M/s. Rani Plastic Pipe Industries v. The Commissioner of Commercial Taxes

Andhra Pradesh HC11 Nov 2022SPLA/20/2004

Case brief

AI extract

What is this about?

This court disposed of special appeals under the Andhra Pradesh General Sales Tax Act. The appellants challenged orders restoring earlier assessment proceedings based on Central Excise findings. The court referred to precedents requiring independent inquiry, setting aside the commissioner's orders and directing the assessing authority to deal with the matters afresh independently.

What did the court decide?

Set aside the orders of the Commissioner of Commercial Taxes dated 17.02.2004 and directed the assessing authority to independently deal with the matters based on material on record after hearing.

M/s. Rani Plastic Pipe Industries Vs The… — Writ and Judicial Review | Andhra Pradesh HC (2022)

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THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE B.V.L.N.CHAKRAVARTHI

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SPECIAL APPEAL Nos.20, 21 & 23 OF 2004

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COMMON JUDGMENT:- (Per Hon’ble Sri Justice C.Praveen Kumar)

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Heard Sri S. Dwarakanath, learned Senior Counsel appearing for the appellants, and Sri Y.N.Vivekananda, learned Standing Counsel for Commercial Tax appearing for the respondents.

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Special Appeal Nos.20, 21 and 23 of 2004 are filed under Section 23(1) of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter, referred to as “the A.P.G.S.T. Act”), assailing the orders of the Commissioner of Commercial Taxes, Andhra Pradesh vide CCT’s Ref:L.III(3)/1256/2001-1, dated 17.02.2004, CCT’s Ref:L.III(3)/1256/2001-2, dated 17.02.2004, and CCT’s Ref:L.III(3)/1257/2001-1, dated 17.02.2004 respectively.

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Since the issue involved in all these appeals is one and the same, they are disposed of by this common judgment taking Special Appeal No.23 of 2004 as a lead case.

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The facts in issue are as under:-

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The appellant is a registered dealer registered under A.P.G.S.T. Act on the rolls of Commercial Tax Officer-I, Nandyal, engaged in business of manufacture and sale of PVC pipes and PVC compounds. For the assessment year, 1997-98, the appellant was filing returns and paying tax regularly. On 21^st and 22^nd November, 1998, an inspection was conducted by the Assistant Commissioner of Customs and Central Excise (Anti Evasion Squad), Hyderabad at the factory premises of the appellant and notified certain irregularities like suppression and production of PVC pipes and PVC compounds.

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(ii) A notice dated 26.10.1999 came to be issued proposing to bring the differential turnover reported to the Central Excise Department under RT-12 returns and the turnover reported in the A2 returns of Commercial Taxes Department, as suppressed turnover. The Joint Commissioner (CT) (Enforcement) is said to have approached the Commissionerate of Customs and Excise to obtain material recovered, pursuant to the inspection. Thereafter, a revised show cause notice was issued proposing to levy tax. In response to the show cause notice, the petitioner filed its detailed objections on 09.12.2000 on all the seven issues referred to in the show cause notice.

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(iii) Vide order dated 31.03.2001, the Commercial Tax Officer confirmed the levy of tax on issues Nos.1 to 6 and dropped issue No.7 shown in the show cause notice. Aggrieved by the same, the appellant preferred an appeal before the Appellate Deputy Commissioner, Kurnool reiterating its contentions. By an order dated 07.06.2001, the Appellate Deputy Commissioner held that since the Central Excise proceedings are not yet finalized; as a clear picture of alleged suppressed production in respect of the various goods could not emerge and as the situation is only vague, set aside the order of the Commercial Tax Officer and directed the assessing authority to take up revision of the assessment, depending on the outcome of the Central Excise proceedings.

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(iv) While so, the respondent herein proposed to revise the order of Appellate Deputy Commissioner invoking Section 20 of the Act and to restore the order of the Commercial Tax officer in respect of the issues referred to in the show cause notice. Objections came to be filed, raising various issues, stating that the proposed revision, at that stage of proceedings is unwarranted and that the proceedings may be deferred till a final decision is taken on the liability of the appellant under the Central Excise Act. A copy of the order passed by the

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Settlement Commission dated 10.10.2002 was also filed along with the objections.

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(v) By an order, dated 17.02.2004, the respondent herein set aside the order of the Appellate Deputy Commissioner and restored the order of Commercial Tax Officer dated 31.03.2001. Assailing the same, the present Appeal is filed raising various legal issues.

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Sri S.Dwarakanath, learned Senior Counsel appearing for the appellants, mainly submits that the cases on hand are squarely covered by the judgment of the Division Bench of the combined High Court in Alumeco India Extrusion Limited and another v. Commercial Tax Officer, Begumpet Circle, Pavani and others¹ wherein, in an identical situation, it was held as under:-

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“It was also open to the authorities under the APVAT Act and the APGST Act to have caused an independent enquiry and to have arrived at an independent conclusion regarding the nature of the transactions of the petitioner. In the present case, al that has been relied upon is the show-cause notice issued by the Central Excise Department and, in the absence of any adjudication under the said Act, no assessment order/reassessment orders could have been passed under the APVAT Act or under the APGST Act solely on

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1 [2010]027 VST 0419

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the basis of the show-cause notice issued by the Central Excise.

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The impugned orders are required to be quashed on this short ground and they are, accordingly, quashed.

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Needless to state that it is always open to the respondents to issue a show-cause notice afresh, give the petitioner an opportunity of being heard and pass assessment/reassessment orders afresh in accordance with law.”

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Sri Y.N.Vivekananda, learned Standing Counsel for the respondents, opposed the same contending that the facts in the referred case and the facts in the cases on hand are different and that the ratio laid down in the referred case will not apply to the facts in the cases on hand. In other words, his argument is that the reported case was at the stage of show cause notice, while the instant cases are after filing of returns.

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In reply Sri S.Dwarakanath, learned Senior Counsel for the appellants, would contend that it will not make any difference whether it is at the stage of assessment or after passing of the assessment order, since the ratio laid down in the referred case squarely applies to the facts in either situation.

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It is to be noted here that the assessment orders came to

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be passed basing on the orders passed by the Central Excise Department, which is subject matter of challenge before the

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Settlement Commission. As the orders are passed partly accepting and partly rejecting the plea of the appellants, and as the original assessment orders came to be passed basing on the proceedings issued or orders passed by the Central Excise Department, we feel that it will be just and proper for the assessing authority to decide the matters afresh independently, in terms of the orders passed in Alumeco India Extrusion Limited, which is referred to earlier.

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Accordingly, all the Special Appeals are disposed of setting aside the orders of the Commissioner of Commercial Taxes, dated 17.02.2004, consequently, directing the assessing authority to independently deal with the matters basing on the material available on record, after giving an opportunity of hearing to all concerned. There shall be no order as to costs.

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As a sequel thereto, miscellaneous petitions, if any, in these appeals shall stand closed.

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_______________________________ JUSTICE C.PRAVEEN KUMAR

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___________________________________ JUSTICE B.V.L.N.CHAKRAVARTHI

Date: 11.11.2022 AMD

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