IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FIFTH DAY OF MARCH TWO THOUSAND AND TEN PRESENT THE HON'BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 2 9 3 0 of 2010 Between: M/s. Sri Chakra Cements Limited, 6-3-668/10/66, Durganagar Colony, Panjagutta, Hyderabad, Represented by its Dy.General Manager (Commercial) Sri T.Ramsuri. ..... PETITIONER V/s. The Commercial Tax Officer, Panjagutta Circle, Panjagutta Division, Hyderabad & Anr. .....RESPONDENTS Counsel for the Petitioner : Sri Shaik Jeelani Basha Counsel for the Respondents: Sri AV Krishna Koundinya Spl. SC for CT The Division Bench made the following : (Order follows 2nd page) THE HON'BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 2 9 3 0 of 2010 ORAL ORDER: {Per the Hon’ble Smt.Justice T.Meenakumari} Seeking a writ of mandamus to declare the action of the second respondent in rejecting the stay application by proceedings dated 20-01-2010 in C.C.T’s Ref.No. LIII (2)/7/2010 for the month of August, 2007 penalty levied under section 50 (3) read with section 51(1) of the A.P. VAT Act to a tune of Rs.4,13,844-00 as arbitrary, contrary to the provisions of the Act and also in violation of principles of natural justice and consequently to set aside the same and to grant stay of collection of disputed penalty of Rs.4,13,844-00 for the month of August, 2007 pending disposal of the appeal before the Sales Tax Appellate Tribunal, A.P. Hyderabad, the petitioner filed this writ petition. 2. The petitioner is a Limited Company incorporated under the Companies Act and registered dealer on the rolls of the first respondent. It is stated that the petitioner is engaged in the business of manufacture and sale of cement. The cement is liable to tax @ 12.5% as per residuary entry under VI-Schedule of the AP VAT Act. On 20-9-2007 the petitioner had filed the VAT return for the month of August 2007 within time but could not make full payment thereof. Thereupon, on 09- 10-2007 the first respondent had issued a notice under section 50 (3) of the AP Value Added Tax Act, proposing penalty of Rs.4,13,844-00. 3. In pursuance to the notice dated 09-10-2007 issued by the first respondent, the petitioner filed its explanation on 25-10-2007 stating that the plant of the company was shut-down for thirty days during the months of August and September 2007 and there was a delay in making the payment of the tax and the petitioner-company became sick and the matter is pending adjudication before the BIFR and requested the first respondent to drop the penalty proposed @ 15% on delayed payment of VAT tax for the month of August, 2007. But however, the first respondent through proceedings in Form VAT-203 dated 17-12-2007 confirmed the proposed penalty on the ground that the petitioner company had not responded to the penalty notice. 4. Aggrieved thereby, the petitioner filed an appeal before the Appellate Deputy Commissioner on 08-1-2009 stating that the action of the first respondent in levying penalty under section 50 (3) is contrary to the provisions of the Act. But the Appellate Deputy Commissioner through proceedings dated 11-11-2009 dismissed the appeal filed by the petitioner. 5. Aggrieved by the proceedings dated 11-11- 2009 passed by the Appellate Deputy Commissioner, the petitioner filed second appeal before the Sales Tax Appellate Tribunal on 21-12-2009 and filed stay application before the second respondent on 02-1-2010 but however, the second respondent rejected the stay application through proceedings dated 20-1-2010. 6. Pursuant to the rejection of stay by the second respondent through proceedings dated 20-1-2010, the first respondent is threatening to take coercive steps for recovery of the penalty from the petitioner. 7. It is submitted by the learned counsel for the petitioner that though several contentions were raised before the Appellate Deputy Commissioner, it has refused to grant stay vide the order impugned herein. It is submitted that pursuant to the rejection of stay by the Appellate Deputy Commissioner, the respondents are contemplating to take coercive steps for recovery of the disputed tax. 8. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes. 9. In the facts and circumstances of the case, we are of the opinion that the writ petition can be disposed of at the stage of admission directing the petitioner to deposit half of the disputed tax amount, as per the impugned order within a period of four weeks from the date of receipt of a copy of the order but however, the respondents are directed not to take coercive step for recovery of the balance disputed tax, pending finalisation of the appeal by the Appellate Tribunal. It is made clear that the amount paid, if any, shall be given credit to the above stipulated sum. 10. With these directions, the writ petition is disposed of at the stage of admission. However, in the circumstances there shall be no order as to costs. _____________________ Justice T.Meena Kumari ___________________________________ Justice Nooty Ramamohana Rao March 5, 2010. I s L NB: Furnish CC. in two days. B/o. I s L THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE NOORTY RAMAMOHANA RAO WRIT PETITION No. 2 9 3 0 OF 2010 Judgment of the Division Bench delivered by the Hon'ble Smt. Justice T. Meenakumari) Circulation Entry No. 9 8 Date: 05-03-2010 COMPUTER No. 43 Court Master: I s L