IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE NINTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE G. CHANDRAIAH WRIT PETITION NO : 19581 of 2008 Between: M/s. South Central Railway Catering unit, Rep. by its Divisional Commercial Manager, South Central Railway, Vijayawada, Krishna District. ..... PETITIONER AND 1 Sales Tax Appellate Tribunal of A.P. Visakhapatnam Bench, Visakhapatnam. 2 Appellate Commissioner (CT) Vijayawada, Krishna District. 3 Commercial Tax Officer, Seetharam Puram Circle, Vijayawada, Krishna 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 a writ of Mandamus or any other appropriate writ or direction declaring the notice issued in Rc No. 2/2537/2002-2003 (APGST) dt. 2-7-2008 by the 3rd Respondent as illegal and arbitrary and consequently direct the 3rd Respondent not to collect the disputed tax of Rs. 45, 28,829/- from the petitioners pending disposal of the appeal before the 1st respondent and pass such other suitable orders, as this Hon’ble Division Bench deems ﬁt and proper in the circumstances of the case. Counsel for the Petitioner:MR.P.GANGA RAMI REDDY Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Division Bench of this Court made the following order: THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE G. CHANDRAIAH WRIT PETITION NO. 1 9 5 8 1 OF 2008 O R D E R : (Per the Hon’ble Smt. Justice T. Meenakumari ) This writ petition is ﬁled seeking mandamus to declare the notice issued in RC.No.2/2537/2002-2003 (APGST) dated 24-7-2008 by the third respondent as illegal and arbitrary and consequently to direct the third respondent not to collect the disputed tax of Rs.45,28,829-00 from M/s. South Central Railway Catering Unit, represented by its Divisional Commercial Manager, South Central Railway, Vijayawada, Krishna district, pending ﬁnalization of the appeal by the ﬁrst respondent and to pass such other suitable orders as this Court may deem fit and proper in the circumstances of the case. 2. The facts of the case are that the Commercial Tax Oﬃcer, Seetharampuram Circle, Vijayawada had assessed the tax for the assessment year 2002-03 under A.P.G.S.T. Act and levied tax of Rs.1,07,70,399-00 vide assessment order dated 11-5-2005. Questioning the impugned assessment order, dated 11-5-2005, passed by the Commercial Tax Oﬃcer, Seetharampuram Circle, Vijayawada, the petitioner ﬁled an appeal before the second respondent, who is no other than the Appellate Deputy Commercial (CT), Vijayawada, Krishna district, who in turn passed the order dated 22-3-2006 resulting in reduction of sales tax payable in the ﬁnancial year 2002- 03 to Rs.97,13,030 from Rs.1,07,70,399-00. Aggrieved of the orders passed by the second respondent, the petitioner ﬁled an appeal before the ﬁrst respondent and the same was duly numbered as TA.No.249 of 2007. Further the said appeal is listed for hearing on 21-10- 2008. The stay application ﬁled before the Joint Commissioner (CT) (Legal), Hyderabad is pending consideration. While things stood thus, the third respondent issued a notice dated 24-7-2008 calling upon the petitioner to pay the balance of Rs.45,28,829-00 within three days from the date of receipt of the said notice, failing which, action will be initiated under the provisions of A.P. Revenue Recovery Act, 1864. 3. Sri P.Ganga Rami Reddy, the learned counsel representing the petitioner seeks to contend that the South Central Railway is not liable to pay any tax under section 5-C of the APGST Act, 1957 as it cannot be said to be a “dealer”, running any restaurant or eating house or hotel by whatever name may be called. It is also contended that the Railway having came into existence by an Act of Parliament viz., “ The Railways Act 1989 ” cannot undertake any activity not contemplated b6y its creating statute. Further the Act does not contemplate running of any restaurant or eating house or hotel etc., by any Railway. 4. The learned counsel further contended that the South Central Railway cannot be considered to be carrying on the business under section 2 (1) (bbb) of APGST Act, 1957 and consequently cannot be considered as involved in sale or purchase by goods for business purposes or in the course of business. The learned counsel for the petitioner had taken this court through the various provisions of the Act and submitted that the South Central Railway is not exigible to sales tax as it oﬀends Article 285 (1) of the Constitution of India. 5. The learned counsel for the petitioner had vehemently argued that Vijayawada Catering unit is a branch of South Central Railway, whose Railway Administration is situated at Secunderabad. Under APGST Act, 1957 Railway Administration as deﬁned under the Railways Act, 1989 is deemed to be a dealer under Explanation-IV to Section 2 (1) (e) of the APGST Act, 1957. Under section 2 (32) (a) of the Railways Act, the Railway Administration has been deﬁned to mean the General Manager of a Zonal Railway. Admittedly, South Central Railway Zone Head Oﬃce is situated at Rail Nilayam, Secunderabad, having jurisdiction over so many catering units including Vijayawada. Therefore, the third respondent lacks territorial jurisdiction over Secunderabad area where the headquarters of the Railways are situated. The assessment of Vijayawada Catering Unit is only part of the turnover of the Railway Administration. Under the APGST Act, whole turnover of the dealer has to be assessed but not on the turnover of branch wise assessment. Hence, the assessment made by the third respondent is without territorial jurisdiction and contrary to the scheme of the APGST Act, 1957. 6. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes. 7. In the facts and circumstances of the case, without going into the merits of the matter, 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 eight weeks from the date of receipt of a copy of this order and the respondents are directed not to take coercive step for recovery of the tax, pending ﬁnalisation of the appeal by the Appellate Authority. It is made clear that the amount paid, if any, shall be given credit to the above stipulated sum. With these directions, the writ petition is disposed of at the stage of admission. No order as to costs. ___________________ T. MEENA KUMARI, J. __________________ G. CHANDRAIAH, J. 09-09-2008. I s L NB: *MOST URGENT/TOP PRIORITY: (1) Operative Portion of the order by wire at party’s costs. (2) Furnish CC by 12-9-2008. // BY ORDER // I s L. ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{VSMI}