Petitioner filed a writ petition seeking stay of recovery of disputed tax after such tax was already recovered by department bank attachment. Court held petition liable for dismissal without staying order or amendment.
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THE HONOURABLE SRI JUSTICE M. SEETHARAMA MURTI AND THE HONOURABLE MS JUSTICE J. UMA DEVI
WRIT PETITION No.4047 of 2019
ORDER : [Per Hon’ble Sri Justice M. Seetharama Murti]
This writ petition, under Article 226 of the Constitution of India, is filed by
the petitioner seeking verbatim the following relief/s:
“ …to issue a Writ, Order or direction particularly one in the nature of a WRIT OF MANDAMUS setting aside the impugned Endorsement dated 14.03.2019 issued by the 1st Respondent directing to pay the balance disputed tax of Rs.1,05,88,512/- for the period from April, 2012 to March, 2015 within three days from the date of receipt of the said Notice as illegal, arbitrary, violative of principles of natural justice and consequently grant stay of recovery of the balance disputed tax till the disposal of the appeal by the Hon’ble Andhra Pradesh VAT Appellate Tribunal, Visakhapatnam and pass such other order or orders as the Hon’ble High Court may deem fit and proper in the circumstances of the case.
We have heard the submissions of Sri Raghavan Ramabhadran, learned counsel, appearing for the writ petitioner and of learned Government Pleader, representing learned Advocate General, appearing for the respondents 1 to 5. We have perused the material record.
The case of the petitioner, in brief, is this: - ‘The 1st respondent passed an assessment order, dated 30.01.2016, denying input tax credit to the tune of Rs.2,11,77,022/- for the period from April, 2012 to March, 2015. Aggrieved thereof, the petitioner preferred an appeal before the Appellate Deputy Commissioner [ADC]. The petitioner made a statutory pre deposit of 12.5% of disputed tax, on 04.03.2016, at the time of filing of the said appeal. 3rd respondent, by an order, dated 05.05.2016, dismissed the application seeking stay pending disposal of the appeal. Aggrieved thereof, the petitioner preferred a revision application, on 28.06.2016, before the 2nd respondent. The 2nd respondent, by an order, dated 28.07.2016, denied stay of recovery of balance
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disputed tax. Hence, the petitioner preferred WP.no.27487 of 2016. The said writ petition was allowed by a Division Bench of High Court of Judicature at Hyderabad for the State of Telangana and The State of Andhra Pradesh, by an order, dated 24.08.2016. By the said order, respondents were directed not to take coercive steps for recovery of the disputed tax, pending disposal of the appeal by the ADC on condition that the petitioner deposits 40% of the tax due within two months from that day, that is, 50% thereof within one month from that day and the balance 50% within one month thereafter. The High Court also directed in the writ order that the petitioner shall be given credit for the amount already paid in that regard. 20% of the disputed tax was paid on 04.11.2016 in compliance of the condition of payment of second instalment of 50% of 40% of disputed tax as per the writ orders of the High Court in the above said writ petition. However, the ADC dismissed the appeal, by an order, dated 28.02.2017. The petitioner filed an appeal before the AP VAT Appellate Tribunal, Visakhapatnam, vide TA.no.278 of 2017. At that time, on 21.03.2017, another 10% of the disputed tax was paid as statutory pre deposit. In all 50% of the disputed tax was paid by the time of filing of the appeal before the Tribunal. On 12.03.2019, 1st respondent issued notice, dated 12.03.2019, directing the petitioner to pay the balance disputed tax of Rs.1,05,88,512/- within 7 days. The petitioner filed a reply, dated 13.03.2019. The 1st respondent issued an endorsement, dated 14.03.2019, directing to pay the balance disputed tax within three days from the date of receipt of the said endorsement, which is impugned in this writ petition filed on 25.03.2019. The writ petition was listed on 26.03.2019 for admission. The petitioner argued the matter and prayed for granting stay of collection of balance disputed tax pending disposal of the appeal before the Tribunal. The learned standing counsel for the department took time
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to make submissions. On 28.03.2019, petitioner filed a letter with the 1st respondent informing that the writ petition is pending for further submissions from the department’s side and requested to keep the recovery proceedings in abeyance till the disposal of the writ petition. Despite pendency of the writ petition and the earlier writ orders, bank attachment notice was served on the petitioner,on 28.03.2019, and balance 50% demand (disputed tax) was recovered by attachment of the bank account, on 30.03.2019. In the said circumstances, the petitioner is entitled to refund of the balance disputed tax subject to the result of the Appeal, pending for adjudication before the Tribunal, and hence, the respondents may be directed to refund the balance disputed tax having regard to the facts and circumstances of the case. The petitioner undertakes to repay the refunded disputed tax, in the event of the failure of the petitioner to succeed in the appeal pending before the Tribunal.’
