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TMI Blog2017 (4) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... ing counsel takes notice for the respondents. Factual background: 3. 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 15-06-1987. It was enacted by virtue of the powers conferred under Entry 62 of List II of the VII Schedule to the Constitution of India. 4. 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 under Act 9 of 1997 with effect from 0108-1996. 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 4-A was inserted mandating registration of every tobacconist. 5. Several writ petitions were filed on the file of this Court, challenging the Amendment Act. The petitioner herein also filed a writ petition. 6. But a Bench of this Court dismissed all the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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.39 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. M. Anandam & Co., for verification of the relevant records. The relevant portion of the order of the Supreme Court passed on 09-11-2012 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 complete the verification from the relevant records and submit their report before this Court with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 09-11-2012, 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." 12. Pursuant to the said order, the Commercial Tax Officer, Khairtabad Circle issued a show cause notice dated 03-09-2014. The petitioner submitted an interim reply on 17-09-2014. The Commercial Tax Officer granted personal hearing in December, 2016 and February, 2017 and thereafter passed an order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he writ petition does not fall either under Section 7 or under Section 8 or under Section 9, so as to enable the petitioner to file an appeal under Section 11 (1) of the Act. 16. 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. 17. 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 of collection of tax, as the caption to Section 7 indicates. Section 7 (4) of the Act, provides a mechanism for the collection of tax. Therefore, the impugned order, if not an assessment, would at least f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The principles underlying Section 6 of the General Clauses Act may have to be invoked in such cases. 22. 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. Inherent lack of jurisdiction: 23. The next argument of the petitioner is that assuming that there is an alternative remedy available under the Act, it is not always a bar for invoking the writ jurisdiction of this court, whenever the Assessing officer suffered from inherent lack of jurisdiction to pass the order off assessment. 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 02-06-2014. When the original challenge to the provisions of Sections 3-A and 4-A of the A.P. Tax on Luxuries Act, 1987 was made, the State was a combined State. Even at the time when the Constitution Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 to point out that any Act of Parliament or Legislature is presumed to be valid until it is held by a Court to be ultra vires. Therefore, any amount collected pending a challenge to the Act, will partake the character of tax under the Act. Once the Act is declared as unconstitutional, the liability to pay 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. 28. 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 contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Authority to condone the delay without any limitation. 34. Therefore, the miscellaneous petition is disposed of, directing the petitioner, without prejudice to their contentions in the writ petition, to avail the remedy of a statutory appeal under Section 11 (1) of the A.P. Tax on Luxuries Act, 1987 as against the impugned order, within two (2) weeks from the date of receipt of a copy of this order. If an appeal is so filed, the Appellate Authority may condone the delay, entertain the appeal subject to compliance with the prescriptions contained in Section 11 (2) and dispose it of in accordance with law, uninfluenced by any observation contained in this order. However, the filing of the appeal will not be taken to be an act on the part of the petitioner subjecting themselves to the jurisdiction of the authorities under the Act. The filing of the appeal will be without prejudice to the contentions of the petitioner in the main writ petition. Until a period of two weeks from the date of receipt of a copy of this order, the impugned demand shall not be enforced, so that the petitioner is able to file an appeal and also seek a stay before the Appellate Authority under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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