IN THE HIGH COURT OF JUDICATURE ANDHRA PRADESH AT HYDERABAD. TUESDAY. THE TWENTIETH DAY OF APRIL TWO THOUSAND AND TEN P R E S E N T: THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE NOOTY RAMAMOHAN RAO WRIT PETITION No. 8 8 1 2 OF 2010 Between : M/s. Prathul Automobiles Pvt.Ltd., Rajbhavan Road, Somajiguda, Hyderabad. Rep.by its Director, Sri BS Neelakanta … Petitioner V/ s. The Assistant Commissioner (CT) (LTU) Punjagutta Division Hyderabad & 2-Ors. … Respondents Counsel for the Petitioner : Sri B. Krishna Reddy Counsel for the Respondents: Sri A.V. Krishna Koundinya GOVT.PLEADER FOR COMMERCIAL TAX Order of the Division Bench follows on 2nd page THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE NOOTY RAMA MOHAN RAO WRIT PETITION No. 8 8 1 2 OF 2010 O R D E R : (Per the Hon’ble Smt.Justice T.Meenakumari) Seeking mandamus to declare the action of the first respondent in insisting for payment of the disputed penalty through the impugned notice dated 07-4-2010 for the month of July 2009 and contemplating to take coercive steps for recovery of the disputed penalty even during pendency of appeal before the third respondent as illegal, arbitrary, high-handedness, without authority of law and jurisdiction and set aside the same and to consequently to restrain the first respondent from taking any coercive steps for recovery of the disputed penalty of Rs.6,01,275-00 for the month of July 2009 under the AP Value Added Tax, 2005 pending disposal of appeal before the third respondent and to pass such other suitable orders as this court may deems fit and proper in the circumstances of the case, the petitioner filed this writ petition. 2. The facts of the case are that the petitioner is a private Limited Company engaged in the business of trading of two-wheeler and is an assessee on the rolls of the first respondent. The main allegation against the petitioner is that the petitioner had paid monthly tax belated for the month of July 2009 as a regular practice though reported through the monthly return. Penalty of Rs.6,01,275-00 has been imposed by proceedings dated 07-10-2009 in Form No.203. The main reason for the belated payment was clearly explained by its reply to the show cause notice issued by the first respondent on 05-9-2009 in Form No.203-A. 3. It is stated that there is bright chances of success in the appeal filed before the second respondent against levy of penalty for the month of July 2009. Since the imposition of penalty is without authority of law and jurisdiction and also it is in contravention of the provisions of the Act, the levy of penalty does not arise and cannot be sustained in law. 4. It is stated that the first respondent is insisting for payment of the disputed penalty through the impugned notice dated 07-4-2010 for the month of July, 2009 and is contemplating to take coercive steps for recovery of the disputed penalty even during pendency of appeal before the third respondent. 5. It is submitted by the learned counsel for the petitioner that though several contentions were raised before the first respondent, but the first respondent without considering the fact that the cash flow of the petitioner was disturbed due to market condition and not other wise and there was no wilful disobedience or failure to pay the tax along with the return but it was only due to the reason explained in the reply to the show cause notice. He further stated that the first respondent without considering the reply has passed the penalty order imposing 10% penalty of the tax by invoking section 51 (1) of the AP Value Added Tax Act. Questioning the said order, the petitioner filed an appeal along with stay application with a delay of 15 days. Since the counsel who had been instructed to file the appeal did not file delay condonation petition, the second respondent rejected the appeal for non-filing of delay condonation petition. Now the petitioner cannot be put to irreparable loss for the mistake of its counsel. Challenging the said order, the petitioner filed an appeal before the third respondent and the same is pending. If the first respondent is not restrained from proceeding further for recovery of the disputed penalty, the petitioner would be put to irreparable loss and hardship and its business would come to a grinding halt. Hence the writ petition. 6. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes. 7. Having heard the learned counsel on either side, in view of 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 25% of the disputed penalty within a period of six weeks from the date of receipt of a copy of the order, and the first respondent is directed not to take coercive step for collection/recovery of the disputed penalty, pending finalisation of the appeal by the third respondent – Sales Tax Appellate Tribunal, Hyderabad Bench, Hyderabad. If any amount has already been paid by the petitioner, the same shall be given credit. 8. With the above direction, the writ petition is disposed off at the stage of admission. However, in the circumstances there shall be no order as to costs. _____________________ JUSTICE T. MEENA KUMARI ____________________________ JUSTICE NOOTY RAMA MOHAN RAO 20-04-2010 I s L THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE NOOTY RAMA MOHAN RAO WRIT PETITION No. 8 8 1 2 OF 2010 ORDER of the Division Bench delivered by the Hon’ble Smt.Justice T.Meenakumari Circulation Entry No. 8 9 Computer No.43 Court Master: I s L Date: 20-04-2010