Andhra HC (Pre-Telangana)
Madhava Hi-Tech Cold Storage (P) ... vs Assistant Commercial Tax Officer ... on 1 April, 2002
Equivalent citations: [2002]127STC469(AP)
Author: G. Rohini
Bench: G. Rohini
JUDGMENT Motilal B. Naik, J.
1. The petitioner seeks a writ of certiorari declaring the proceedings of the first respondent, dated February 8, 2002 in G.I. No.7206/2000-2001 as illegal, arbitrary, unjust and seeks appropriate orders, which are deemed to be fit and proper in the circumstances of the case.
2. The petitioner is a registered dealer under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 and also under the provisions of the Central Sales Tax Act, 1956. According to the petitioner, it constructed a cold storage in Vijayawada for which purpose it was required to purchase cooling systems, refrigeration and plant and machinery to install the storage plant for maintaining and preserving the required temperatures for storage of various commodities such as foods, chillies, tamarind, fruits, etc. While so, the first respondent, on the basis of the application filed by the petitioner, had issued a registration certificate under the provisions of the Central Act on November 8, 2000 and in the said registration certificate, the first respondent in his own handwriting, made an endorsement to the effect that the petitioner, by virtue of the certificate, was entitled to purchase plant and machinery for installation in the cold storage for its own use.
3. According to the petitioner, the petitioner was under the impression that it is lawfully entitled to purchase plant and machinery at concessional rates of tax against issue of "C" declaration forms during the course of inter-State trade or commerce, and accordingly the petitioner placed the orders with the suppliers in other States, viz., Maharashtra and Tamil Nadu, for supply of plant and machinery, on which basis supplies were received.
4. While so, the registering authority was of the view that the "C" forms issued to the petitioner were misused and on such basis the first respondent imposed penalty to the tune of Rs. 12,29,544. Before proposing to levy penalty, a show cause notice dated January 25, 2002 was issued to the petitioner, and a reply, dated February 5, 2002 was sent by the petitioner and the final order was passed on February 8, 2002 imposing penalty of Rs. 12,29,544. It is this order, which is assailed in the present writ petition, on various grounds.
5. Sri Murthy, learned counsel for the petitioner, submits that as provided under Section 10A of the Central Sales Tax Act, 1956, when an appropriate authority proposes to impose penalty on any person, who is found guilty of an offence under clause (b) or clause (c) or clause (d) of Section 10, such authority shall give an opportunity of being heard to that person so that he could have placed all the relevant material before the appropriate authority before imposing penalty. The learned counsel states that though a reply dated February 5, 2002 has been filed by the petitioner, there was no occasion for the petitioner to place all the relevant material before the appropriate authority to explain the position and therefore, the order passed by the first respondent imposing penalty is violative of the provisions of Section 10A of the Central Sales Tax Act, 1956 and on this ground alone, the matter has to be remitted to the registering authority setting aside the order impugned.
6. On the contrary, the learned Special Government Pleader for Taxes appearing on behalf of the respondents, submits that there is no violations of any principles of natural justice nor any provisions under Section 10-A of the Central Sales Tax Act, 1956. He further submits that the first respondent, before proposing to impose penalty, has issued a show cause notice dated January 25, 2002 to the petitioner calling upon the petitioner to submit objections and accordingly, the petitioner filed objections, dated February 5, 2002, and the first respondent, having not satisfied with the objections filed by the petitioner, passed the order impugned, dated February 8, 2002 imposing penalty of Rs. 12,29,544 and therefore, the contentions raised by the learned counsel for the petitioner are untenable.
7. In the light of the rival submissions made by both the learned counsel, the issue, that arises for our consideration is, whether there is any violation of the provisions contemplated under Section 10A of the Central Sales Tax Act, 1956.
8. Section 10A of the Central Sales Tax Act, 1956 reads as under:
"S.10-A, Imposition of penalty in lieu of prosecution.--(1) If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of Section 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one-and-a-half times the tax which would have been levied under Sub-section (2) of Section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section."
9. A reading of the above section gives us an impression that mere filing a representation or reply is not sufficient. This section further imposes an obligation on the authority to give a reasonable opportunity of being heard to the other side. The language used in Sub-section (1) of Section 10-A of the Act, particularly the words "after giving him a reasonable opportunity of being heard" impose an obligation on the authority to give an opportunity of being heard to the other side, so that the other side would be in a better position to place all the relevant material, though a reply has been filed. In view of the legislation imposing obligation on the authority exercising jurisdiction under Section 10-A(1) of the Central Sales Tax Act 1956, we are of the view that the submission made on behalf of the respondents is untenable and on that ground, we set aside the order impugned and remit the matter to the registering authority, who impose penalty of more than Rs. 12 lakhs exercising powers under Section 10-A(1) of the Central Sales Tax Act, 1956. The petitioner is entitled to place all the relevant material and decisions of the courts in support of its claim before the authority. The authority, after giving a reasonable opportunity of being heard to the petitioner, shall take appropriate decision. We also make it clear that the petitioner need not wait for any further notice from the appropriate authority. The petitioner shall appear before the appropriate authority, who has passed the order impugned, on April 15, 2002 around 10.30 a.m. and place all the relevant material and then, the authority shall decide the matter according to law on merits, after affording a reasonable opportunity of being heard, to the petitioner.
10. The writ petition is accordingly allowd. No costs.