M/S. Saisudhir Infrastructures ... vs Commercial Tax Officer, Hyd 2 ...
2022 Latest Caselaw 6595 Tel

        THE HON'BLE SRI JUSTICE T. VINOD KUMAR
                            AND
        THE HON'BLE SRI JUSTICE PULLA KARTHIK

              WRIT PETITION No.36789 OF 2015


ORDER: (per Hon'ble Sri Justice T.Vinod Kumar)

      This Writ Petition is filed for issue of writ of mandamus

with the following prayers:

       i. setting aside the order of the 1st respondent dated

01.10.2013 as passed in violation of principles of natural justice overlooking the objections of the petitioner dated 28.05.2013; and ii. in the alternative set-aside the order of the 2nd respondent dated 01.08.2015 for the tax period 2011-12 under the APVAT Act, 2005 and permit the petitioner to make payment of balance pre-deposit of 12.5% of the disputed tax of Rs.68,43,263/- within a period of six weeks and consequently direct the 2nd respondent to restore the appeal on file for adjudication on merits.

2. Heard Sri B. Narasimha Sarma, learned Counsel

representing Sri G. Kalyan Chakravarthy, learned Counsel for

the petitioner and Sri K. Raji Reddy, learned Special Standing

Counsel appearing for the respondents, and perused the record.

3. Petitioner contends that it is a registered dealer under the

provisions of A.P. VAT Act, 2005 (for short 'the Act') on the rolls

of Commercial Tax office, Jubilee hills circle and is undertaking

execution of works contracts.

4. Petitioner contends that for the tax period from April,

2011 to March, 2012, the petitioner was issued with show cause

notice dated 12.04.2013 proposing to assess the petitioner to

tax under the provisions of Act; that to the said show cause

notice, the petitioner had submitted its reply dated 03.05.2013;

that upon submission of the afore-stated reply, the 1st

respondent authority issued a revised show cause notice dated

06.05.2013 proposing to assess the petitioner to tax under

Section 4(7)(a) of the Act and Rule 17(1)(e) of the VAT Rules; and

that to the said revised show cause notice, the petitioner had

filed its reply dated 28.05.2013.

5. Petitioner further contends that upon it filing detailed

reply dated 28.05.2013 enclosing therewith the relevant

documents, the 1st respondent authority had passed order

dated 01.10.2013, served on 05.10.2013, raising a demand of

under- declared output tax in a sum of Rs.6,37,05,021/- and

directed the said under-declared output tax be paid within a

period of thirty days.

6. Petitioner further contends that aggrieved by the said

order of assessment, it had approached the 1st appellate

authority by filing appeal under Section 31 of the Act on

06.11.2013 and that the said appeal was rejected by the 2nd

respondent authority by its order dated 01.08.2015 holding that

the petitioner did not make the mandatory pre-deposit of 12.5%

of the disputed tax as prescribed under the second proviso to

Section 31(1) of the Act; and that the High Court of Andhra

Pradesh in Ankamma Trading Co. v. Commissioner1 held that

the admission of the appeals filed before the Appellate Deputy

Commissioner are liable for rejection if payment of admitted

tax/12.5% of the disputed tax is made beyond the prescribed

period of sixty days from the date of receipt of the impugned

order (i.e., assessment order).

7. Aggrieved by the said order of the 2nd respondent in

rejecting the appeal on the ground of non-payment of pre-

deposit amount as specified in Section 31 of the Act, the

petitioner has filed the present Writ Petition assailing, firstly the

correctness of the assessment order dated 01.10.2013, and

alternatively it also sought for setting aside the order of the 2nd

respondent authority in rejecting the appeal filed on the ground

of non-payment of the pre-deposit amount and permit the

1 (2011) 44 VST 189 (AP) = 2011 SCC OnLine AP 1205

petitioner to make the payment for maintaining the appeal

before the 2nd respondent authority.

8. Learned Counsel for the petitioner would contend that the

reliance placed by the 2nd respondent authority while rejecting

the appeal filed, on the basis of the judgment of this Court in

Ankamma Trading Co. (1 supra) stands impliedly overruled by

the judgment of the Hon'ble Supreme Court in S.E. Graphites

Private Limited v. State of Telangana2 and therefore the

petitioner may be afforded with an opportunity to make the

payment for maintaining the appeal before the 2nd respondent

as otherwise the petitioner would be left remediless.

9. Learned counsel for petitioner further contends that the

Supreme Court, in a similar matter where the mandatory

payment of pre-deposit was made after the appeal was

dismissed by the Appellate Authority, had observed that the

High Court ought to have condoned the delay in making such

payment of pre-deposit, and allowed the Civil Appeal in the case

of Innovative Systems v. State of A.P.3.

10. Learned counsel also contends that this Court in similar

situation in WP No.22337 of 2015 wherein the Appellate

2 (2020) 14 SCC 521 3 (2020) 14 SCC 542

Authority rejected the appeal at the admission stage for not

complying with the condition of pre-deposit permitted the

petitioner therein to make the pre-deposit within a period of six

weeks, and if this Court so permits, the petitioner in the present

Writ Petition would make the pre-deposit for maintaining the

appeal filed by it before the 2nd respondent authority in the

event of this Court not being inclined to go into the merits to

consider the correctness of the order of assessment passed by

the 1st respondent authority.

11. Per contra, Sri K. Raji Reddy, learned Special Standing

Counsel appearing on behalf of the respondents vehemently

opposes the submissions made by the learned Counsel for the

petitioner.

12. Learned Special Standing Counsel by drawing attention of

this Court to the judgment of the Supreme Court in S.E.

