TMI Blog2017 (4) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to the date January 19, 2005 or January 20, 2005. Availability of appellate remedy - section 11(1) of the A. P. Tax on Luxuries Act, 1987 - Held that: - while keeping the writ petition pending, the petitioner could be directed to avail the alternative remedy of an appeal under section 11(1) of the Act. After all the petitioner may be obliged only to make a pre-deposit of two per cent of the tax, under section 11(2) to maintain an appeal. Petition disposed off. - W. P. M. P. No. 10171 of 2017, W. P. No. 8240 of 2017 - - - Dated:- 18-4-2017 - RAMASUBRAMANIAN V. AND MS. UMA DEVI J. JJ. CH Pushy am Kiran for the petitioner. T. Vinod Kumar, Special Standing Counsel for Commercial Tax (TG) , for the respondents. ORDER Challenging an order passed by the Commercial Tax Officer, Musheerabad Circle, Hyderabad, directing the petitioner to pay a sum of ₹ 34,86,38,272/- towards luxury tax allegedly collected by the petitioner during the period from 1999-2000 up to January 19, 2015, the petitioner has come up with the above writ petition. Pending disposal of the writ petition, the petitioner seeks, in this miscellaneous petition, an interim s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their customers, after obtaining interim orders from the Supreme Court, they were obliged to remit the same to the Government and not retain the same. Paragraphs 92 and 93 of the judgment of the Constitution Bench are reproduced for easy appreciation as follows (paras 97 and 98, page 576 in 139 STC): 92. It was stated on behalf of the State Governments that after obtaining interim orders from this court against recovery of luxury tax, the appellants continued to charge such tax from consumers/customers. It is alleged that they did not pay such tax to respective State Governments. It was, therefore, submitted that if the appellants are allowed to retain the amounts collected by them towards luxury tax from consumers, it would amount to 'unjust enrichment' by them. 93. In our opinion, the submission is well founded and deserves to be upheld. If the appellants have collected any amount towards luxury tax from consumers/customers after obtaining interim orders from this Court, they will pay the said amounts to the respective State Governments. After the decision of the Constitution Bench, the Commercial Tax Officer, Musheerabad Circle, Hyderabad issued a communica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously disputed by the State Government, the Supreme Court passed final orders in the contempt petition on February 6, 2014. The operative portion of the order of the Supreme Court dated February 6, 2014 in the contempt petition reads as follows: 7. In the report filed by the auditors/chartered accountants a clean chit is given to the contemnors/respondents. However, the petitioners dispute the report of the auditors/chartered accountants. In the matters of this nature, in our opinion, it may not be appropriate for us to initiate any proceedings, much less proceedings under contempt against the respondents. In that view of the matter, we decline to grant the relief sought for by the petitioners in these contempt petitions. The contempt petitions are disposed of accordingly. 8. However, we permit the petitioners to issue appropriate show-cause notice(s) to the respondents, inter alia, bringing to their notice that the respondents, after obtaining interim orders from this court, have collected luxury tax from consumers/customers, but have not paid the same to the State Government. We make it clear that in the show-cause notice the petitioners will furnish all the particulars av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 104 of the A. P. Reorganisation Act, 2014 would have no application since no issue was pending under the A. P. Tax on Luxuries Act, 1987 on the date of bifurcation; (4) that inasmuch as the levy has been struck down by the Supreme Court as unconstitutional, the quantification under the Act can never be made and the liberty granted by the Supreme Court cannot be construed as one conferring a right to act against the law. (5) that the impugned proceedings are hopelessly barred by limitation; (6) that the only liberty granted by the Supreme Court in the contempt petition is to proceed if there are materials other than those that were available before the Supreme Court, including the reports of the chartered accountants; and (7) that without there being a quantification of tax or an assessment, there cannot be a demand. In response to the above, it is submitted by Mr. T. Vinod Kumar, learned special standing counsel for the respondents that what is sought to be recovered is only the tax that was collected by the writ petitioner from its customers; that the recovery is on the principle of unjust enrichment and it is sought to be made on the strength of the liberty gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -Where, immediately before the appointed day, the existing State of Andhra Pradesh is a party to any legal proceedings with respect to any property, rights or liabilities subject to apportionment between the State of Andhra Pradesh and Telangana under this Act, the State of Andhra Pradesh or the State of Telangana which succeeds to, or acquires a share in, that property or those rights or liabilities by virtue of any provision of this Act shall be deemed to be substituted for the existing State of Andhra Pradesh or added as a party to those proceedings, and the proceedings may continue accordingly. The contention of the learned senior counsel for the petitioner is that there is neither any arrear of tax so as to attract section 50 nor is there any legal proceeding so as to attract section 104. But both the above contentions appear to be prima facie erroneous. If the petitioner had in fact collected, during the pendency of the challenge to the constitutional validity of the Act, from its customers any amount towards luxury tax, the amount will not lose its character as luxury tax merely because the Act was held to be unconstitutional in respect of tobacconist. It is needless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary, 2014. We are bound by the order of the Supreme Court just as the petitioner is also. Therefore, the starting point for the period of limitation will only be February 6, 2014, the date of the order of the Supreme Court, unless otherwise the honourable Supreme Court takes a different view to it. Appellate remedy not available: The contention of the petitioner is that section 11(1) of the A. P. Tax on Luxuries Act, 1987 provides for a remedy of appeal only as against an order of assessment made under section 7 or section 8 or against an order of penalty under section 9. The impugned order according to the petitioner is neither an order of assessment under section 7 or section 8 nor an order of penalty under section 9. Therefore, no appeal would lie under section 11(1) of the Act, according to the petitioner, as against the impugned order. The contention of the learned senior counsel is that the Commercial Tax Officer, by his order, cannot create a remedy of appeal, as a remedy of appeal is to be conferred by statute. But the above contention loses sight of two important aspects. The first is that section 7 of the Act not only speaks on assessment but also speaks on col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court struck down the relevant provision is unconstitutional, the entitlement of the assessee to prosecute the appeal and get a verdict would not automatically go. The principles underlying section 6 of the General Clauses Act may have to be invoked in such cases. Therefore, we are of the considered view that the petitioner could still avail the alternative remedy of appeal. The reason why we think so is that there are factual disputes with reference to the allegations of collection of luxury tax by the petitioner from its customers. These factual disputes cannot be decided in a writ petition under article 226 of the Constitution. But at the same time, we are unable to throw the writ petition out on the ground of availability of alternative remedy, since the issues raised in the writ petition lie somewhere in the twilight zone. Therefore, we are of the considered view that while keeping the writ petition pending, the petitioner could be directed to avail the alternative remedy of an appeal under section 11(1) of the Act. After all the petitioner may be obliged only to make a pre-deposit of two per cent of the tax, under section 11(2) to maintain an appeal. Thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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