1983 (11) TMI 266 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the Deputy Commissioner of Commercial Taxes permitted the petitioners to pay sales tax in instalments under section 16(2) of the Andhra Pradesh General Sales Tax Act.
2. Whether the Deputy Commissioner can withdraw the instalment facility without issuing notice to the parties.
3. Validity of the Government's instructions to withdraw the instalment facility.
4. Jurisdiction of the Government to interfere with the Deputy Commissioner's order.
5. Whether the court should exercise its jurisdiction under article 226 of the Constitution in favor of the petitioners.

Issue-Wise Detailed Analysis:

1. Permitting Instalments under Section 16(2):
The main question was whether the Deputy Commissioner of Commercial Taxes permitted the petitioners to pay the sales tax assessed in instalments under section 16(2) of the Andhra Pradesh General Sales Tax Act. The petitioners, commission agents dealing in jaggery, faced financial difficulties and requested to pay sales tax in instalments. The Government, through a memorandum, requested the Commissioner of Commercial Taxes to allow the petitioners to pay the arrears in six half-yearly instalments. The Commissioner forwarded this to the Deputy Commissioner, who instructed the Commercial Tax Officer to realize the arrears in instalments. The court held that the Deputy Commissioner's communication dated 3rd August 1982 constituted an order under section 16(2), as it permitted payment of tax in instalments and was acted upon by the tax authorities.

2. Withdrawal of Instalment Facility without Notice:
The court noted that the Deputy Commissioner's order under section 16(2) vested a right in the assessee to pay the tax in instalments. Such an order cannot be varied or set aside without notice to the affected parties. The Commercial Tax Officer's notice to pay the entire arrears in lump sum without issuing any prior notice to the petitioners was deemed illegal and without jurisdiction.

3. Validity of Government's Instructions:
The Government's counter-affidavit stated that the grant of instalments raised public controversy and was discussed in the Legislative Assembly. The Government, realizing it had no power under the Act to grant or withdraw instalments, issued instructions to withdraw the facility. The court found these instructions to be without jurisdiction and illegal, as the Government admitted it had no authority to interfere with the Deputy Commissioner's order under section 16(2).

4. Jurisdiction of the Government to Interfere:
The court emphasized that the Deputy Commissioner, being the competent authority, had jurisdiction to permit payment in instalments. The Government's instructions to collect the arrears in lump sum were not envisaged by any provisions of the Act and could not override the Deputy Commissioner's order. The court cited the Supreme Court judgment in Purtabpur Co. Ltd. v. Cane Commissioner, Bihar, to support its view that statutory powers must be exercised by the designated authority without interference from the Government.

5. Exercise of Jurisdiction under Article 226:
The court rejected the argument that it should not exercise its jurisdiction under article 226 because the petitioners had collected sales tax from purchasers. It held that the order under section 16(2) was a quasi-judicial order and must be honored by all authorities. The court's duty was to ensure compliance with the order, and no authority other than the one vested with jurisdiction could direct its subordinates to ignore the order and collect the tax in lump sum.

Conclusion:
The court restrained the respondents from collecting the arrears of sales tax in lump sum and directed them to realize the arrears in instalments as ordered by the Deputy Commissioner on 3rd August 1982. The writ petitions were allowed to this extent, with no order as to costs. The request for leave to appeal to the Supreme Court was refused, as the court did not find any substantial questions of law of general importance.

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