Learned counsel for the petitioner reiterated the case of the petitioner narrated supra and further contended as follows: - ‘During the pendency of the appeal before the ADC, this Court in the writ orders passed in WP.no.27487 of 2016 directed not to take coercive steps for recovery of disputed tax pending disposal of the appeal before the ADC on condition of the petitioner depositing 40% of the tax due. The writ order also directed to give credit for the amount already paid by the petitioner. The petitioner complied with the order. After the dismissal of the appeal, the petitioner preferred an appeal before the AP VAT Appellate Tribunal and paid 10% of the disputed tax as per the requirement of statutory pre deposit. Thus, the petitioner has in all paid 50% of the disputed tax. However, as a notice was issued, on 12.03.2019, to pay the balance of disputed tax and as the reply, dated 13.03.2019, of the petitioner was not
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considered, and an endorsement, dated 14.03.2019, was issued directing the petitioner to pay the balance disputed tax within three days, the petitioner filed the present writ petition seeking stay of payment of balance disputed tax pending final disposal of the appeal before the Tribunal. The Department is fully aware of the pendency of the present writ petition and the chronology of events and yet the bank attachment notice was served on the petitioner, on 28.03.2019, and the balance 50% demand was recovered on 30.03.2019. The said conduct of the officers of the Department is not just & fair and is contrary to writ orders of this Court. Hence, the petitioner is entitled to refund of the balance disputed tax, which the petitioner undertakes to repay in the event of his failure to succeed in the appeal before the Tribunal.’
Learned Government Pleader representing learned Advocate General submits as follows: - ‘The writ petition in WP.no.27487 of 2016 is filed seeking stay of payment of balance disputed tax during the pendency of appeal before ADC/appellate authority. Conditional stay orders were granted. The conditions in the said stay orders are complied with. Later the appeal was dismissed by the ADC. Hence, the said stay order will not inure for the benefit of the petitioner during the pendency of the appeal subsequently filed before the Tribunal. Hence, recovery notice was issued directing to pay the balance disputed tax within seven days. When the petitioner issued a reply, the endorsement, which is impugned, is given giving further time of three days to pay the balance disputed tax. Since no stay orders are granted in the present writ petition in which the endorsement is impugned, the attachment notice was served on the petitioner, on 28.03.2019, and balance 50% of the demand was recovered by attachment of bank account on 30.03.2019 and, therefore, the respondents, who
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have acted in accordance with law for recovery of the balance disputed tax, cannot be found fault. Since the writ petition is filed seeking stay and as stay orders are not granted and as the balance disputed tax is already recovered, the writ petition has become infructuous. If the petitioner wants to seek refund of the balance disputed tax, he has to seek appropriate remedy by either seeking amendment of the relief claimed in the present writ petition or by initiating fresh proceedings before the appropriate forum and hence, the petitioner is not entitled to seek refund of the balance disputed tax.’
In reply, learned counsel for the petitioner submitted that in matters of this nature, during the pendency of the appeal before the Tribunal, when dealers are approaching this Court and seeking stay of payment of balance disputed tax by stating that 50% of the disputed tax is already paid, this Court is granting uniformly orders of stay directing the respondents not to collect 50% of the balance disputed tax pending disposal of the appeal before the Tribunal and that in that view of the matter also the petitioner is entitled to refund of the balance disputed tax collected by coercive method taking advantage that though the writ petition is filed on 25.03.2019, stay orders could not be obtained by the petitioner.
We have given earnest consideration to the facts and submissions.
Admittedly, the writ petition is filed requesting to grant stay of recovery of the balance disputed tax till the disposal of the appeal by the Andhra Pradesh VAT Appellate Tribunal, Visakhapatnam. However, no interim orders of stay were granted and the writ petition was adjourned from time to time. As no stay orders were obtained by the petitioner, steps were initiated by the Revenue for
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collection/recovery of the balance disputed tax and admittedly the bank attachment notice was served on the petitioner, on 28.03.2019, and the balance 50% demand was recovered on 30.03.2019. So the relief claimed in the writ petition viz., request for grant of stay of recovery of the balance disputed tax till the disposal of the appeal by the Andhra Pradesh VAT Appellate Tribunal, Visakhapatnam, no longer survives. The petitioner has not sought amendment of the prayer in the writ petition. Unless the petitioner seeks amendment of the original relief claimed in the writ petition and seeks by way of amendment the present relief, that is, the refund of 50% of tax collected during the pendency of the appeal before the Tribunal, by also assigning valid reasons in support of the said relief, the Revenue will not be in a position to meet such claim for refund, pending disposal of the appeal by the Andhra Pradesh VAT Appellate Tribunal, Visakhapatnam. Hence, we are of the considered view that the petitioner cannot raise the issue related to claim for refund of the balance 50% disputed tax in this writ petition without duly seeking amendment of the writ petition as the relief claimed in the writ petition has become infructuous with the collection/recovery of the balance disputed tax and as nothing survives for adjudication in this writ petition. Therefore, we find that the writ petition is liable for dismissal.
In the result, the writ petition is dismissed. This order shall not preclude the petitioner from instituting before an appropriate Forum or a Court, a fresh proceeding, for the desired purpose, provided the law permits and if the petitioner so desires and is so advised.
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No order as to costs.
As a sequel, pending miscellaneous petitions, if any, shall stand dismissed.
M. SEETHARAMA MURTI, J
____________ J. UMA DEVI, J
11.09.2019 Vjl
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THE HONOURABLE SRI JUSTICE M. SEETHARAMA MURTI AND THE HONOURABLE MS JUSTICE J. UMA DEVI
WRIT PETITION No.4047 of 2019
[Per Hon’ble Sri Justice M. Seetharama Murti]
11.09.2019
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Vjl
1 issue framed by the court
Whether the writ petition seeking stay of recovery becomes infructuous after the disputed tax was recovered pending appeal before the Tribunal.
Petitioner
1st Respondent
M. SEETHARAMA MURTI
J. UMA DEVI
As recorded by the court registry
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