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2016 (6) TMI 1109 - ANDHRA PRADESH HIGH COURT

2016 (6) TMI 1109 - ANDHRA PRADESH HIGH COURT - TMI - Validity of recovery notice - period of limitation - maintainability of writ petition - notice towards arrears of Sales Tax due from him for the assessment years 1996-97 and 1999-00 was issued after a lapse of more than 2 decades - The petitioner came to know about rejection of the Appeal vide order dated 06.01.2004 only on receipt of statutory notice. - Held that:- No doubt service of notice under Rule 58 is mandatory but when the Appeal .....

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e 58, which is the subject matter for decision by the Appellate Tribunal. Therefore, we find that no discretion can be exercised under Article 226 to declare that the orders passed by the 3rd respondent are illegal and arbitrary. - writ petition dismissed - Decided against the petitioner. - WRIT PETITION No.20743 OF 2015 - Dated:- 26-11-2015 - SRI RAMESH RANGANATHAN AND SRI M. SATYANARAYANA MURTHY, JJ. FOR THE PETITIONER : LAKSHMAN FOR THE RESPONDENT : GP FOR COMMERCIAL TAX (TG) WRIT PETITION No .....

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APGST Act ). The petitioner is a partnership firm carrying on the business of manufacturing cement having its unit at Bibinagar mandal in Nalgonda district. In pursuance of introduction of a New Comprehensive Scheme of State Incentives Scheme, 1992 (NCSSI, 1992) vide G.O.Ms. No.117, Inds. & Com. (IFR) Department dated 17.03.1993, the petitioner applied for tax exemption and, accordingly, the Commissioner of Industries, Hyderabad vide his proceedings in File No.10/3/5/2692 dated 22.12.1995 fi .....

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ment order on the petitioner; while passing the said assessment order, the 4th respondent did not follow the procedure laid down under the APGST Act; therefore, the impugned order is illegal and arbitrary. As the 4th respondent did not consider the exemption certificate issued by the Commissioner of Industries and the order was not served on petitioner by the 4th respondent, the petitioner only came to know about passing of the order on receipt of demand notice dated 20.02.2001 on 15.03.2001, th .....

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for the assessment years 1996-97 and 1999-00. As the said notice was issued after a lapse of more than 2 decades, the demand is hopelessly barred by limitation; there was no reference in the said notice about rejection of the Appeal but keeping the petitioner totally in dark and ignoring the exemption granted by Commissioner of Industries, passed the impugned order arbitrarily. The petitioner came to know about rejection of the Appeal vide order dated 06.01.2004 only on receipt of statutory not .....

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ng different grounds. Thus, the 3rd respondent passed an order dismissing the Revision declining to grant stay of recovery of tax, demanded in statutory notice. It is specifically contended that the 3rd respondent did not follow the procedure prescribed under Rule 58 of Rules framed under the APGST Rules for serving notice and orders passed by them and, therefore, failure to file a Revision within time before the ADC, Hyderabad and Revision against the order passed by the ADC, Hyderabad before t .....

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he writ petitioner mainly contended that since the 3rd respondent and ADC, Hyderabad passed orders without following necessary procedure prescribed under Rule 58 of the APGST Rules, the said orders are illegal and arbitrary; apart from that, the 3rd respondent also did not consider the background of the case and erroneously dismissed the same, drawn the attention of this Court to a decisions of this Court in Sri Balaji Food, Kakinada Vs. The State Level Committee, Government of Andhra Pradesh an .....

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f Industries, Hyderabad dated 22.12.1995, he is under obligation to file sales tax returns for every assessment year but as per the orders passed by the 4th respondent dated 24.02.2000, the petitioner did not file returns but submitted only monthly turnover returns in Form-A2 (from 4/96 to 11/96 and 12/96 to 3/97); A2s not filed disclosing the gross turnovers, exempted turnover and net turnover. A notice in Form-IX was issued to the petitioner on 23.05.1998 and 02.09.1998 asking to submit the bo .....

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h respondent, the petitioner did not respond to the demand made by the 4th respondent and did not submit the books of accounts; though copy of the assessment order was marked to the petitioner, the petitioner neither complied the demand notice nor filed any Appeal within the time stipulated; however, filed Appeal in Form-I under Section 19 of the APGST Act before the ADC, Hyderabad on 29.05.2001 raising several contentions, the said Appeal was rejected as the petitioner did not comply the object .....

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g before the Tribunal. Therefore, the legality and validity of the orders passed by the 4th respondent and ADC, Hyderabad need not be gone into by this Court while deciding the present writ petition. Rule 58 of the APGST Rules deals with service on a dealer of any notice, summons, order or proceedings under the Act or under these rules and a specific procedure for service of notices etc., is contemplated under Rule 58, which reads as follows: (a) by giving or tendering it to such dealer or his m .....

