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TMI Blog2017 (4) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondents. Factual background: The State of Andhra Pradesh enacted the Andhra Pradesh Tax on Luxuries Act, 1987, purportedly with a view to mobilise additional resources, by imposing a tax on luxuries in Hotels and Lodging Houses. The Act came into force on June 15, 1987. It was enacted by virtue of the powers conferred under entry 62 of List II of the Seventh Schedule to the Constitution of India. In A. B. Abdulkadir v. State of Kerala, AIR 1976 SC 182, the Supreme Court upheld a levy on tobacco, on the ground that tobacco products have a deleterious effect upon health. Taking clue from the said decision, the State of Andhra Pradesh introduced an Amendment Act 9 of 1997 with effect from August 1,1996. By the said Amendment Act, section 6(1A) was inserted, providing for levy and collection of tax on the turnover of receipts of a tobacconist, relating to the supply of luxuries. Section 4A was inserted mandating registration of every tobacconist. Several writ petitions were filed on the file of this court, challenging the Amendment Act. The petitioner herein also filed a writ petition in W. P. No. 16913 of 1996. But a Bench of this court dismissed all the writ petitions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t luxury tax from their customers. Contending that the writ petitioner violated the judgment of the Constitution Bench, by not remitting the luxury tax allegedly collected by them during the pendency of the SLPs, the Commercial Tax Officer moved a Contempt Petition in C. C. No. 41 of 2006. After notice was ordered in the contempt petition, the petitioner took a stand that they never collected luxury tax from their customers. Therefore, the Supreme Court appointed a firm of chartered accountants by name M/s. Laxminiwas Neeth & Co., for verification of the relevant records. The relevant portion of the order of the Supreme Court passed on November 9, 2012 in the Contempt Petition reads as follows: "4. In order to verify the correctness of the above allegation of the State of Andhra Pradesh, we hereby appoint the following chartered accounts, for each of the three companies to undertake the task set out herein: (I) M/s. ITC Ltd.-M/s. Anandam and Co. (II) M/s. G. O. I. Ltd.-Chartered Accountants Sardar Patel Road, Secunderabad. (III) M/s. VST Ind. Ltd.-M/s. Laxminiwas Neeth & Co., Chartered Accountants, Basheer Bagh, Hyderabad. 5. The aforesaid chartered accountants will comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain contentions raised in these proceedings apart from maintainability. They are also at liberty to place reliance on the report of the auditors/chartered accountants. After receipt of the reply to the said show-cause notice, the petitioners will consider the same and pass appropriate orders in accordance with law after affording opportunity of hearing to the respondents. If, for any reason, the respondents are aggrieved by the orders that may be passed by the petitioners, they are at liberty to question the same before an appropriate forum. 10. Pursuant to the directions issued by this court dated November 9, 2012, the respondents have deposited a sum of Rs. 10 lakhs each before the Registry of this court towards the professional fee/ charges of the auditors/chartered accountants. In view of the disposal of these 'contempt petitions, the said amount, along with accrued interest, be disbursed to the auditors/chartered accountants within a month's time from today by preparing appropriate demand drafts." Pursuant to the said order, the Commercial Tax Officer, Musheerabad Circle issued a show-cause notice dated October 14, 2014 and the petitioner-submitted an interim r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the statutory alternative remedy of appeal, primarily on two grounds namely: (a) that the first respondent does not have jurisdiction; and (b) that order impugned in the writ petition does not fall either under section 7 or under section 8 or under section 9, to enable the petitioner to file an appeal under section 11(1) of the Act. Inherent lack of jurisdiction: The issue of inherent lack of jurisdiction is raised on account of the fact that the State was bifurcated under the Andhra Pradesh Reorganisation Act, 2014, which came into effect on June 2, 2014. When the original challenge to the provisions of sections 3A and 4A of the A. P. Tax on Luxuries Act, 1987 was made, the State was a combined State. Even at the time when the Constitution Bench of the Supreme Court held the provisions of the Act to be unconstitutional, on January 20, 2005, the State was a combined State. This is why the contempt petitions were filed only by the concerned assessing officers of the combined State of A. P. in the year 2006. But even by the time when the contempt petitions were disposed of by the Supreme Court by order dated February 6, 2014, the State was united. After about 4 months of the di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y tax ceases from the date on which a demand is made. But the amount collected by the assessee from its customers under the label "luxury tax" would continue to retain its label. Section 104 of the A. P. Reorganisation Act is nothing but a provision similar to the provisions of the Companies Act, 1956, dealing with schemes of amalgamation, rearrangement and merger, etc. Just as a new entity after amalgamation succeeds to the rights and liabilities of the previous entity the successor State is made by section 104 of the Reorganisation Act to get substituted as a party to the proceedings. In simple terms what happens under section 104 is similar to an amendment of cause title or an amendment of a decree. Therefore, it cannot be contended that after the bifurcation, the assessing officer of the State of Telangana would not have jurisdiction to proceed in respect of something initiated by an officer of the combined State of Andhra Pradesh. Limitation: It is contended by the learned senior counsel for the petitioner that the period in issue is from August 1, 1999 to January 19, 2015 and that a demand in respect of the said period cannot be created for the first time in the year 2017, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate authority under section 11(1) of the Act. The second aspect is that what is sought to be by the respondents is only to recover the tax allegedly collected by the petitioner from its customers. If a dealer or assessee not liable to pay tax, collects the amount of tax from his customers under a wrong impression, he is bound either to refund it to the customers or to remit it to the Government. Otherwise the collection of tax by the assessee or dealer from his own customer would be without the authority of law. The liberty granted by the Supreme Court should be seen in the context of the principle of unjust enrichment. Therefore, the order impugned in the writ petition should be deemed to be one passed under section 7. Hence, the remedy under section 11(1) is certainly available. Another interesting argument raised by the learned senior counsel for the petitioner is that once section 3A of the A. P. Tax on Luxuries Act 1987 has been struck down as unconstitutional the Act itself does not apply to the petitioner. If the Act does not apply to a person, the remedies provided under the Act cannot also be availed by them. But the above argument is misconceived. The Act in entiret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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