IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE ELEVENTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 14061 of 2008 Between: M/s. Prudential Mouli Sugars Ltd., Nindra, Chittoor District rep. by its Authorized Signatory, Mr. Bashwant. ..... PETITIONER AND 1 The Sale Tax Appellagte Tribunal, A.P., Hyderabad, Rep. by its Secretary. 2 The Jt. Commissioner of Commercial Taxes ( Legal), A.P., Office of the Commissioner (CT), Nampally Station Road, Hyderabad. 3 The Appellate Dy. Commissioner of Commercial Taxes, N.R.Pet, Kurnool. 4 The Additional Asst. Commercial Tax Officer, Puttur, Chittoor District. .....RESPONDENTS 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 an appropriate writ, order or direction, preferably one in the nature of a writ of Mandmaus, declaring the action on the part of the 1st respondent in dismissing the appeal vide its order dated 11-12- 2007 in T.A.No.85/2000, ( ﬁled as Annexure P1) conﬁrming the levy of Rs. 9,39,027/- on the alleged misuse of ' C ' Forms as illegal, arbitrary besides being quite contrary to the provisions of the Act, and to pass such other suitable orders as this Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.A.K.JAISWAL Counsel for the Respondents: GP FOR COMMERCIAL TAX The Division Bench of this Court made the following order: (contd.2nd page) THE HON’BLE SMT. JUSTICE T. MEENA KUMARI AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN *** WRIT PETITION No. 14061 OF 2008 ORAL ORDER : { Per the Hon’ble Smt. Justice T. Meena Kumari } This writ petition is ﬁled seeking a writ of mandamus, declaring the action of the ﬁrst respondent in dismissing the appeal vide its order dated 11-12-2007 in TA.No.85/2000 conﬁrming the levy of Rs.9,39,l027-00 on the alleged mis-use of ‘C’ Forms as illegal, arbitrary besides being quite contrary to the provisions of the Act and to pass such other suitable orders as this Court may deem fit and proper in the circumstances of the case. 2. The petitioner challenges the penalty order passed by the ﬁrst respondent dated 11-12-2007 in TA.No.85 of 2007 conﬁrming the revision order passed by the second respondent levying penalty of Rs.9,39,027-00 for the alleged misuse of ‘C’ form and to declare the said penalty order as illegal, arbitrary besides being quite contrary to the provisions of the Act. 3. It is stated that the petitioner is a registered dealer on the rolls of the fourth respondent under the APGST and CST Acts having its registered oﬃce at Srinagar colony, Hyderabad and factor/plant located at Nindra, Chittoor district, engaged in the manufacture of sugar. It is stated that the petitioner under the bonaﬁde belief purchased material like cement, steel, weighbridge, electrical transformers, electrical goods, air conditioners etc., for setting up of sugar plant at Nindra, Chittoor district by way of issuing ‘C’ form for the said purchases. The registration certiﬁcate issued by the registering authority in which the petitioner was authorized to purchase the following goods. (a) For re-sale …………………… (b) For use in manufacture – plant and machinery, equipment, tools, spare parts, stores and accessories for use in the sugar industry, fuel or lubricants. (c) ……………………………… (d) ……………………………… It is stated that the said purchases made by the petitioner were utilized for setting up of sugar plant at Nindra by way of issuing ‘C’ forms to avail concessional rate of tax on the above said purchases. Initially, the registering authority, the fourth respondent, disallowed the concessional rate of tax on the ground that the petitioner has misused ‘C’ forms for busying the above said goods at concessional rate as they were not authorized to do so as per the provisions of the Registration Certiﬁcate and penalty was also levied for the above alleged misuse of ‘C’ forms vide proceedings RC.No.CTR/01/4/1480, dated 08-1-1996. Aggrieved by the penalty, the petitioner preferred an appeal through proceedings no. 224/95-96 (CTR) dated 17-4-1996. While things stood thus, the second respondent revised the said appeal order passed by the third respondent vide Proceedings in CCT’s Ref.No. L.III (3)/1084/98, dated 30- 11-1999. The said revision order passed by the second respondent was challenged by way of an appeal before the ﬁrst respondent in TA.No.85 of 2000 raising substantial grounds along with stay application in TMP.No.404/2000. After hearing both sides, the ﬁrst respondent was pleased to grant conditional stay on depositing one-third of the disputed penalty vide order dated 12-7-2000 in TMP.No.404/2000 which was complied with by the petitioner within the stipulated time granted. But the ﬁrst respondent erroneously dismissed the above appeal through order dated 11-12- 2007 in TA.No.85 of 2000 on various grounds, one among them being that the petitioner while obtaining registration certiﬁcate, they would have mentioned the goods like steel, cement, weigh bridge etc. separately in the application form before the registering authority and since it was not mentioned in the registration certiﬁcate, the petitioner knowingly made a false declaration by way of issuing ‘C’ forms while purchasing the goods. Aggrieved by the order passed by the ﬁrst respondent, a tax Revision Case under section 22 of the APGST Act had been preferred on 17-4-2008 before this court, viz., TREVC (SR) raising substantial questions of law. As this Court has no power to grant stay in TREVC under section 22 of the Act, the petitioner having been left with no other eﬀective and alternative remedy is constrained to approach this court to seek relief under Article 226 of the Constitution of India on the ground that the impugned order passed by the ﬁrst respondent is without considering the grounds of appeal which are self-explanatory in nature. Further the impugned order passed by the ﬁrst respondent is an erroneous order by coming to the conclusion that the petitioner had made false declaration by issuing ‘C’ forms and that the levy of penalty is unjustiﬁed if mens rea is not established as laid down by various pronouncements. The impugned order is quite contrary to the authoritative pronouncements. Hence, the present writ petition. 4. Heard Sri A. K. Jaiswal, the learned counsel for the petitioner and the learned standing counsel for the respondents. 5. It is submitted by the learned counsel for the petitioner that the action of the ﬁrst respondent in dismissing the appeal vide its order dated 11-12-2007 in TA.No.85/2000 conﬁrming the levy of Rs.9,39,l027-00 on the alleged mis-use of ‘C’ Forms as illegal, arbitrary besides being quite contrary to the provisions of the Act. 6. We have gone through the record. We feel that the interest of justice would have been met if stay was granted pending appeal, subject to the condition of the petitioner depositing half of the disputed tax and 25% of the penalty and interest. Accordingly, the writ petition is disposed at the stage of admission directing the petitioner to deposit 25% of the penalty and interest within a period of two weeks from the date of receipt of a copy of this order and in the meanwhile the respondents are directed not to take coercive steps for recovery of the same, pending TRC.No.56 of 2008. The deposit of amount shall be without prejudice to the rights of the petitioner in appeal. If any amount has already been paid by the petitioner, the same shall be given credit. 6. The writ petition is accordingly disposed of at the stage of admission. No costs. ________________________ JUSTICE T . MEENA KUMARI , ______________________________ JUSTICE RAMESH RANGANATHAN, 11-9-2008 I s L NB: *MOST URGENT/TOP PRIORITY: (1) Operative Portion of the order by wire at party’s costs. (2) Furnish CC of the order positively within three days. // BY ORDER // I s L ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{KSRANI}