THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.2977 of 2010 March 09, 2011 Between: M/s.Nizam Sugars Limited, represented by its General Manager (Finance), Mr.M.J.R.Sarma … Petitioner And The Commercial Tax Officer, Basheer Bagh Circle, Hyderabad And others … Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.2977 of 2010 COMMON ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The Nizam Sugars Limited – a fully owned Government of Andhra Pradesh Undertaking – is a dealer under the Andhra Pradesh General Sales Tax Act, 1957 (the Act). The petitioner which was engaged in the manufacture and sale of sugar, molasses and rectified spirit were assessed to tax, for the assessment year 2002-2003, on the turnover of ` 2.82 crores. The turnover represented sale of plant and machinery of one of its units, namely, Chagallu Distillery to M/s.Jaypore Sugar Company Limited during the relevant assessment year. The petitioner’s attempt to get the turnover exempted from payment of tax proved futile. Against the levy of penalty of ` 1.69 crores, the petitioner preferred an appeal before the second respondent. The application for stay of collection of penalty was dismissed on 18.12.2009 aggrieved by which the petitioner availed the remedy of revision before the third respondent. By the impugned order dated 23.1.2010, the same was rejected. The petitioner contends that levy of penalty is illegal when the Deputy Commissioner revises the assessment under Section 19(2B) of the Act, and not under Section 14(4) of the Act; when there was no suppression of the turnover by sale of plant and machinery, exercise of power to levy penalty is unwarranted and without jurisdiction; bringing the sale value of plant and machinery as part of the turnover does not attract levy of tax; and, therefore, the question of suppression does not arise. These contentions did not find favour with the third respondent. In this case, the Counsel for the petitioner reiterates the position supra. It cannot be denied that, even in matters where the law requires deposit of disputed tax as a pre-condition, pre-deposit of the disputed penalty is not insisted upon. Drawing an analogy from the same, we also consider it proper to observe that refusal to exercise power, under Section 19(2B) of the Act, is unjustified. Accordingly, we allow the writ petition and set aside the impugned order. While ordering stay of collection of the penalty, we direct the second respondent to dispose of the appeal within a period of two months from the date of receipt of a copy of this order. There shall be no order as to costs. _______________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) March 09, 2011 YS