THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION No.25437 of 2003 Dated:16.11.2011 Between: M/s.Chamundeswari Enterprises, Represented by its Proprietor, Chunduru Narayana Murthy, S/o.Venkata Narasimha Rao, aged about 48 years, D.No.7-31-11, Gopala Reddy Street, Bank Road, Tenali, Guntur District .. Petitioner And The Commercial Taxes Officer, O/o. Commercial Taxes Officer, Opp: Railway Station, Bapatla Post and Mandal, Guntur District and another .. Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION No.25437 of 2003 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner, a proprietary concern is a registered dealer on the rolls of the second respondent, carrying on the business in G.I. Fittings etc. at Tenali. The first respondent inspected its business premises on 15.10.2003 and proposed prosecution on an allegation that the petitioner is maintaining incorrect accounts. The petitioner alleges that he was coerced to part with the tax of Rs.9,394/- as well as compounding fee of Rs.18,788/-. This action is assailed in the writ petition as illegal and contrary to the Sections 28 and 32 of the Andhra Pradesh General Sales Tax Act, 1957 (the APGST Act) and Rule 59 of the Andhra Pradesh General Sales Tax Rules, 1957. Though the matter was admitted in December 2003, the respondents have not filed counter affidavit. The counsel for the petitioner and the Special Counsel for Commercial Taxes made their submissions. Insofar as the question of jurisdiction of first respondent is concerned, the same is belied by a bare perusal of Section 28(1) of the APGST Act and the notification issued by the Government vide G.O.Ms.No.1091, dated 10.06.1957. Under Section 28(1), an officer authorized by the State Government may require any dealer to produce before him the accounts, registers and other documents and furnish any other information relating to business. Vide notification referred to hereinabove, the Commercial Tax Officers (Intelligence) appointed for collection of intelligence and to investigate evasion of tax by the trade, in their respective jurisdictions are empowered under sub-sections (1) to (6) of Section 28. By G.O.Ms.No.388, dated 09.03.1981, an amendment was made. By reason of this, the Commercial Tax Officers, who are specifically entrusted by the Deputy Commissioner or by Commissioner can also exercise powers under Section 28 of the APGST Act. There is no dispute that the Deputy Commissioner, Guntur vide authorization dated 14.10.2003 authorized the first respondent to inspect the business premises of the petitioner. Insofar as the power of the first respondent to compound fee under Section 28 APGST Act is concerned, the question is squarely covered by a Full Bench of this Court in Abmica Lamp House v. Commercial Tax Officer (Int)-I Enforcement[1]. The method adopted by the Officials of the Commercial Tax Department, especially, Intelligence and Vigilance staff, in inspecting the premises and collecting the tax as well as compounding fee, proposing to launch 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. The inspection was made during the assessment year 2003-2004 and therefore any assessment is barred by limitation. The amount paid by the petitioner will have to be adjusted against any existing or future liability. The writ petition shall stand disposed of accordingly. There shall be no order as to costs. _______________ (V.V.S.RAO, J) _____________________ (SANJAY KUMAR, J) 16.11.2011 KH [1] (2005) 142 STC 551 = (2005) 40 APSTJ 56