THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION No.11705 of 2003 Dated:16.11.2011 Between: M/s.Kalyani Trading Company. …Petitioner And The Asst.Commissioner of Commercial Taxes (Int.), Main Bazar, Guntur, And another. …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION No.11705 of 2003 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner firm is a registered dealer on the rolls of the second respondent. Statedly, they effect local sales as well as export sales of dry chillies. Insofar as the latter category is concerned, they are claiming exemption under Section 5(3) of the Central Sales Tax Act, 1956. They state that they filed the returns regularly before the second respondent disclosing in the return the export of chillies effected to other countries. The business premises of the petitioner was inspected by the first respondent on 02.12.2002. It is alleged that the records were taken away. Under coercion and threat the petitioner paid Rs.1,31,968/- towards tax for the assessment year 2002-2003 and an amount of Rs.20,000/- towards compounding fees. It is further alleged that thereafter no proceedings were taken under the Andhra Pradesh General Sales Tax Act, 1957 (APGST Act). In this writ petition they seek appropriate declaration and direction. This matter was admitted by this Court on 20.06.2003. The second respondent filed counter affidavit. The inspection of the business premises is not denied. It is, however, stated that the petitioner was issued a notice on 02.12.2002 fixing the turnover being the value of the chillies sold during the period 01.04.2002 to 30.11.2002 with tax liability at the rate of 4%. It is also alleged that suspecting suppression of the turnover/tax, a show cause notice was issued calling upon to show cause as to why the petitioner should not be prosecuted. The petitioner was given time up to 09.12.2002. They filed letter on 02.12.2002 accepting the offence pointed out by the inspecting authority and voluntarily agreed to pay the tax and compounding fees. This Court heard the Counsel for the petitioner and the Special Counsel for Commercial Taxes. A Full Bench of this Court in Abmica Lamp House v. Commercial Tax Officer (Int)-I Enforcement[1] considered the extent and scope of the power under Section 28 of APGST Act. The method adopted by the Officials of the Commercial Tax Department, especially, Intelligence and Vigilance staff, in inspecting the premises and collecting the evaded tax as well as compounding fee on the threat of launching prosecution has been adversely commented upon by the Full Bench. While laying down guidelines in the matter of inspections, search, seizure and confiscation under Section 28 of the APGST Act, Hon’ble Sri Justice Ananda Reddy in paragraph 30 of the judgment observed as under. In the result, the writ petitions are allowed setting aside the impugned orders wherever no assessments are made for the disputed turnover, and consequently the amounts collected under the impugned order are ordered to be refunded or adjusted if there are any existing outstanding demands. In cases where assessments are made, the collected tax shall be subject to the outcome of the statutory appeals, if any. Similarly, if the compounding fee levied and collected is equal to the tax without any assessments, in such cases, the compounding orders are also set aside and the fee collected is to be refunded to the dealers or adjusted if there are any existing outstanding demands. No costs. When the matter was initially called before us we directed the Special Counsel to get instructions in the matter as to the latest position. Today he fairly submits that subsequent to the show cause notice dated 02.12.2002, no assessment order was passed. This is certainly not in accordance with the decision of the Full Bench. The alleged evasion is with reference to assessment year 2002-2003. Therefore, in view of Section 14(1) of the APGST Act, assessment would be barred by limitation. The amount paid by the petitioner, which is not disputed, therefore, shall have to be adjusted against any existing or future liability under the APGST Act. The writ petition is disposed of accordingly. There shall be no order as to costs. _______________ (V.V.S.RAO, J) _____________________ (SANJAY KUMAR, J) 16.11.2011 vs [1] (2005) 142 STC 551 = (2005) 40 APSTJ 56