THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 26529 of 2009 Dated: 8-12-2009 Between: M/s G.S.L Coal Sales Pvt. Ltd., Secunderabad. …Petitioner and Deputy Commercial Tax Officer (CT), Begumpet Circle, Hyderabad and others …Respondents ORAL ORDER (Per RR,J) The order impugned in this writ petition is the order of the Additional Commissioner, (CT) Legal, Hyderabad dated 23.10.2009 rejecting the petitioner’s application for stay of payment of the disputed penalty for the tax period 2005-06 and 2006-07 (AP VAT Act). The petitioner is engaged in the business of providing transportation services for various types of products and claims to possess a fleet of Transit Mixers used for transporting ready mix concrete to various customers. They entered into an agreement with M/s Grasim Industries Ltd., on 1.10.2002, whereunder they agreed to supply a dedicated fleet of 5 vehicles to transport ready mix concrete from the Principal Employer’s plant to various customers in the city. The petitioner received a show-cause notice from the Commercial Tax Officer, Begumpet on 21.10.2009 proposing to levy 100% penalty under Section 53(3) of the AP VAT Act, 2005 (for short ‘the Act’) for Rs.15,28,626-00, on the ground that the petitioner had transferred the right to use transit mixers to M/s Grasim Industries Limited and the amounts received thereon were liable to tax under Section 4(8) of the Act. The petitioner submitted written objections on 15.1.2009 contending that the amounts received from their customers were only transport charges and not lease rentals. The Commercial Tax officer, by order dated 31.3.2009, confirmed the levy of penalty under Section 53(3) of the Act for the year 2005-06 demanding payment of Rs.15,28,626-00. Aggrieved thereby, the petitioner preferred an appeal to the Appellate Deputy Commissioner who rejected stay, for the period 2005-06 and 2006-07, by order dated 25.8.2009. Aggrieved thereby, the petitioner preferred a revision application before the Joint Commissioner who dismissed the said revision by the order impugned in this writ petition. Sri Lakshmi Kumaran and Sridharan, learned counsel for the petitioner, would contend that under the agreement entered into with M/s Grasim Industries the vehicles were driven by the staff of the petitioner’s company and it was the petitioner’s responsibility to maintain the said vehicles. Learned counsel would contend the mere fact that 5 vehicles were set apart for transporting ready mix concrete by M/s Grasim Industries, and the petitioner was required to transport ready mix concrete to the customers as per the instructions of the contractee did not amount to a transfer of the right to use goods under Section 4(8) of the Act and, since the petitioner is not even liable to pay tax under Section 4(8) of the Act, no penalty could have been levied much less penalty of 100% under Section 53(3) of the Act. Learned counsel would further submit that the appeal preferred by them against the order of assessment is still pending before the Appellate Deputy Commissioner. Learned counsel would further contend that from out of the disputed penalty of Rs.15,28,626-00, the petitioner has already paid Rs.13,24,186-00 and that a balance of Rs.2,04,440-00 is alone due to be paid. While the petitioner has an arguable case on merits we do not propose to examine the contentions urged before us as the substantive appeal is pending before the Appellate Deputy Commissioner. Ends of justice would be met if the respondents are directed not to collect the balance disputed penalty of Rs.2,04,440-00 pending disposal of the appeal before the Appellate Deputy Commissioner. The writ petition is disposed of after hearing both Sri Lakshmi Kumaran and Sridharan, learned counsel for the petitioner and Sri A.V.Krishna Koundinya, learned Special Standing counsel for Commercial taxes. No costs. GODA RAGHURAM, J RAMESH RANGANATHAN, J 8th December, 2009 GRR/ASP