THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION No. 7514 of 2011 ORDER: (Per Goda Raghuram, J) The validity of the Proceedings dt. 19.01.2011, for the period 2008-09 to 2009-10 passed under Section 53 (I) (ii) of the A.P. VAT Act, 2005 has been challenged as without jurisdiction. The petitioner is a Proprietary concern carrying on business in manufacture and sale of vehicle covers of two and four wheelers and was registered on the rolls of the 2nd respondent under the Central Sales Tax Act and under the A.P. VAT Act. While the 2nd respondent is the territorial assessing authority, the 1st respondent conducted audit of the business premises of the petitioner on 9.7.2010 and issued notice of assessment in Form 305A on 14.7.2010. To the notice, petitioner filed a detailed reply including with regard to the lack of jurisdiction, of the 1st respondent. Nevertheless, the 1st respondent passed orders of assessment on 13.8.2010 without considering the contentions of the petitioner. Aggrieved, the petitioner filed W.P.No. 32089 of 2010. Following the earlier orders in W.P.No. 855 of 2008 dt. 30.12.2010, this court by its order dt. 24.1.2011 allowed W.P.No. 32086 of 2010 holding that the authorisation to audit under Section 43 read with Rule 59(1)(7) of the VAT Act, 2005 itself does not enable Audit Officer to undertake assessment. This Court declared the assessment orders and consequential orders if any under Section 53 of the VAT Act as invalid and the assessment orders were remitted to the respective Audit Officers, directing to submit audit reports as contemplated under Chapter VII of the VAT Audit Manual for appropriate Post Audit Action. However, pursuant to the final assessment order dt. 13.8.2010 passed by the 1st respondent and despite its invalidation by the Judgement of this court in W.P.No. 32086 of 2010, the 1st respondent initiated penalty proceedings and passed the impugned order dt. 19.1.2011 imposing the penalty of Rs. 1,07,545/-. It is fairly stated by Sri. Balaji Varma, the learned Standing Counsel for the Commercial Taxes Department that in view of the substantive final assessment order passed by the 1st respondent dt. 13.8.2010 having been invalidated by the Judgement of this Court on 24.2.2011 in W.P.No. 32089 of 2010, the consequent penalty proceedings cannot be sustained. It is further submitted that after fresh assessment orders are passed, if appropriate, the authorities may be at liberty to initiate penalty proceedings but in any event the present impugned proceedings are unsustainable. In the circumstances above, the impugned penalty proceedings dt. 19.1.2011 passed by the 1st respondent for the period 2008-09 to 2009-10 under Section 53 (I) (ii) of the A.P. VAT Act, 2005, is quashed. The writ petition is allowed. There shall be no order as to costs. ___________________ GODA RAGHURAM, J ____​_____________________ ASHUTOSH MOHUNTA, J 02.08.2011. KRB. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION No. 7514 of 2011. ORDER: (Per Goda Raghuram, J) DT. 02.08.2011.