IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FIFTH DAY OF AUGUST TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 16903 of 2008 Between: M/s.Variety Motors 17-375/A/5 DMRL X Road, Santhoshnagar,Hyderabad 500059 Rep.by its Sr.Assistant General Manager-Finance Mr.R.Shaym Prasad Rao ..... PETITIONER AND 1 The Depty Commercial Tax Officer-II Charminar Circle,Hyderabad 2 The Appellate Deputy Commissioner(CT) Punjagutta Division Hyderabad 3 The Commercial Tax Officer Malkapet Circle,Hyderabad 4 The State Bank of India Prashanthnagar Branch(Uppal) Hyderabad Rep.by its Branch Manager .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to issue a Writ of Certiorari or any other appropriate writ or order or direction quashing the order of the 2 Respondent in CV/28,29 and 30/2008-09 dt.25-7-2008 as illegal arbitrary and contrary to law and set aside the notice issued by the 3rd respondent dt.18-7-2008 to the 4th respondent for recovery of disputed penalty of Rs 3,79,562/ Rs 4,08,205/ and Rs 2,92,546/ for the periods 005-06 2006-07 and 2007-08 (upto November 2007) under the A.P Value Added Tax Act 2005 as illegal arbitrary and unjustiﬁed and set aside the same and consequently restrain the 3rd respondent from taking any coercive steps for recovery of disputed penalty of Rs 3,79,562/- Rs 4,08,205/- and Rs 2,92,546/- for the years 2005-06 2006- 07 and 2007-08 (upto November 2007) pending disposal of the appeals before the 2nd respondent and pass Counsel for the Petitioner: MR.S.DWARAKANATH Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following : ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of certiorari declaring order dated 25.07.2007 passed by the second respondent and to set aside the notice issued by the third respondent dated 18.7.2007 to the fourth respondent for recovery of the disputed penalty of Rs.3,79,562/- and Rs.4,08,205/- and Rs.2,92,546/- for the periods of 2005-06, 2006-2007 and 2007-2008 and to consequently restrain the third respondent from taking coercive steps for the recover of above said penalty amount, pending appeal before the second respondent the petitioner ﬁled this writ petition. The petitioner company is a registered dealer on the rolls of the ﬁrst respondent and is engaged in the business of trading in two wheelers manufactured by M/s. Hero Honda Motors Limited. The ﬁrst respondent has inspected the premises of the petitioner and levied tax for the periods of 2005- 06, 2006-2007 and 2007-2008 on account of receipts of servicing charges, incentives from banks, etc. The petitioner herein preferred appeals against the said orders before the second respondent paying 12.5% of the disputed tax and for the stay of the balance amount, ﬁled stay petitions, which were however rejected by the second respondent. Aggrieved thereby, the petitioner herein preferred revision petitions before the third respondent for stay of collection of balance disputed tax. Pending hearing on the stay applications, since the ﬁrst respondent has issued notice, dated 18.7.2008 seeking payment of the disputed tax and since the banking operation of the petitioner are paralysed, the petitioner ﬁled WP No.15965 of 2008 before this court which was disposed of with certain directions. While so, the petitioner was also levied further penalty of Rs. 3,79,562/- and Rs.4,08,205/- and Rs.2,92,546/- for the periods of 2005-06, 2006- 2007 and 2007-2008 and the petitioner preferred appeals to the second respondent and also ﬁled stay applications, which were, however, rejected by the 2nd respondent by his order dated 25.7.2008. Thus in view of the order of the 2nd respondent, the third respondent did not lift the attachment and the garnishee notice is kept in force. Hence, the present petition is filed. 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 Appeals are pending before the Appellate Authority and keeping the garnishee notice alive, even after payment of 50% of the disputed tax, is contrary to law and if stay is not granted, and in case the recovery of the disputed penalty in question is eﬀected during pendency of the Appeals before the Appellate Authority, the very purpose of filing the said Appeals, which is 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 are pending before the Appellate Authority, it is for that Authority to grant stay. In the facts and circumstances of the case and in view of pendency of the Appeals, without expressing any opinion on merits of the case, we feel, it is a ﬁt case wherein the garnishee notice in question can be suspended, but subject to imposition of certain conditions. At this stage, it is the contention of the learned counsel for the petitioner that if the garnishee notice is not suspended, it is much diﬃcult to operate the account to meet the regular transactions. In view of the above submission, we deem it appropriate to suspend the notice dated 18.7.2008 issued in Form VAT 206 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 filed by the petitioner. Accordingly, there shall be suspension of the notice Dated 18.7.2008 issued in Form VAT 206 till the disposal of the Appeals pending before the Appellate Authority, subject to the condition of the petitioner depositing 25% of the disputed amount, as per the impugned order, within a period of eight weeks from today. On such deposit, the Appeals shall be disposed of within three months thereafter. It is needless to observe that in case of non- compliance of the above order, the said 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 Ramesh Ranganathan August 5, 2008 Operative portion by wire //BO// MAS ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{BMR}