IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 35902 OF 1998 AND CRIMINAL PETITION NO. 352 OF 2000 Between: M/s Anand Ispat Udyog Limited , Mahaboobnagar and one another ..... PETITIONERS AND 1 The Commissioner of Central Excise (Appeals) Central Excise Building and three others .....RESPONDENT(S) ORDER: (Per Sri Justice GHULAM MOHAMMED) This Writ Petition has been filed seeking Writ of Mandamus, declaring the provisions of Section 95 (ii) (a) of Kar Vivad Samadhan Scheme, 1988, as introduced by Finance (No.2) Act, 1998, as unconstitutional and to strike down the said provision inasmuch as the authority has passed an order against the petitioners and pursuant to which, the Assistant Collector (Legal) the third respondent had launched proceedings against them under the provisions of Section 9 of the Excise Act. Thereafter, the matter was carried to the Customs, Excise and Service Tax Appellate Tribunal south Zonal Bench at Bangalore by the Commissioner of Customs and Central Excise Hyderabad, seeking stay of the operation of the impugned order dated 30.10.2008 passed in Appeal No. 16/2008 (H- III) (D) CE. But the same was rejected by the Customs, Excise and Service Tax Appellate Tribunal, south Zonal Bench, at Bangalore. Be that as it may, when once the order of the assessing authority was set aside, the appeal stands allowed and the prosecution case also stands quashed in view of the judgment of the Supreme Court reported in K.C. BUILDERS AND ANOTHER VS. ASSISTANT COMMISSIONER OF INCOME TAX[1], wherein the Supreme Court at paragraphs 24 and 25 held as under: “24. In the instant case, the penalties levied under Section 271 (1) © were cancelled by the respondent by giving effect to the order of the Income Tax Appellate Tribunal in ITAs Nos. 3129- 32. It is settled law that levy of penalties and prosecution under Section 276-C are simultaneous. Hence, once the penalties are cancelled on the ground that there is no concealment, the quashing of prosecution under Section 276-C is automatic. 25. In our opinion, the appellants cannot be made to suffer and face the rigours of criminal trial when the same cannot be sustained in the eye of the law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supersedes the order of the assessing officer under Section 143(3) more so when the assessing officer cancelled the penalty levied.” Following the above judgment of the Supreme Court, this Writ Petition is allowed and the order passed by the Assessing Authority is set aside. The Criminal Petition stands allowed and the prosecution also stands quashed. There shall be no order as to costs. _____________________________ GHULAM MOHAMMED, J ______________________________ NOOTY RAMAMOHANA RAO, J Dt. 26.08.2009 KA ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. 2 CD copies [1] (2004) 2 SCC 731