Andhra HC (Pre-Telangana)
Annam Jewellers vs Deputy Commercial Tax Officer And Anr. on 15 March, 1996
Equivalent citations: [1996]102STC506(AP)
JUDGMENT S. Parvatha Rao, J.
1. The petitioners in these two writ petitions are dealers registered under the Andhra Pradesh General Sales Tax Act, 1957 ("the APGST Act", for short). They question the action of the first respondent in these two writ petitions in collecting certain amounts towards tax and penalty of five times tax.
2. The petitioner in W.P. No. 28057 of 1995 is a proprietary concern engaged in the business of gold and silver articles. In the affidavit of its proprietor given in support of the writ petition, it is stated that it is maintaining books of account in accordance with law and that it has been filing monthly returns and paying taxes regularly. He states that on November 15, 1995, the first respondent in the writ petition inspected the premises of the petitioner and that a stock inventory was carried on without properly making verification and that the first respondent "allegedly drew an inference" that there was deficit/variation in stock of silver items worth Rs. 4,41,065 and got recorded a statement that the petitioner was liable to tax under section 6A of the APGST Act on an amount of Rs. 31,114. On that basis, the first respondent collected towards tax and five times penalty a sum of Rs. 56,658 under coercion by way of cheques without giving any show cause notice or opportunity to the petitioner. He contends that the demand for tax and penalty and the collection of cheques for the sum of Rs. 56,658 is arbitrary, illegal and without authority of law.
3. The petitioner in W.P. No. 28058 of 1995 is also a proprietary concern engaged in the business of gold and silver articles. Its proprietor gave an affidavit in support of the writ petition. He also states that on November 15, 1995, the first respondent in this writ petition inspected the premises of the petitioner from 7.00 p.m. to 11.00 p.m. and carried on stock inventory and that without properly making verification he "allegedly drew an inference" that there was deficit stock of silver items worth Rs. 2,69,280. The first respondent then got recorded a statement that the petitioner was liable to pay tax under section 6A of the APGST Act on an amount of Rs. 5,47,896 and collected an amount of Rs. 43,271 towards tax and five times penalty under coercion by way of cheques drawn in his favour. He further states that the first respondent again visited and also got deposited under coercion an amount of Rs. 5,385 in cash through SBH Challan No. 620080 dated December 1, 1995, for which he did not give any notice. The petitioner questions the collections made as arbitrary and that no notice and opportunity was given to it and no assessment was also made. However, we may note here itself that there is no convincing explanation as to how the petitioner paid Rs. 5,385 in cash through SBH Challan No. 620080 dated December 1, 1995. As per the averments in the affidavit in support of the writ petition, this was not on November 15, 1995, but subsequently. It is also significant that in the letter of the petitioner dated December 4, 1995, addressed to the second respondent, i.e., Deputy Commissioner of Commercial Taxes, Secunderabad Division, no mention was made of this payment and no objection was taken in that regard. In the circumstances, we find it difficult to accept the averment made on behalf of this petitioner that the said sum was paid into bank under coercion. The learned counsel accepts that the original copy of the challan is with the petitioner - he has in fact produced the original copy before us. From this, it is obvious that for some reason or the other the petitioner voluntarily paid the said sum of Rs. 5,385 by depositing the same under SBH Challan No. 620080 dated December 1, 1995.
4. The learned Special Government Pleader for Taxes does not seriously dispute that the demand of tax and five times penalty of Rs. 56,658 and Rs. 43,271 from the petitioners in W.P. Nos. 28057 and 28058 of 1995 respectively is without authority of law inasmuch as no assessments were made in that regard. Therefore, collection of the said amounts by way of cheques is on the face of it highly arbitrary and irregular. No doubt the cheques could not be encashed because the petitioners stopped them.
5. The respondents sought to justify relying on the decision of this Court in Kaki Butchi Raju Son v. State of Andhra Pradesh [1995] 96 STC 63; (1994) 19 APSTJ 19. But that was a case of composition of offences under section 32 of the APGST Act which permitted composition of offences consisting of the failure to pay or the evasion of any tax recoverable under the Andhra Pradesh General Sales Tax Act, by the prescribed authority accepting in addition to the tax recoverable a sum of money not exceeding Rs. 3,000 or double the amount of tax recoverable whichever is greater. It is not the case of the respondents that the disputed amounts were demanded from the petitioners under section 32 for composition of offences committed by them. Moreover, admittedly penalty by way of five times tax has been demanded from the petitioners which cannot be under section 32 of the APGST Act.
6. In the circumstances, the writ petitions are allowed with costs restricting the amount in the case of W.P. No. 28058 of 1995 to Rs. 43,271 and substituting the same for Rs. 48,656 in respect of which the petitioner sought relief.
7. It is, however, made clear that it will be open to the respondents to proceed against the petitioners in accordance with law and take appropriate action against them if they are found to have violated the law.
8. Advocate's fee Rs. 350 in each.
9. Writ petitions allowed.