THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.23943 OF 2007 Date:17.06.2011 Between: M/s.Ravindra Solvent Oils Private Limited, Solvent Road, Autonagar, Vijayawada, Krishna District, represented by its Managing Director, Mr. D.Nagendra Babu .. Petitioner And The Appellate Deputy Commissioner(CT), Vijayawada Division, Vijayawada and others .. Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.23943 OF 2007 ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) The petitioner, a private limited company engaged in the manufacture of Rice Bran Oil, claims to have effected stock transfers to their consignees situated outside the State for the financial years 2001- 2002 to 2003-2004. The first respondent passed orders of assessment for these three years in May and June, 2005 respectively rejecting the petitioner’s claim of consignment of goods to other States. Aggrieved thereby, the petitioner preferred an appeal to the first respondent. While the said appeal was pending, the second respondent issued a penalty show cause notice dated 04.08.2005 for the said three assessment years and, thereafter, passed the penalty order on 31.03.2006. The appeal preferred by the petitioner was rejected, against which they preferred a second appeal before the Sales Tax Appellate Tribunal (STAT), Visakhapatnam. They also filed a miscellaneous application before the STAT contending that the Deputy Commissioner did not have the power to levy penalty under Section 7(A)(2) of the Andhra Pradesh General Sales Tax Act, 1957 (for brevity, the Act). The third respondent issued demand notices dated 18.07.2007 and 11.09.2007 respectively demanding the disputed penalty for the said three years, exceeding in all Rs.5,00,00,000/-. A notice of attachment was issued on 10.10.2007 and garnishee proceedings were also issued. Aggrieved thereby, the present writ petition is filed. This Court, by order dated 13.11.2007, granted interim stay of all further proceedings pursuant to the notice of attachment. Sri S.Dwarakanath, learned counsel for the petitioner, would contend that the notice calling upon the petitioner to show cause as to why penalty should not be imposed was issued under Section 14(8) of the Act, whereas the penalty order was passed by the Deputy Commissioner under Section 7(A)(2) of the Act. Learned counsel would contend that, since the ground on which penalty can be levied under Section 7(A)(2) of the Act differs from that of Section 14(8) of the Act, the petitioner was denied an opportunity of showing cause against imposition of penalty under Section 7(A)(2) of the Act. Learned counsel would contend that on this ground alone the impugned order of the Deputy Commissioner levying penalty is liable to be set aside. Sri P.Balaji Varma, learned Standing Counsel for Commercial Taxes, would contend that the F-Forms produced by the petitioner were found to be fake and as such penalty proceedings were initiated; and the impugned order levying penalty under Section 7(A)(2) of the Act is in order. While the allegation, of the petitioner having produced fake F- Forms, is undoubtedly serious, and may well have justified this Court refraining from exercising its discretion in his favour, this issue is also the subject matter of appeal before the STAT. Prima facie, the order of the Deputy Commissioner levying penalty under Section 7(A)(2) of the Act is without giving the petitioner an opportunity of being heard since the show cause notice proposing penalty was issued not under Section 7(A) (2) of the Act, but under Section 14(8) of the Act. In such circumstances, and in as much as the substantive appeal is pending adjudication before the STAT, we do not propose to examine the rival contentions on merits. Ends of justice would be met if, pending disposal of the appeal by the STAT, the respondents are directed not to initiate coercive steps for recovery of the disputed penalty on condition that the petitioner deposits 25% thereof within a period of four weeks from today. The interim order staying the hearing of the appeals before the STAT shall stand withdrawn and further proceedings before the STAT shall go on. The writ petition, with the above observations, shall stand disposed of. However, in the circumstances, without any order as to costs. ________________ (V.V.S. RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 17.06.2011 Note:- Dispatch C.C. in one week. (B/o) KH