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 : 19607 of 2008 Between: M/s Analogics Technomatics (P) Ltd., (Presently analogics Tech India Ltd) Padmarao Nagar, Secunderabad. Rep by its General Manager, Sri. C.Narasimha Swamy. ..... PETITIONER AND 1 The Joint Commissioner (CT) Legal, O/o. the Commissioner of Comemrcial Taxes, C.C.T., Complex., IInd Floor, Nampally, M.J.Market Road, Hyderabad. 2 The Commercial Tax officer, Basheerbagh Circle, Abids Division, 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 issue a writ of Mandamus declaring the impugned order dated 26.08.2008 passed by the 1st Respondent in CCT's Ref.No.Lv (1)/618/2008 Dated 26.08.2008 (Ex.P.1) as illegal, arbitrary unjust and contrary to the facts and Law and to pass such Counsel for the Petitioner: MR.S.R.R.VISWANATH 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. 19607 OF 2008 ORAL ORDER : ( Per the Hon’ble Smt. Justice T. Meena Kumari }. This writ petition is ﬁled seeking mandamus to declare the impugned order dated 26-8-2008 passed by the ﬁrst respondent in CCT’s Ref.No.LV (1)/618/2008, dated 26-8-2008 as illegal, arbitrary, unjust and contrary to the facts 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 petitioner- company is registered under the Companies Act, 1956. For the purpose of Commercial Taxes, the petitioner company was registered under the APGST Act, 1957. (After its repeal and substitution by the AP Value Added Tax Act, 2005). During the year 2003-04, the petitioner company manufactured “smart ticket issuing machines’ which are Hand Held Computers. The petitioner company ﬁled the monthly Form-VI CST returns and paid the taxes due. The claim of the petitioner company for the concessional rate of tax of 2% under G.O.Ms.No.105 Revenue (CT-II) Department, dated 9-3-2002 was accepted by the second respondent, who is the assessing authority and had completed ﬁnal assessment vide assessment no.3106/2003-04/CST dated 24-3-2007. The second respondent passed revised proceedings No.3106/2003- 04/CST dated 09-4-2007. 3. The Deputy Commissioner (CT) Abids Division, Hyderabad exercised its revisional powers and revised the proceedings of the second respondent and withdrew the concessional rate of tax of 2% allowed by the second respondent. By withdrawing the concessional rate of 2% and imposing tax @ 4% the revisional authority imposed an additional tax of Rs.11,54,534-00 on the petitioner company vide its order RR.No.55/07-08 dated 21-5-2008. Thereafter, the second respondent passed consequential orders giving eﬀect to the revisional orders passed by the revisional authority vide orders RC.No.2369/03-04 (CST) dated 29-5-2008. Aggrieved by the revisional orders passed by the Deputy Commissioner, (CT), Abids, Hyderabad and the consequential orders passed by the second respondent, the petitioner company ﬁled an appeal in Form-II before the Sales Tax Appellate Tribunal on 11-8- 2008. 4. It is stated that the petitioner company besides ﬁling appeal, the petitioner company also ﬁled an application seeking stay of collection of disputed tax in Form No. XXII before the first respondent on 08-8-2008. 5. It is stated that the petitioner company explained to the ﬁrst respondent, various grounds on which the order of revision passed by the Deputy Commissioner (CT) Abids, Hyderabad, is illegal and arbitrary but the ﬁrst respondent did not consider any of the submissions made by the petitioner company. The ﬁrst respondent further did not consider the balance of convenience which is very much in favour of the petitioner company and rejected the stay petition through orders in CCT.s Ref.No.LV(1)/618/2008, dated 26-8-2008, which is impugned in this writ petition. 6. It is further stated that denial of concessional rate of tax at 2% to the petitioner company is wholly unjustiﬁed. Further the petitioner company has collected tax only @ 2% from its customers and there is no way it can pass on the tax burden to its customers at this length of time. Any forcible collection of the additional tax imposed will seriously impair the ﬁnancial position of the company. This fact was also not considered by the ﬁrst respondent, while rejecting the stay application. 7. Dr.S.R.R. Viswanath, the learned counsel representing M/s. Analogics Technomatics (P) Limited seeks to contend that the impugned stay rejection order passed by the ﬁrst respondent is illegal and arbitrary. Further the impugned order is too cryptic and does not reveal even cursory evaluation of facts and legal provisions to indicate application of mind. The ﬁrst respondent passed the impugned order dated 26-8-2008 unjustly and rejected the stay application ﬁled by the petitioner before it. The forcible collection of the disputed tax of Rs.11,54,534-00 would cause severe hardship to the ﬁnancial position of the petitioner company and may drive it out of business. 8. The learned counsel for the petitioner had taken this court through the various impugned orders and contended that the ﬁrst respondent did not consider the fact that the revisional authority had committed an egregious mistake in revising the order passed by the second respondent, which had ceased to exist. The second respondent had made original assessment on 24-3-2007. Subsequently, the second respondent had revised his own orders vide orders dated 9-4-2007. But the revisional authority proposed to revise the order of the second respondent dated 24-3-2007 and revised the same though it had ceased to exist. To cover up the mistake the revisional authority may awkward attempt and inserted the date 09-4-2007 besides the date 24-3-2008 in ink. The action of the revisional authority in revising the order, which had ceased to exist is illegal and arbitrary. The petitioner company placed reliance on the decisions in CHUNNILAL OMKARMAL (I) LIMITED V/s. CIT reported in 24 ITR 233 (MP) and CIT V/s. VIPY SOLVEX PRODUCTS (P) LTD. Reported in (1997) 228 ITR 587 (MP). 9. The learned counsel further submitted that the ﬁrst respondent has ignored the fact that Dr.T.H.Hanuman Chowdary, Director Center for Telecommunications Management and Studies (CTMs) and who was also for sometime Technology Adviser to the Government of Andhra Pradesh gave his considered opinion that what the assessee company manufactured is Hand Held Computers coming within the ambit of entry 38-A of ﬁrst schedule of the APGST Act, 1957 and as such is entitled to concessional rate of tax at 2% under GO.Msw.No.105 Revenue (CT-II) dated 09-3-2002. 10. The learned counsel also submitted that the ﬁrst respondent ignored the fact that the annexure to the notiﬁcation no.2 of GO.Ms.No.105 contains in all 32 categories of items and only for ﬁrst 26 serial numbers the HSN code numbers are given. For the serial numbers 27 to 32 no HSN code numbers are prescribed. Hence, all items falling under entry 38-A of the ﬁrst schedule without regard to their HSN code numbers are entitled to concessional rate of tax at 2%. Since Hand Held Computers manufactured by the petitioner company falls under entry 38-A of ﬁrst schedule to the APGST Act, 1957 their sales are liable to tax only at 2% under the CST Act, 1956. In the light of the facts and circumstances, the learned counsel for the petitioner prayed this Court to grant stay of collection of the aforesaid disputed tax raised under the CST Act, 1956 under the impugned revisional orders and given eﬀect to by the second respondent vide orders in RC.No.2369/03-04 (CST) dated 29-5-2008 against which an appeal is ﬁled before the Sales Tax Appellate Tribunal, pending disposal of the above writ petition and to pass such other suitable orders. 11. Heard the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes. 12. 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. 13. 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{LS}