1996 (3) TMI 483 - HC - VAT and Sales Tax

Summary

Issues:
1. Arbitrary demands made by Commercial Tax Officer based on instructions from superior.
2. Failure to issue way bills despite payment by petitioner.
3. Dispute over the demand for tax and penalty on lost way bills.
4. Legal provisions regarding the issuance of way bills and security requirements.
5. Imposition of costs on respondents for unjustified demands.

Detailed Analysis:
1. The petitioner challenged arbitrary demands made by the Commercial Tax Officer, acting on instructions from the Deputy Commissioner (Commercial Taxes). The petitioner, a registered dealer under the A.P. General Sales Tax Act, complained about not receiving the full quota of way bills despite payment. The Commercial Tax Officer justified the demands based on loss of way bills and subsequent instructions for tax and penalty collection from the petitioner.

2. The petitioner applied for 100 way bills but only received 50 initially, with the promise of the remaining 50 after exhaustion. Subsequent requests for the remaining way bills were unmet, leading to the writ petition. The Commercial Tax Officer cited loss of way bills and instructions from the Deputy Commissioner as reasons for withholding the remaining way bills, demanding tax and penalty from the petitioner.

3. The main dispute revolved around the demand for tax and penalty on the lost way bills, amounting to Rs. 64,000, which the petitioner contested as lacking legal authority. The Court found that the demand was arbitrary and unauthorized, as there was no provision in the Act or Rules to support such imposition. The Court emphasized that tax collection must be in accordance with the law to prevent unauthorized impositions.

4. The judgment highlighted the legal provisions regarding the issuance of way bills and security requirements. Rule 45(4)(v) of the A.P. General Sales Tax Rules mandates notifying the loss of way bills and providing reasonable security through an indemnity bond. The Court noted the absence of a specific rule mentioned by the respondents, emphasizing that demands for security must be reasonable and based on established regulations.

5. In response to the unjustified demands and actions by the respondents, the Court imposed costs on them. Both respondents were directed to pay Rs. 500 each to the petitioner as a penalty within three weeks. The judgment concluded by instructing the Commissioner of Commercial Taxes to circulate the order to all relevant authorities for compliance and awareness.

This detailed analysis of the judgment from the Andhra Pradesh High Court addresses the issues raised by the petitioner regarding arbitrary demands, failure to issue way bills, legal provisions, and the imposition of costs on the respondents.