IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY NINTH DAY OF APRIL TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI ANIL R.DAVE, THE CHIEF JUSTICE and THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 26328 of 2008 Between: Jetmal Champalal Jain S/o.Jethmal Jain M/s.Andhra Conductors (P Ltd., C2, Industrial Estate Kadapa Village, Kadapa Taluq, Kadapa District ..... PETITIONER AND 1 The State of Andhra Pradesh, rep.by its Principle Secretary to Government Revenue Department, Secretariat, Hyderabad 2 The Commissioner of Commercial Taxes, Commercial Tax Department, M.J.Market Nampally Hyderabad 3 The Dy.Commercial Tax Officer-I, O/o.Commercial Tax Officer -I, Kadapa,Kadapa District 4 The Commisioner of Industries, Chirag Ali Lane Abids,Hyderabad 5 The Commercial Tax officer-I, Kadapa,Kadapa District .....RESPONDENT(S) 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 to issue a writ or order or direction more particularly one in the nature of writ of mandamus declaring that the action 3rd respondents in issuing the impugned order dated 4.9.2008 issued is illegal arbitrary,and violation of Article 14,16 and 21 of the Constitution of India and contrary to section4,8,(1) and 25 of Andhra Pradesh Revenue Recovery Act, 1864 and consequently set aside the same and pass Counsel for the Petitioner:MR.P.LAKSHMANA RAO Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following : THE HON'BLE SRI ANIL R. DAVE, THE CHIEF JUSTICE and THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO: 26328 of 2008 ORDER: (THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN ) The proceedings of the 3rd respondent dated 4.9.2008, whereby demand, prior to attachment of land and building, in Form No.4 was issued calling upon the petitioner to pay Rs.49,31,865/- towards arrears of revenue under the APGST and CST Acts, is under challenge in this writ petition. Petitioner claims to have been declared a sick industry by the Government of A.P. on 23.6.1990 as they had suffered heavy losses and had faced union unrest. According to the petitioner, the 5th respondent had issued an endorsement informing them that Rs.49,39,595/- was due towards tax for the assessment years 1983- 84 to 1991-92. Petitioner would contend that the Demand in Form-4, under Section 25 of the Revenue Recovery Act, could only be issued for the correct amount due, and that too only by the Tahsildar and not the 3rd respondent. They claim to have filed an application under the Right to Information Act requesting the Commercial Tax Officer-I, Kadapa to furnish copies of the assessment orders passed under the APGST & CST Acts. In his counter affidavit, the third respondent would submit that the petitioner had allowed the assessment for the period 1983-84 to 1991-92, both under the APGST and CST Acts, to attain finality and that, as a result, Rs.49,31,865/- was due and payable by them. He would give details of the assessment orders for which the tax is due and submit that one of the directors of the company had made a representation on 24.9.1988 to the Deputy Commissioner (CT) seeking payment of the tax due in installments, that the Deputy Commissioner had passed orders on 25.11.1988 granting instalments subject to certain conditions, that another Director of the petitioner company had submitted a representation dated 28.11.1988 to the Dy. Commissioner (CT) that the conditions imposed in the instalment order was erroneous, that they be withdrawn, that, as a result, the Deputy Commissioner, vide proceedings dated 3.12.1988, had withdrawn condition no.4 with regards furnishing a bank guarantee for the balance amount and had substituted it with the word ‘guarantee’ and, thereupon, the petitioner had paid two installments of Rs.70,000/- each, but had defaulted in payment of the subsequent installments. According to the 3rd respondent, for other years also, the company did not make any effort to pay even a single paise despite having collected tax from its customers. The third respondent would submit that a notice in Form IV was issued on 4.9.2008 and sent to the Directors by registered post acknowledgement due to the addresses available with the department, that a copy of the form was also affixed on the gate of the company, that the notices sent to three Directors were returned unserved, that the Managing Director had responded to the Form IV notice and had requested that details of the tax due be furnished, that a personal hearing was given to him on 6.10.2008 on which date he appeared and informed that the company had become sick long back and hence arrears could not be paid. According to the 3rd respondent, the petitioner had not produced any evidence of the company having become sick under the Sick Industrial Companies Act, that an endorsement was issued by the 5th respondent on 6.10.2008 informing that the tax due from the company was Rs.49,31,595/-, that, in continuation of Form-IV, Form-V notice was issued and gazetted on 6.11.2008 and that on 23.10.2008 the petitioner had filed an application under the Right to Information Act seeking copies of the assessment orders. The third respondent would submit that, under Section 16(4) of the APGST Act read with Section 9(2) of the CST Act, arrears of sales tax could be recovered from any defaulter as if it were arrears of land revenue and, therefore, the 3rd respondent had rightly invoked the provisions of the Revenue Recovery Act, that, under Section 17(C), the Deputy Commissioner (CT) had the power of the Collector under the A.P. Revenue Recovery Act for the purpose of recovery of any amount due, that