IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY SECOND DAY OF MARCH TWO THOUSAND AND TEN PRESENT THE HON'BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 3744 of 2009 Between: M/s. Hindustan Petroleum Corporation Limited, No.130/1, Sarojini Devi Road, Secunderabad, Rep.by its Chief Regional Manager, Sri S.K. Suri ..... PETITIONER AND The Assistant Commissioner (CT)(LTU) Secunderabad Division, Hyderabad and others .....RESPONDENTS The Court made the following : ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of mandamus to set aside the Garnishee Notice dated 18.02.2009 issued by the first respondent to the fourth respondent Bank and fifth respondent customer in seeking to recover the disputed taxes and interest amounting to Rs.34,93,48,325/- for the assessment years 2001-2002 and 2004-2005 under APGST and CST Act, for the year 2004-05 towards interest under CST Act as illegal, arbitrary and contrary to the provisions of the APGST and CST Acts and to consequently grant stay of collection of the disputed tax and interest pending appeal before the Appellate Tribunal and the respondent authorities, the petitioner filed this writ petition. The petitioner is a Government of India Company dealing in petroleum and petroleum products and is a registered dealer on the rolls of the first respondent. The first respondent by order dated 15.04.2008 had completed the assessment under APGST Act for the assessment year 2001-2002. Aggrieved thereby, the petitioner preferred an appeal before the Second Respondent along with stay petition. The second respondent through Check Memo dated 15.7.2008 required the petitioner to deposit 12.5% of the disputed tax, which was however, not deposited by the petitioner and an explanation was submitted therefor. For the same assessment year, the petitioner was assessed under CST Act by the first respondent through order dated 30.3.2005, which was assailed by the petitioner before the second respondent in appeal. The said appeal was partly dismissed and partly remanded by the second respondent by order dated 5.12.2005. The said order was assailed by the petitioner before the Sales Tax Appellate Tribunal. In the meantime, the first respondent pursuant to the order of remand passed by the second respondent, passed consequential proceedings dated 8.2.2008 raising a demand of Rs.5,53,39,234/-. Seeking stay of collection of this amount, the petitioner filed stay petition before the third respondent. Likewise, for the assessment year 2004-2005 under APGST Act was completed by the first respondent by order dated 31.3.2008 and the petitioner preferred an appeal in Appeal No. S/24/08/09 before the second respondent against the said order along with stay petition, which was however rejected by the second respondent by order dated 13.6.2008. Aggrieved by the said rejection of stay, the petitioner preferred a revision before the third respondent, which is pending. Likewise, the first respondent for the assessment year 2004-2005 under the CST Act completed the assessment by order dated 31.3.2008, which was further revised by the first respondent by proceeding dated 13.6.2008. Aggrieved thereby, the petitioner preferred an appeal before the second respondent along with stay petition, who issued Check Memo dated 15.7.2008 requiring the petitioner to pay tax at 12.5% of the disputed tax. The matters were pending thus, the first respondent by his proceedings dated 23.6.2008 levied interest to the tune of Rs.10,40,75,375/-, which was also appealed against by the petitioner before the second respondent along with stay petition. But the said appeal was dismissed by order dated 31.12.2008. Against the said order, the petitioner preferred an appeal before the Sale Tax Appellate Tribunal and also moved stay petition before the third respondent. In the meanwhile, the first respondent has issued Garnishee Notice in Form VAT 206 dated 18.2.2009 to the fourth and fifth respondents seeking to recover the total disputed tax of Rs.34,93,48,325/- for the years 2001-2002 and 2004- 2005 under APGST and CST Act and interest for the year 2004-2005 for belated payment. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes and perused the material available on record. It is the contention of the learned counsel for the petitioner that since appeals and revision are pending before the Appellate Tribunal and the respondent authorities, at this stage, issuance of the garnishee notice is contrary to law and if stay is not granted and in case the recovery of the disputed tax and interest in question is effected during pendency of the Appeals and revision, the very purpose of filing the said Appeals and revision, which is the statutory remedy that is available to the aggrieved party, would be defeated and, therefore, the impugned garnishee notice is liable to be set aside. On the other hand the learned Special Standing Counsel for the Commercial Taxes opposed the petition on the ground that since the Appeals and revision are pending before the Appellate Tribunal and appellate authorities, it is for them to grant stay. In the facts and circumstances of the case and in view of pendency of the Appeals and revision, without expressing any opinion on their merits, we feel, it is a fit case wherein the garnishee notice in question can be suspended, but subject to certain conditions. It is contended by the learned counsel for the petitioner that if the garnishee notice is not suspended, it is very much difficult to operate the account to meet the regular transactions and also to comply with the order of this Court. In view of the above submission, we deem it appropriate to suspend the garnishee notice dated 18.2.2009 so as to enable the petitioner to continue the operation of the account and comply with the conditions that would be imposed while granting stay by this court, till the disposal of the Appeals and revision filed by the petitioner. Accordingly, there shall be suspension of the garnishee notice Dated 18.2.2009 till the disposal of the appeals and revision pending before the Appellate Tribunal and the respondent authorities, subject to the condition of the petitioner depositing 50% of the disputed tax amount and 25% of the interest amount, as per the impugned orders, within a period of eight weeks from today. It is needless to observe that in case of non- compliance of the above order, the garnishee notice shall become operative. Subject to the above direction, the writ petition is disposed of. No order as to cost. ____________________ Justice T.Meena Kumari __________________________ Justice Nooty Ramamohana Rao March 22, 2010 MAS