THE HON'BLE SRI JUSTICE B.PRAKASH RAO And THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO.19619 OF 2009 ORDER: (Per the Hon’ble Sri Justice Ramesh Ranganathan) Heard Sri R.Raghunandan, learned counsel for the petitioner and Sri P.Balaji Varma, learned Special Standing Counsel for Commercial Tax. At their request, the Writ Petition is being taken up for disposal at the stage of admission. Questioning the Distraint Order dated 28.08.2009, issued by the first respondent under the A.P. Revenue Recovery Act, 1864 {“the Act” for brevity}, the present Writ Petition is filed. The facts, in brief, are that the petitioner is carrying on business in construction activity. They opted to pay tax on composite method and filed their returns for the year 2006-07. The second respondent, in pursuance of the returns filed by the petitioner, assessed them to tax for the year 2006-07 vide proceedings dated 19.12.2007 on the total receipts received on the sale of flats, at the rate of 1% under the composition availed by the petitioner under Section 4 (7) (d) of the Act. The petitioner claims to have paid the tax so assessed by the second respondent either by payment of the amount or through adjustment by TDS. Aggrieved by the order of the second respondent in part, the petitioner preferred an appeal to the Appellate Deputy Commissioner, Secunderabad Division. While matters stood thus, the second respondent initiated penalty proceedings and passed an order on 14.03.2009 levying penalty of Rs.2,59,577/- equal to the tax declared i.e., the tax under Section 4 (7) (e) of the Act. Aggrieved by the said order of penalty, the petitioner preferred an appeal. The appeal was disposed of by the Appellate Authority, by his order dated 30.06.2009, rejecting the petitioner’s contention. Aggrieved thereby, the petitioner preferred a further appeal to the Sales Tax Appellate Tribunal, Hyderabad {“the Tribunal” for brevity}, which is still pending. On the ground that their application for stay was rejected, and distraint proceedings were initiated under the Act, the present Writ Petition is filed. Sri R.Raghunandan, learned counsel for the petitioner, would vehemently contend that Section 53 (3) of the Act under which action was initiated for levy of penalty, applied only to cases of fraud and, willful neglect and since the petitioner had opted to pay tax under composite method, they could not be said to have either committed fraud or to have acted in willful neglect. Since the substantive appeal filed by the petitioners is pending before the Tribunal, it would be wholly inappropriate to examine the contentions, urged by the learned counsel for the petitioner, on merits. Ends of justice would be met if the interim order of stay granted earlier by this Court is continued till the appeal is disposed of by the Tribunal on condition that the petitioner shall deposit 25% of the penalty levied, after deducting any amount paid earlier towards such penalty, within a period of six {6} weeks from today. The Writ Petition is, accordingly, disposed of. However, in the circumstances, without costs. _________________ (B.PRAKASH RAO, J) _______________________ (RAMESH RANGANATHAN, J) 14th June 2010 RRB