Graphites Private Limited (3 supra) would submit that the

issue under consideration before the Hon'ble Supreme Court

was as to whether the appellate authority could have taken note

of the payment of pre-deposit made subsequent to the filing of

the appeal, including the period of condonation of delay as

provided under the Act. It is further contended that the

Supreme Court while dealing with the said plea had observed

that the pre-deposit made after filing of appeal, but before the

first date of hearing is to be permitted, while in the facts of the

present case though the petitioner had filed appeal on

06.11.2013 and the first hearing having been granted by the 2nd

respondent authority on 20.07.2015, the petitioner did not

make payment of the pre-deposit amount and, as such, the

decision of the Supreme Court in S.E. Graphites Private

Limited (3 supra), cannot be taken advantage of.

13. Learned Special Standing Counsel would further contend

that the petitioner not only failed to make any payment upto the

date of first hearing, but is also continuing the default as of

today and, as such, no indulgence can be shown by this Court

either by granting time for making payment of pre-deposit

amount for taking the appeal on record or deciding the same on

merit.

14. We have taken note of the contentions urged.

15. It is to be seen that aggrieved by the order of assessment

passed by the 1st respondent dated 01.10.2013, the petitioner

had filed appeal in time i.e., within thirty days as prescribed

under the Act. Though the petitioner had filed appeal in time, it

is an admitted fact that it did not make payment of pre-deposit

of 12.5% of the disputed tax, except the payment of the appeal

fee of Rs.1,000/-. Upon rejection of the appeal by the 2nd

respondent authority, the petitioner choose to challenge the said

order by questioning the assessment order also before this

Court and thus there was no situation where the petitioner

could have made the payment of pre-deposit amount prescribed

under the Act.

16. This Court, on 17.11.2015, taking note of the fact that the

SLP preferred against the decision of this Court in Ankamma

Trading Company (1 supra) is pending consideration before the

Supreme Court, admitted the present Writ Petition and that is

how the present Writ Petition is pending on the file of this

Court, since 2015.

17. Further, it is to be seen that the Hon'ble Supreme Court

in Innovative Systems (2 supra) while taking note of the fact

that petitioner therein had made payment of pre-deposit of

12.5% of the disputed tax even after the appeal was dismissed

by the Appellate Authority had allowed the Civil Appeal, setting

aside the judgment of the combined High Court for the State of

Telangana and the State of Andhra Pradesh, while restoring the

appeal to the file of the Appellate Deputy Commissioner to

decide the same on merits observed that:

"8. It is an admitted fact that after the disposal of the appeal by the Appellate Deputy Commissioner, the appellant had deposited the pre-deposit as directed by the Appellate Deputy Commissioner (CT), Vishakhapatnam.

9. In a scenario like this, we are of the opinion that the High Court ought to have condoned the delay in complying with the order passed by the Appellate Deputy Commissioner (CT), Vishakhapatnam and should have directed him to decide the appeal on merits. Since that has not been done by the High Court, we take exception to the said order."

18. Though the delay in the case of Innovative Systems (2

supra) was of three months from the date of rejection of appeal

to the date of payment, it is the principle and ratio laid down

that need to be applied and not by comparing the period of

delay. In the facts of the present case, since the petitioner had

approached this Court upon rejection of the appeal by the 2nd

respondent and this Court having admitted the Writ Petition,

this Court is of the considered opinion that the petitioner

cannot be deprived of the benefit of the ratio decidendi of the

judgment of the Supreme Court in Innovative Systems (2

supra) on the ground of lapse of long period. Further, if the

period during which the present Writ Petition is pending before

this Court is excluded, the period from the date of

dismissal/rejection of appeal would not be too long a period as

contended by the Special Standing Counsel.

19. Since the Writ Petition is filed challenging the order of

assessment which involves factual aspects as also in the

alternative, the rejection of the appeal by the 2nd respondent on

the ground of non-payment of the pre-deposit relying on the

judgment of Ankamma Trading Co. (1 supra) which now

stands impliedly overruled, we are of the considered view that

instead of this Court delving into the factual aspect involved in

the matter, should direct the petitioner to make the payment of

the pre-deposit amount within a reasonable time as specified

herein, as has been done by the co-ordinate bench of this Court

in WP No.22337 of 2015, and upon such payment directing the

2nd respondent authority to decide the appeal on its merits.

20. Considering the fact that, since seven years have passed

by from the date of rejection of the appeal by the 2nd respondent

and the admission of the Writ Petition by this Court, the

reasonable time for making pre-deposit would be two weeks

from today.

21. Having regard to the peculiar facts as stated hereinabove,

this Court is of the view that it would be reasonable to direct the

petitioner to make the pre-deposit of 12.5% disputed tax in two

weeks from today i.e., on or before 22.12.2022. Upon the

petitioner making the said payment of pre-deposit within the

time specified hereinabove and filing proof of such payment with

the 2nd respondent authority, the order of the 2nd respondent

dated 01.08.2015 by which the appeal filed by the petitioner has

been rejected stands set aside and the appeal is restored to the

file of the 2nd respondent authority, who thereafter shall decide

the matter on merits in accordance with law after granting

opportunity of personal hearing to the petitioner.

22. Subject to the above direction, the Writ Petition is

disposed of. No costs.

23. Consequently, miscellaneous petitions pending, if any,

shall stand closed.

_____________________ T. VINOD KUMAR, J

____________________ PULLA KARTHIK, J Date: 08.12.2022

MRKR

THE HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SRI JUSTICE PULLA KARTHIK

WRIT PETITION No.36789 OF 2015

08.12.2022 MRKR