IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE ELEVENTH DAY OF FEBRUARY TWO THOUSAND AND NINE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH & THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No.2174 of 1999 Between: M/s. Aizant Drug Research Solutions Private Limited, Sy.Nos. 172 & 173, Apparel Park Road, Dulapalli Village, Ranga Reddy District - 500 014. Rep. by R. Chengal Reddy, Accounts Manager. ..... PETITIONER AND 1 Commercial Tax Officer, Malkajgiri Circle, Hyderabad. 2 Appellate Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad. 3 Additional Commissioner (CT), Legal, Hyderabad. 4 Commissioner of Commercial Taxes, Hyderabad, Andhra Pradesh. 5 Government of Andhra Pradesh, Through Principal Secretary to Government, Revenue Department, Hyderabad. .....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 to issue a Writ, Order or direction particularly one in the nature of a WRIT OF CERTIORARI quashing Rule 25(8) of the APVAT Rules, 2005, as ultra vires the provisions of the APVAT Act, 2005; alternatively read down the Rule 25(8) of the APVAT Rules, 2005 to mean Rule 25(8) is not applicable where Input Tax Credit is not utilised and to quash the Notice of demand dated 18-12- 2008 issued by the Respondent No.1 and quash the order dated 23- 01-2009 passed by learned Additional Commissioner (CT) Legal, Hyderabad, rejecting stay as illegal, arbitrary, violative of principles of natural justice and violative of Article 14 of the Constitution of India and consequently restran the respondents from recovering from the petitioner a sum of Rs. 5,78,407/- towards penalty consequent to the proceedings for refund of input tax credit for the period September, 2007 to June, 2008 and pass Counsel for the Petitioner:LAKSHMI KUMARAN & SRIDHARAN Counsel for the Respondent No.: GP FOR COMMERCIAL TAX The Court made the following: Form-NIC-OGS/WP{SPJS} THE HON'BLE MR JUSTICE V.ESWARAIAH & THE HON'BLE MR JUSTICE VILAS V. AFZULPURKAR WRIT PETITION No.2174 of 2009 ORDER: (per Hon’ble Sri Justice V.Eswaraiah) It is stated that the petitioner questioned penalty order of the Assistant Commissioner (Commercial Taxes) Audit, Saroornagar Division, Hyderabad in TIN No.28389899549/VAT Penalty dated 22.10.2008 in levying penalty of Rs.6,74,478/- which is equivalent to 25% of the tax deducted as per Sec.53(1) of A.P.VAT Act 2005 before the 2nd respondent-Appellate Deputy Commissioner (Commercial Taxes) Hyderabad Rural Division, and pending disposal of the appeal, an application was filed seeking stay of the penalty order on 18.11.2008, but the 2nd respondent-Appellate Authority by order dated 29.11.2008, in Appeal No.S/29/2008-09-VAT, rejected the stay petition. Aggrieved by the said order of the 2nd respondent-Appellate Authority, the petitioner filed a revision before the 3rd respondent- Additional Commissioner (Commercial Taxes) Legal, Hyderabad and the 3rd respondent also by the impugned order dated 23.01.2009 in CCT’s Ref.No.LIII(4)/796/08, rejected the revision. The writ petition is filed questioning the impugned order as well as the Rule-25(8) of A.P. VAT Rules, 2005. During course of arguments, it is submitted that a regular appeal against the assessment is pending before the 2nd respondent and the impugned order itself is an order relating to the levy of the penalty alone. We are of the opinion that it would be just and proper to grant stay of the penalty order pending appeal before the 2nd respondent, subject to condition of the petitioner depositing 25% of the disputed penalty. The Writ Petition is, accordingly, disposed of, granting stay of the disputed penalty, subject to condition that on the petitioner depositing 25% of the disputed penalty to the credit of the assessing Officer, within a period of 6 (six) weeks from today. However, the petitioner is at liberty to question the Rule-25(8) of A.P.VAT Rules, 2005, after a final order is passed by the 2nd respondent Appellate Deputy Commissioner. No order as to costs. _____________________ V.ESWARAIAH,J _______________________________ VILAS V. AFZULPURKAR,J Dated: 11.02.2009 Dsr Note: Furnish copy tomorrow B/o Dsr .... REGISTRAR // TRUE COPY // SECTION OFFICER To 1 Commercial Tax Officer, Malkajgiri Circle, Hyderabad. 2 Appellate Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad. 3 Additional Commissioner (CT), Legal, Hyderabad. 4 Commissioner of Commercial Taxes, Hyderabad, Andhra Pradesh. 5 Government of Andhra Pradesh, Through Principal Secretary to Government, Revenue Department, Hyderabad. 6 2. 2CCs to 7. 2CD copies