the Deputy Commissioner (CT), Kadapa, in exercise of his powers under the Revenue Recovery Act, had authorized the 3rd respondent, by way of a general order to initiate action against the tax defaulter and, pursuant to the authorization, the 3rd respondent had initiated action against the petitioner company under the Revenue Recovery Act. The 3rd respondent would further submit that the petitioner, having permitted the assessment orders to attain finality, and having failed to make payment pursuant to the installment order passed in their favour, could not now question the recovery proceedings initiated by the 3rd respondent, that such action by the petitioner was only to frustrate the efforts of the department to realize the tax arrears, that the petitioner had not approached the court with clean hands and that the writ petition as filed was a gross abuse of the process of the court. Sri K.Raji Reddy, Learned Special Standing Counsel for Commercial Tax, would refer to the letter addressed by the petitioner on 24.9.1988 wherein they had admitted that the tax due from them, for the assessment years 1983-84 to 1986-87, was for Rs.7,59,086/- and had requested time to pay the said amount in 10 to 12 installments. He would also refer to the proceedings of the personal hearing held on 6.10.2008 wherein Sri J.Champalal Jain, Managing Director of the petitioner company, had affixed his signature in acknowledgment of the fact that the officers had requested the petitioner to clear the arrears of Rs.49,31,595/- for the years 1983-84 to 1991-92 under the APGST &CST Acts to which he had replied that the petitioner company was closed long back and that it was a sick unit from 1988 onwards. Learned counsel would point out that the petitioner did not plead in the course of personal hearing that the assessment orders had not been served on them. He would also refer to the proceedings dated 15.12.2008 whereby the petitioner was informed of the date of service of the assessment orders for the years 1988-89 to 1991-92 and the person on whom the assessment orders were served. It is evident therefrom that the assessment orders, both under the APGST and CST Acts for the assessment years 1988-89 to 1991-92, had been served on the General Manager, and on Sri J.Champalal Jain, the Managing Director of the petitioner Company. It is only if a company has been declared a “sick industrial company”, under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), would it be entitled for protection under Section 22 of the said Act. No proceeding of the BIFR, or the appellate authority under SICA, declaring the petitioner to be a sick industrial company has been brought to our notice. Even assuming that the State Government had declared the petitioner to have become sick, it would not entitle the petitioner to claim protection under Section 22 of the SICA. Section 16(4) of the APGST Act enables recovery of the tax assessed, and not paid by the dealer during the time specified, as arrears of land revenue. Under Section 17-C(1), a Deputy Commissioner shall have the powers of a Collector under the A.P. Revenue Recovery Act, 1864 for the purpose of recovery of any amount due under the APGST Act. It is evident from the counter affidavit that it is pursuant to the order of the Deputy Commissioner (Commercial Tax), Kadapa, that action was initiated against the petitioner under the provisions of the A.P.Revenue Recovery Act. The petitioner’s contention that he had not been furnished copies of the assessment orders is belied by the evidence on record. The documents placed before this Court, by the Special Standing Counsel for Commercial Taxes, would show that the assessment orders were indeed served on the petitioner’s representative, that the petitioner was well aware of the assessment orders having been passed since they had requested to be permitted to pay the tax due in instalments, that, prior to initiation of proceedings under the Revenue Recovery Act, the petitioner had only been requesting the authorities concerned for grant of further time to pay the amount due on the plea that they had suffered huge losses and labour unrest and had not disputed their liability to pay tax or contended that the assessment orders had not been communicated to them. It is evident that the application under the Right to Information Act, seeking details of the date of service of the assessment order, has been made only for the purpose of this writ petition. In their affidavit filed in support of the writ petition, the petitioner has suppressed its earlier correspondence with the Commercial Tax Department, including its representation dated 24.9.1988 and 28.11.1988. These proceedings clearly show that the petitioner had admitted their tax liability and had merely sought time for payment of the tax due in instalments. Jurisdiction under Article 226 of the Constitution of India is discretionary and is not to be exercised for the mere asking. This Court would be loathe to exercise discretion where the petitioner has not approached it with clean hands or has suppressed facts to gain advantage. The writ petition, as filed, is a clear abuse of the process of court and would necessitate dismissal with exemplary costs. However, in the light of the undisputed factual position that the petitioner has suffered huge losses, we refrain from mulcting them with exemplary costs. The writ petition fails and is, accordingly, dismissed. However, in the circumstances, without costs. ___________________ ANIL R. DAVE, CJ _____________________________ RAMESH RANGANATHAN, J April, 2009 asp/nsr