IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE SIXTH DAY OF AUGUST TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 16557 of 2008 Between: M/s.Himalaya Cold Storage,Punganur ,Chittoor District Andhra Pradesh, rep.by its Managing partner Sri Mohideen Najeeb Damodi ..... PETITIONER AND The Commercial Tax officer,Madanapalle circle NRK Street, CTM Road,Madanapalle, Chittoor District, AP .....RESPONDENT 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 an appropriate writ order or direction more particularly in the nature of mandamus declaring the action of the respondent in levying tax on the petitioner vide his Assessment order dated 25.3.2008 in his proceedings 'Assessment of Value Added Tax ' in Form VAT 305 in TIN/Rc.No.A2/441/2006 on the transaction of storage of goods of ryots/traders in its cold Storage Unit by collecting hire charges for the Assessment year 2005-06 and 2006-07 under the AP Valued Added Tax Act 2005 as illegal, and without jurisdiction and without giving reasonable opportunity to the petitioner in violation of the principles of natural justice and pass Counsel for the Petitioner:MR.G.NARENDRA CHETTY Counsel for the Respondents .: SRI RAJI REDDY, SPECIAL STANDING COUNSEL FOR COMMERCIAL TAX The Court made the following : HON'BLE SMT. JUSTICE T.MEENA KUMARI & HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 16557 of 2008 ORDER: ( Per the Honourable Smt.Justice T.Meenakumari) The present writ petition is filed by the petitioner seeking to declare the action of the Respondent in levying tax on the Petitioner vide his Assessment Order dt.25.03.2008 on the transaction of storage of goods of ryots/traders in its Cold Storage Unit by collecting hire charges, for the Assessment year 2005- 2006 & 2006-2007 under APVAT Act, as illegal and without jurisdiction and without giving opportunity to the petitioner, violating the principles of natural justice. The main grievance of the petitioner is that it is a Cold Storage unit and it stores commodities such as Seed Tamarind, Flower Tamarind and Mango Pulp that are brought by ryots or any other person for the purpose of preserving them and for such storage, the petitioner collects hire charges from the ryots. Since the petitioner is neither the owner of the goods nor a seller nor a purchaser and, no transfer of property takes place, the petitioner is not liable to pay the sales tax on the value of the goods kept in storage unit. Though the petitioner filed its objections to the show cause notice dated 15.12.2006 issued by the respondent, but surprisingly, the respondent passed the impugned order, in which it is observed that though the dealers received the endorsement on 27.2.2008, under which, they are required to produce their books of accounts i.e., stock register, copies of Form 515, Register in Form 520 as prescribed under APVAT Act, they failed to produce any of the records in original for verification by the authorities and hence, they can be treated as purchasers. Challenging the same, the present writ petition has been filed. Heard the learned Counsel for the petitioner and the learned Standing Counsel for Commercial Tax and perused the material available on record. The learned Counsel for the petitioner contended that a transaction of storage of goods by the owner in the cold storage unit of the petitioner by paying hire charges for utilizing the storage facility does not fall within the definition of sale and therefore, the petitioner is not liable to pay any tax over those goods and apart from that, the impugned order was passed before expiry of the period that was granted to the petitioner to produce the books of accounts and therefore, it amounts to depriving the right of the petitioner to defend the case in a proper perspective and also in violation of the principles of natural justice. On the other hand, the learned Standing Counsel contended that in spite of receipt of the endorsement for production of records, the petitioner failed to produce the records and therefore, the contention of the learned Counsel for the petitioner that no opportunity was given to the petitioner to produce the records is not tenable and that the authorities passed the order impugned by arriving at a right conclusion. On a perusal of the material available on record, it is apparent that that the endorsement dated 15.2.2008 was received by the petitioner on 27.2.2008, according to which, the petitioner has to file the documents, within three days thereafter viz., on or before 2.3.2008. Therefore, it can easily be inferred that the action of the authorities in granting time to file the documents required, amounts to violation of the principles of natural justice. Apart from that, issue involved, in a case of this nature, shall be adjudicated on its own merits, but not on mere technicalities in order to avoid multiplicity of proceedings of this nature, so as to put a quietus to the litigation. In the above circumstances of the case, We feel it a fit case wherein an opportunity can be afforded to the petitioner to produce records required for verification and thereby, the matter can be remanded for fresh consideration. Accordingly, the petitioner is directed to produce the records before the respondent and also to pay 12.5% of the tax due of each assessment year, within a period of six weeks from today. On production of such records and payment as stipulated above, the respondent shall reconsider the matter and pass orders afresh in accordance with law, on or before 30th September, 2008. It is also made clear that the petitioner shall cooperate with the authorities. It is needless to observe that in default of stipulated payment of tax and production of records, the order impugned shall become operative. Subject to the above direction, the writ petition is disposed of. No order as to costs. _______________________ Justice T.Meenakumari ____________________________ Justice Ramesh Ranganatham Dated: 06.08.2008 Nn/gurc. HON'BLE SMT. JUSTICE T.MEENA KUMARI & HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 16557 of 2008 (ORDER of the Division Bench delivered by the Honourable Smt.Justice T.Meenakumari) 6TH August, 2008