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ntage of various modes of service of notices, summons, order of proceedings, Sri K. Lakshman, learned counsel for the petitioner, contended that due to non-service of notices, check memos and orders passed by the 4th respondent and ADC, Hyderabad the petitioner could not pursue the proceedings. No doubt, a specific procedure is contemplated under Rule 58 of the APGST Rules for serving of notices, summons, orders etc., on dealer but Rule 33(1) of APGST Rules prescribed the procedure for filing Ap .....

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; every such appeal shall accompany a declaration in Form-I(A) stating that the tax admitted to be due, or of such instalments as have been granted, have been paid for the relevant assessment year, in respect of which the Appeal is preferred along with the proof of such payments. In case where the levy of tax, surcharge or penalty is disputed, a fee calculated at the rate of two percent of the disputed tax or penalty subject to a minimum of ₹ 50/- and a maximum of ₹ 1,000/- and in al .....

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ner in rejection of Appeal by the ADC, Hyderabad on the ground that the original order served on the petitioner was not annexed to the grounds of Appeal is illegal; legality of the rejection of the Appeal by the ADC, Hyderabad cannot be gone into in the present writ petition as it is only questioning the order passed by the 3rd respondent rejecting stay during pendency of the Appeal. The 3rd respondent passed the impugned order on 04.04.2015 on the ground that the petitioner did not seek stay of .....

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ing to it, the appellate authority may, on an application filed by the appellant order stay of collection of the tax subject to furnishing of such security or on payment of such part of the disputed tax within such time as may be specified. Thus, power to grant stay of collection was conferred on the Appellate Deputy Commissioner only on an application filed by the appellant. In the present dispute, the petitioner filed an Appeal in Form-I on 29th May, 2001 before the Appellate Deputy Commission .....

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of disputed tax but the ADC, Hyderabad rejected the Appeal itself for non-compliance of the objections. When no stay was claimed before the ADC, Hyderabad by the petitioner under Section 19(2-A) of the APGST Act either in the Appeal itself or by filing a separate application, the question of challenging the order passed by the Appellate Deputy Commissioner before the 3rd respondent does not arise. Section 19(2-B) of the APGST Act provides a Revision against an order passed by the appellate autho .....

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er Section 19(2-A) of the APGST Act, no Revision lies; consequently, the 3rd respondent declined to grant stay of collection of disputed tax by exercising power under 19(2-B) of the APGST Act, such order cannot be found fault. Even a perusal of entire record, it discloses that the petitioner though filed an Appeal before the ADC, Hyderabad did not seek stay of collection of tax either in the Appeal or by filing a separate application as required under Section 19(2-A) of the APGST Act and, in suc .....

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the beginning, the petitioner though submitted monthly turnover returns to the 4th respondent, he did not file sales-tax returns and not responded to the notices issued by the 4th respondent calling upon the petitioner to produce books of accounts for audit to fix the tax liability; thereupon, the 4th respondent having no other alternative, passed a best judgment assessment, marked a copy of the order to the petitioner. The petitioner slept for a considerable period but only on receiving demand .....

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ellate Deputy Commissioner to register the same as Appeal filed Form I-A. The said rejection order was marked to the petitioner but the petitioner slept over for a decade only on receipt of statutory notice dated 13.01.2015, filed an Appeal before the Tribunal and Revision before the 3rd respondent for stay of collection of tax during pendency of the Appeal. The conduct of the petitioner from the beginning is blameworthy since he did not respond to any of the notices from 1999 onwards. Learned c .....

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ed un-communicated. Similarly, in Srikanth Trading Company3, scope of Rule 58 of APGST Rules came up for consideration and this Court in Para 9 therein held that service of notice on persons as contemplated under Rule 58 is entirely different from appearance of the persons under Section 35 of the APGST Act. Merely because the chartered accountant is entitled to appear in the proceedings before the authorities under Section 35 of the APGST Act, it cannot be held that the chartered account is an a .....

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ons, order or proceedings under the Act or under the Rules may be effected by giving or tendering it to such dealer or his manager or agent; or when such dealer or his manager or agent is not found by leaving it at his last known place of business or residence or by giving or tendering it to adult member of his family; or if the address of such dealer is known to the assessing authority, by sending it to him by registered post and if it is returned un-served, it shall be put on notice board of t .....

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ing against the order passed by the Appellate Deputy Commissioner before the Tribunal, the validity of the orders passed by the 4th respondent and Appellate Deputy Commissioner cannot be gone into at this stage and, at best, the law laid down by the Courts in the above decisions are helpful to the petitioner in the pending Appeal before Tribunal but not in the present case. However, the power of review under Article 226 is purely discretionary and the court may exercise such power when the order .....

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