Andhra HC (Pre-Telangana)
Andhra Cement Company Ltd. vs Government Of Andhra Pradesh And Ors. on 5 November, 1991
Equivalent citations: [1993]89STC124(AP)
JUDGMENT S.C. Pratap, C.J.
1. This article 226 petition challenges the statutory notice under section 17 of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter "the Act"). The main contention related not to the veracity of the demand but the purported present inability to pay the same.
2. The petitioner-company (hereafter "the company") is a dealer registered under the A.P. General Sales Tax Act. It has branches at Dachepalli, Vijayawada and Visakhapatnam. It is an assessee on the rolls of the Commercial Tax Officer, Company Circle, Vijayawada. Under rule 17 of the Andhra Pradesh General Sales Tax Rules, 1957 (for short "the Rules") every dealer whose annual total turnover exceeds rupees ten lakhs has to submit a return in form A2 showing the total and net turnover every month to the assessing authority by the 25th of the succeeding month. The return should reach the assessing authority by that date. Along with the return the dealer has to submit a receipt from a Government Treasury or crossed demand draft, or banker's cheque covering the full tax or taxes and the surcharge payable for the month to which the return relates. In the event of default the assessee is liable to pay penalty under section 15 of the Act.
3. For the past few years the company has been a continuous defaulter in the payment of State as also Central sales taxes. And as the history of this litigation shows, the company has been invoking every possible means of avoiding and evading the payment thereof. This petition is but one more attempt in this behalf. Taken along with the previous similar attempts either by way of a suit or writ petition it reflects abuse of the legal processes. The company has built up a rather dubious image of being in the virtual habit of not paying taxes unless coerced or compelled to do so.
4. When the matter first came up, we were inclined to grant some indulgence to the company by permitting it, albeit on terms and conditions, to pay the tax amount by certain instalments with interest. After a couple of adjournments, even this indulgence was not accepted with grace which, in the process, causing further delay resulting in substantial loss of interest to the respondents. Undertakings by all concerned parties as required by this Court did not come forth. Only one party sought to give an undertaking, but the other failed to do so.
5. The demand for sales tax dues constituting the subject-matter of this petition is Rs. 5,75,00,750 for the period up to August 1991, excluding the subsequent dues for the months of September and October 1991. On the earlier occasion we directed the company to pay current dues for the month of September 1991 by 25th October, 1991. But even that direction was not complied with. Instead, suppressing the same, the company had no compunction in applying to the Commissioner for Commercial Taxes for instalments of September dues, vide copy of letter dated 22nd October, 1991, produced before us by the learned Government Pleader. This conduct, bordering on contempt, is in piece with the general conduct of the company. Though initially we were inclined to given benefit of doubt to the company on their bona fides, we are now convinced that the company has been taking undue advantage of the processes of the court and is out to avoid and evade payment of taxes as long as possible, in the meanwhile enjoying the benefit of recovered taxes to the detriment of public revenue.
6. The detail counter filed by the respondents also, inter alia, elaborates on the conduct of the company. On prior occasions even electricity dues worth crores of rupees were not paid by this company despite the fact that power was consumed, business prepared and profits made. Instead, injunctions were obtained not to disconnect electric power. That process ultimately filed. Even in the present case, a civil suit was earlier filed and injunction obtained restraining the defendants from recovering taxes. And when appeal was filed to to have the same vacated, the original suit was unconditionally withdrawn. Still further and at times cheques were given only to be dishonoured on presentation. When at certain stages instalments were granted at the level of the Commercial Tax Officer, payments were never made in accordance therewith. And all this while the company's business of manufacturing cement has thriving and prospering. The company's cement industry is one which is currently enjoying boom conditions. The company, however, appears to have developed the habit of evading, avoiding, delaying and litigating payment of taxes.
7. Apart from the amount and the period under the impugned notice, the company is in addition thereto in default of arrears of taxes of about thirteen crores for the period thereto. The same, however, is not the subject-matter of this petition which relates only to the current dues which taking into account September and October 1991, should by now be running into over rupees crores fifty lakhs. The company has been carrying on its business prosperously with over five thousand employees working therein and with total turnover into crores of rupees. Considering the boom conditions in the cement industry the company has even reopened its Vijayawada unit.
8. Reliance was sought to be placed on section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. We fail to see how it assists the company in this case for the period in question to which the impugned demand relates. The said Act does not permit the company to withhold payment of taxes on sales subsequent to the proceedings under the aforesaid Act. Besides, the company is not closed. Nor is it presently sick nor in the process of any revival as such. It is an fact actively carrying on its business of manufacturing cement and its said business is prospering. Its erstwhile purported sickness has not affected its present property. Instead, it belongs to that category which itself is currently a highly prosperous industry in the country.
9. Taking all factors and circumstances into consideration and predominantly the dismal conduct of the company, we are not inclined to grant any relief to it in exercise of our discretionary writ jurisdiction. Article 226 of the Constitution is not meant for putting premium on such conduct. Court would not encourage invoking writ jurisdiction to evade and avoid payment of tax nor can it in such context be invoked for claiming instalments. The consistent conduct of the company disentitles it to any relief in this Court's writ jurisdiction. In sum, the just and proper order on this petition to curb evasion and restrain abuse of court's process would be to dismiss this petition in limine. It is hence, accordingly, dismissed. Interim order stand vacated.
10. As considerable judicial time of the court was taken by the company with the court and the Government Pleader taken for a ride and left and kept under an erroneous impression on the bona fides of the company, we direct the company to pay to the respondents costs quantified at Rs. 5,000 (rupees five thousand).
11. Learned counsel seeks leave to appeal to the Supreme Court. There is no substantial question of law as to the interpretation of the Constitution nor any substantial question of law of general importance which needs to be decided by the Supreme Court. Indeed major part of the arguments before us indicated that the writ jurisdiction of this Court was invoked more by way of a mercy petition to grant indulgence by way of instalments but on terms which did not inspire court's confidence. Leave to appeal is rejected.
12. Writ petition dismissed.