THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 22698 of 2009 Dated: 30-10-2009 Between: M/s Punj Lloyd Limited, Amalapuram East Godavari District, rep. By its Senior Manager (F&A) Mr.Anil Kumar Goel …Petitioner and The Commercial Tax Officer, Amalapuram, East Godavari Dist. and others. …Respondents. ORALORDER: (Per GR,J) The order of the 3rd respondent dated 22.09.2009 declining grant of stay on a petition, substantively against the order of penalty dated 16.03.2009 passed by the 1st respondent, is assailed in this writ petition. The petitioner is a registered dealer under the provisions of the A.P. General Sales Tax Act 1957 (‘the 1957 Act’) and the Central Sales Tax Act 1956, on the rolls of the 1st respondent. It is engaged in execution of work contract. By the order dated 06.02.2008 the 1st respondent finalised the assessment for 2004-2005. Thereagainst the petitioner preferred an appeal to the 2nd respondent contending that as the contract was extended beyond the period of one year the assessment ought to have been finalised as per Rule 6(3)(i) of the APGST Rules taking the material value into consideration. By an order dated 07.06.2008 the appellate authority determined the turnover of the assess under Rule 6(3)(i) determining the gross and net turnovers after excluding the exempted turnover and further directed the assessing authority to verify the exempted turnover of Rs.5,32,01,586/- and if it involved any transfer of property in the contract executed by the dealer directing that such turnover be disallowed and added to the net turnover of Rs.14,72,03,055/-. While so, the Deputy Commissioner (CT), Kakinada by an order dated 07.02.2009 revised the assessment order, after due process and proposed to add gross profit at 20% on the suppressed turnover, determining the total turnover suppressed including the incorporation expenses at Rs.71,81,180/- and determined the tax due thereon @ 8% i.e., Rs.5,74,494/- and directed the 1st respondent to give effect to this order. Against the revisional order dated 07.02.2009 the petitioner preferred an appeal before the Sales Tax Appellate Tribunal, Additional Bench at Visakhapatnam, numbered as TA No. 261 of 2009. The appeal is pending. Consequent on the order dated 07.02.2009 of the revisional authority, the 1st respondent by the order dated 16.03.2009 and on a conclusion that there was an intentional suppression of the purchase turnover leading to tax evasion of Rs.5,74,494/- determined a penalty of Rs.28,72,470/-, u/Sec. 14(4) of the 1957 Act. Aggrieved by the penalty order dated 16.03.2009 of the 1st respondent the petitioner preferred an appeal to the 2nd respondent along with an application for stay of collection of the disputed penalty. The 2nd respondent declined to grant stay by the order dt. 01.06.2009. Aggrieved thereby the petitioner preferred a revision before the 3rd respondent, which was rejected by the impugned proceedings dated 22.09.2009. Sri S.R.Ashok, the learned Senior Counsel representing the petitioner contends that the order of penalty imposed by the 1st respondent is patently without jurisdiction. We are not inclined to consider this contention on the merits of the penalty order or review the said order as the substantive appeal preferred by the petitioner thereagainst is pending before the 2nd respondent. The 1st respondent had determined the penalty exercising power u/Sec. 14(4) which enables imposition of a penalty as spelt out in Sec.14(8) of the 1957 Act. Sec. 14(8) enjoins that the penalty shall not be less than three times but may extend to five times of the tax due in case where the assessing authority is satisfied that the failure of the dealer to disclose the whole or a part of the turnover or other particulars correctly, or to submit the return before the prescribed date, was wilful. Where such failure is not wilful Clause (b) of Section 14(8) stipulates that the penalty should not exceed one half of the tax due. Whether the suppression of the purchase turnover by the petitioner was wilful or otherwise is a matter that ought to be and would be considered by the 2nd respondent in the appeal preferred by the petitioner. As the appeal is pending and against an order of penalty, we consider it inequitable that the respondents should collect the penalty which is determined at five times the tax liability, particularly in the context of the fact that the substantive tax liability determined has already been paid by the petitioner. We are of the considered view, in the circumstances, that ends of justice would be met by granting stay of all further proceedings including collection of the penalty as determined by the order of the 1st respondent dated 16.03.2009, on condition that the petitioner deposits 50 per cent of penalty as determined by the order of the 1st respondent dated 16.03.2009, within a period of four weeks from the date of receipt of a copy of this order. The order of the 3rd respondent dated 22.09.2009 is modified accordingly. The writ petition is accordingly disposed of as above, after hearing the learned counsel for the petitioner and the learned Special Government Pleader for Commercial Taxes Sri Balaji Varma. No costs. ______________________ GODA RAGHURAM, J ________________________ RAMESH RANGANATHAN, J 30th October 2009 GRR/PVSN