THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.16430 of 2010 Dated:06.12.2010 Between: M/s.A.P.Aksh Broad Band Limited. …Petitioner and Commercial Tax Officer, Jubilee Hills Circle, Hyderabad. …Respondent THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.16430 of 2010 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a dealer on the rolls of the respondent under the Andhra Pradesh Value Added Tax Act, 2005 (VAT Act). For the assessment years 2005-2006 and 2006-2007, they filed returns with ‘NIL’ turnover. The respondent, however, issued a show cause notice and, after obtaining objections, passed orders on 29.03.2010 assessing the value added tax payable by the petitioner. This is subject matter of two writ petitions, being W.P.Nos.9683 and 9701 of 2010. These matters have been reserved for judgment. In this case the controversy is with regard to non-issuance of C Form by the respondent, admittedly, on the ground that for 2005- 2006 and 2006-2007 the petitioner is in arrears of value added tax. When the C Forms were denied, the present writ petition is filed. This Court heard the Counsel for the petitioner and the Special Counsel for Commercial Tax Department. Indisputably, interstate transactions covered by a certificate in Form C, issued under Rule 9 of the Central Sales Tax Rules, 1957, entitles the assessee to claim concessional rate of tax. The petitioner, therefore, applied for such C Forms to certify the sales under which they purchased Optical Fibre Cables and other material from their suppliers. If the C Forms are not issued, they shall be liable to pay tax without availing concession. The question, therefore, is when a purchaser is in arrears of tax to the State of Andhra Pradesh, can he be denied the C Forms to enable the dealer to certify the sales? The issue appears to be no more res integra. I n Sri Kamadhenu Khadi & Village Industries Welfare Society, Kolluru v Commercial Tax Officer, Tenali[1] a Division Bench of this Court considered the question whether it is competent to the Commercial Tax Officer to deny the way-bills to compel the payment of tax arrears? Answering the question in the negative, the Bench observed as under. In as much as the issuance of the way bills depends upon the payment of cost; under Rule 45 of the Andhra Pradesh General Sales Tax Rules, 1957, payment of tax is not one of the conditions prescribed in those Rules. Therefore, in our view, the defence taken by the respondent is untenable. We may also point out here that in M/s.Dabur India Ltd. Vs. State of U.P. (1) A.I.R. 1990 Supreme Court 1814. The Supreme Court observed that Government should not take extra-legal steps or manoeuvre to coerce citizens to make payment which they are not legally obliged to make. Relying on the observation of the Supreme Court, the learned counsel for the petitioner submits that as the petitioner is exempted from payment of tax, non-issuance of the way bills is illegal. We do not consider it necessary to go into the exemption of tax. In view of the above observations of the Supreme Court, even if any tax is due from the petitioner, denial of the way bills is not the proper way to recover the tax. The Special Counsel has not brought to our notice any provision in the VAT Act or the Central Sales Tax Act, 1956, which empowers denial of C Forms to the petitioner. Therefore, applying the ratio in Sri Kamadhenu Khadi & Village Industries Welfare Society, this Writ Petition is allowed directing the respondent to supply the C Forms. This order shall not preclude the respondent from initiating other proceedings for recovery of tax arrears, if any. _______________ (V.V.S.RAO, J) _____________________________ (RAMESH RANGANATHAN, J) 06.12.2010 vs [1] (1996) 23 APSTJ 141