RC.No. TIN/283202957775 dated 17-10-2008 demanding the disputed tax of Rs.18,74,210-00 within three days from 20-10- 2008, failing which coercive action will be contemplated for the collection of disputed demand and the third respondent is contemplating to take coercive steps for recovery of the disputed tax. 4. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes. 5. 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 half of the disputed tax amount, as per the impugned order, within a period of eight weeks from today and in the meanwhile the respondents are directed not to take coercive step for recovery of the tax, pending ﬁnalisation of the appeal by the Appellate Authority. It is made clear that the amount paid, if any, shall be given credit to the above stipulated sum. With these directions, the writ petition is disposed of at the stage of admission. No order as to costs. ___________________________ JUSTICE T. MEENA KUMARI. _________________________ JUSTICE G. CHANDRAIAH. 29-X-2008. I s L NB: Furnish CC of this order tomorrow. // BY ORDER // I s L ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{LS}