IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 12985 of 2008 Between: Raghavendra Prestress Products Private Limited, flat No.106, Amarchand Sarma Complex, S.P. Road, Secunderabad - 500 003. Rep. by its Director Mr.Somnath A.Patil. ..... PETITIONER AND The Commercial Tax Officer-1, Adoni, Kurnool District. .....RESPONDENT 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 writ, order or direction, more particularly in the nature of Writ of Mandamus declaring the orders No.POR No.18/2007-08 dated 31.3.2008 and No.POR No.08/2007-08 dated 31.03.2008 of the C.T.O., Adoni, in so far as levying interest and penalty on the petitioner for the Assessment year 2002-03 under CST Act as illegal and arbitrary, and accordingly, set aside the same and pass such other or orders. Counsel for the Petitioner: MR.S.CHAKRAPANI Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Division Bench of this Court made the following order: THE HON’BLE SMT. JUSTICE T. MEENA KUMARI A N D THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 12985 OF 2008 O R D E R : { Per the Hon’ble Smt. Justice T. Meena Kumari } Seeking a writ of mandamus declaring the orders POR.No.18/2007-08 and POR.No.08/2007-08 dated 31-3-2008 of the respondent in levying interest and penalty on the petitioner for the assessment year 2002-03 under C.S.T. Act, as illegal, arbitrary and set aside the same and to pass such other suitable orders as this court may deems fit and proper in the circumstances of the case. 2. It is stated that the petitioner is a dealer carrying on business in manufacture and sale of Prestressed Concrete Sleepers, Indian Railways is the lone purchaser. Though the goods were supplied duly raising sale invoices, invariably there was delay in remitting of the funds (sale proceeds) by the Railways. With the result, the petitioner was disabled from paying sales tax within time specified under the provisions of CST Act. As seen from the statement incorporated in the impugned order, there has been marginal delay in filing the returns and paying tax, the delay varying from 1 to 12. The fact remains that the entire amount of tax was paid before expiry of the relevant financial year. 3. It is stated that the assessment year 2002-03 (CST), the assessment was made on 09-6-2005 and 17-5-2005 both under APGST and CST Acts. 4. It is further stated that on 06-8-2007 i.e., after expiry of six years, the Commercial Tax Officer issued notices proposing to levy interest and penalty on the ground of delay in making the payment of taxes due before the stipulated date. Therefore, initiation of these proceedings at this distance of time is nothing but motivated. This treatment of belated levy of interest and penalty has been extended only to the petitioner for the reasons best known to the department. 5. It is also stated that notices were issued for the assessment years 2000-01, 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06 both under APGST and CST Acts proposing to levy interest and penalty under section 9 (2) and 15 (4) of the CST Act. For the assessment year 2000-01 to 2005-06 the respondent proposed to levy of interest of Rs.19,845/- and penalty of Rs.9,09,l131/-. Further in reply to the show cause notices, the petitioner filed objections dated 27-8-2007 contending inter alia that non-payment of tax well within time was due to the reason that sale consideration was not being remitted by the petitioner’s lone customer i.e., Railways in time, but as a law abiding tax payer, the petitioner paid tax from out of its pocket and, at any rate, the delay caused is marginal ranging between 5 to 35 days and therefore proposal to levy interest and penalty deserves dropping. For the assessment year 2002-03, the interest and penalty levied under CST Act, on the petitioner is Rs.5,86,655/- and Rs.1,75,996/- respectively. 6. The learned counsel for the petitioner contended that in the course of personal hearing, the petitioner filed objections on 09-1-2008 stating that invoking of Section 15 (4) or Section 16 (3) of the Act, at this distance point of time was unwarranted and without jurisdiction. The Assessing Officer, having completed the assessment and also re-assessment on the basis of the appellate orders cannot initiate interest or penalty proceedings at this distance point of time, that too, without reserving the liberty to initiate penal proceedings, while making the assessment. 7. The learned counsel for the petitioner further contended that though against the order levying interest and penalty, appeal lies to the Appellate Deputy Commissioner, it is not an efficacious remedy, for the reason that the appellate authorities have not been granting stay of collection of tax, interest or penalty in the State. 8. Heard the learned counsel for the petitioner and the learned standing counsel for Commercial Taxes. 9. As can be seen from the averments, it appears that while passing the impugned orders, the respondent had not considered the objections filed by the petitioner and the learned standing counsel for the respondent is conspicuously silent. Therefore, the said action of the respondent can be termed as violative of principles of natural justice. 10. On hearing the rival contentions and in this background of the matter, we feel, it is a fit case wherein the matter can be remanded to the respondent for consideration afresh after affording reasonable opportunity to the petitioner. Accordingly, the writ petition is disposed of at the stage of admission and the mater is remanded back to the respondent for passing appropriate orders afresh, after affording reasonable opportunity to the petitioner within a period of three months, subject to the condition of the petitioner depositing 1/5th of the penalty within a period of six weeks from the date of receipt of a copy of the order, in default, the impugned order becomes operative. 11. With the above observation, without going into the merits of the case, we set aside the impugned order and at the stage of admission, we allow the writ petition to the extent indicated above. No costs. ________________________ JUSTICE T. MEENA KUMARI . _______________________________ JUSTICE RAMESH RANGANATHAN . 23-6-2008. I s L ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{KURR}