IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY SIXTH DAY OF MARCH TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE B.PRAKASH RAO and THE HON'BLE MR JUSTICE C.Y.SOMAYAJULU WRIT PETITION NO : 6372 of 2008 Between: M/s.ORIX Auto Business Solutions Limited, (Now Known as ORIX Auto Infrastructure Services Ltd) Flat No.302, Third Floor, Sapthagiri Towers Begumpet, Hyderabad, rep.by its Manager Sri Ganapath Nagesh Balgi ..... PETITIONER AND 1 The Commercial Tax officer, Begumpet circle Hyderabad 2 The Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad 3 The Manager, Syndicate Bank,Mumbai 4 The Manager, ING Vysya Bank Ltd.,, Nariman Point Mumbai 5 The Manager, Oriental Bank of Commerce, Rohtak , Haryana, 6 The Manager, Central Bank of India., Corporate Finance Branch, M.G.Road, Fort, Mumbai .....RESPONDENT(S) 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 or order or direction particularly one in the nature of writ of mandamus granting stay of collection of the disputed tax of Rs.48,19,188/- and penalty of Rs.63,20,705/- for the assessment year 2004-05 (APGST) , 2005-06 (APVAT) and 2006-07 (APVAT) respectively arising in pursuance of the assessment and penalty orders passed by the first respondent pending disposal of the appeals before the second respondent. Counsel for the Petitioner: MR.S.KRISHNA MURTHY Counsel for the Respondent Nos.1 and 2: Sri K.RAJI REDDY, SPECIAL STANDING COUNSEL FOR COMMERCIAL TAX The Court made the following : THE HON'BLE MR JUSTICE B.PRAKASH RAO AND THE HON'BLE MR JUSTICE C.Y.SOMAYAJULU WRIT PETITION No.6372 of 2008 ORDER: (Per Hon’ble Sri Justice B.Prakash Rao) Heard Sri S.Krishna Murthy, learned Counsel for the petitioner and Sri K.Raji Reddy, the learned Special Standing Counsel for Commercial Tax, who takes notice on behalf of the respondents 1and 2, and at their request, the main writ petition itself is taken up for disposal. 2. The petitioner who is the appellant before the 2nd respondent files this writ petition, inter alia seeking Writ of Mandamus granting stay of collection of the disputed tax and penalty, pending disposal of the appeal. 3. The learned Counsel appearing for the petitioner submits that having regard to the very nature of the transaction of taking on lease the vehicles, it would not attract any liability towards the sales tax. That apart, he submits that, the petitioner was already taxed under the provisions of the VAT Act and therefore, the question of paying sales tax again does not arise and the same cannot be sustained. He also sought to place reliance on a decision in BHARAT SANCHAR NIGAM LTD. AND ANOTHER v. UNION OF INDIA AND OTHERS[1]. 4. Learned Standing Counsel appearing on behalf of the respondents submits that there is absolutely no justification for granting stay nor there is any merit in the contentions urged on behalf of the petitioner. He further submits that in spite of the fact that the petitioner has paid VAT, still that transaction itself attracts the services liable for sales tax. Even otherwise, having regard to the explanation IV of Section 2(n), even the very nature of transaction falls well within the parameters. Therefore, the levy is perfectly justified. 5. Having heard the Counsel on either side and on perusal of the material, we are of the view that on the face of it, prima facie, the appeal involves substantial questions affecting substantial rights as to the very liability in regard to the Sales Tax vis-à-vis the provisions under the A.P. VAT Act. All these aspects necessarily have to be gone into in the appeal. When the appeal is pending, necessarily, the petitioner is entitled for stay pending disposal thereof. Hence, we are refraining from expressing any opinion on the several contentions urged on either side. We deem it more appropriate that having regard to the nature of questions involved which would go to the very root of the case itself, and especially taking into consideration the fact that the petitioner already paid tax towards VAT, there shall be stay till the disposal of the appeal. 6. Accordingly, this writ petition is disposed of granting stay pending disposal of the main appeal on the file of the 2nd respondent. The appeal shall be disposed of within a period of two months from the date of receipt of a copy of this order. It is needless to mention that the impugned garnishee notices shall stand suspended till the disposal of the appeal. __________________ B.PRAKASH RAO, J. __________________ C.Y.SOMAYAJULU, J. Date:26.03.2008. GS ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{TRK} [1] [2006] 145 STC 91