Disposed

M/s. Royal Constructions, v. The Additional Commissioner (Ct)

Andhra Pradesh HC4 Jan 2024WP/14303/2023

Case brief

AI extract

What is this about?

A trader whose APVAT penalty order was under appeal sought stay of recovery after depositing 25% statutory amount; stay application had been rejected. The High Court disposed of the writ finally, directing expeditious appellate decision, no recovery during pendency subject to deposit of total 50% penalty within three weeks.

What did the court decide?

Stay of recovery of remaining penalty during pendency of appeal, conditional on deposit of additional 25% (total 50%) within three weeks; Tribunal to decide appeal expeditiously.

M/s. Royal Constructions, Vs The Additional… — GST and Indirect Tax | Andhra Pradesh HC (2024)

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THE HON’BLE SRI JUSTICE RAVI NATH TILHARI AND

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THE HON’BLE SRI JUSTICE HARINATH NUNEPALLY WRIT PETITION No.14303 OF 2023

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JUDGMENT:- (per Hon’ble Sri Justice Ravi Nath Tilhari)

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Heard Sri C. Sanjeeva Rao, learned counsel for the petitioner and learned Government Pleader for Commercial Tax for the respondents.

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This writ petition under Article 226 of the Constitution of India has been filed for the following relief:-

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“For the reasons stated above, it is prayed that the Hon’ble Court may be pleased to issue a Writ of Mandamus or any other appropriate writ or order or direction declaring the action of the 1^st respondent in confirming the levy of penalty by the 2^nd respondent passed the order levying the penalty of 25% to the tune of Rs.5,73,990/- vide D. C. Order No.ZH3712210D59414 bearing eFile No.CTVSPM-11041/7/2020-REVISION SECVSPM, dated 10.12.2021 served on 30.12.2021 under the APVAT Act, 2005 is contrary to Article 14, 19(1)(g) of the Constitution of India and also the same is not valid in the eye of law as per the provisions of Section 32(4) and Rule 50(2) of the Act and Rules, is without jurisdiction and in violation of principles of natural justice and consequently set aside the proceedings of the 1^st respondent and 2^nd respondent as null and void and pass such other order or orders as the Hon’ble Court may deem fit and proper in the circumstances of the case.”

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The petitioner has challenged the order of penalty before the Appellate Authority in pending T.A. No.71 of 2022. The petitioner has deposited 25%, the statutory amount, of penalty before the Appellate Authority.

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The petitioner’s application for stay has been rejected by the Additional Commissioner (CT), Legal, Office of the Commissioner of Commercial Taxes, A.P., Kunchanapalli, Guntur District, respondent No.1, by impugned order dated 08.05.2023.

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Learned counsel for the petitioner submits that once the petitioner is availing the statutory remedy of appeal after making compliance with the statutory condition of making deposit of 25%, the rejection of the petitioner’s application by the Additional Commissioner, during pendency of the appeal, before the respondent No.4, A.P. VAT Appellate Tribunal, is not justified. He submits that the Additional Commissioner has also observed in the impugned order that the issue involves question of law.

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Learned counsel for the petitioner submits that a Co-ordinate Bench of this Court, under the similar circumstances, in W.P.No.27677 of 2023 has disposed of the said writ petition finally with directions as under:-

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“5. Considering the aforesaid submissions, we find that the appeal is pending since 2019 which deserves to be decided by the A.P. VAT Appellate Tribunal, Visakhapatnam expeditiously. The petitioner has already deposited 50% of the disputed amount of penalty as submitted above. Consequently, we provide that the balance amount of the disputed penalty shall not be recovered or realized provided the petitioner deposits 10% of the disputed penalty in addition to the already deposited 50% within a period of two weeks from the date of receipt of copy of this order. Such deposit shall abide by the result of the appeal pending before the A.P. VAT Appellate Tribunal, Visakhapatnam.

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The writ petition stands disposed of finally. No order as to costs.”

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Learned Government Pleader submits that in the said case (W.P.No.27677 of 2023), the petitioner therein had deposited 50% of the penalty amount and in addition thereto, this Court also directed for 10% more to be deposited. He submits that in the present case also atleast 50% may be directed to be paid and the present petition may be disposed of.

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Considering the submissions, we are of the view that once the petitioner’s appeal is pending consideration before the Appellate Tribunal and the appeal involves question of law as observed in the impugned order, instead of rejecting the stay application, the stay of the remaining penalty amount should

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have been granted subject to payment of some more amount as condition.

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Considering the aforesaid, as also the order passed by Co-ordinate Bench in W.P.No.27677 of 2023, this writ petition is also being disposed of finally with the consent of the parties counsels, at this stage, providing that the Appellate Tribunal shall make endeavour to decide the petitioner’s pending appeal expeditiously in accordance with law, and during pendency of the appeal, the penalty order shall not be given effect to subject to the condition that the petitioner shall deposit in total 50% of the penalty amount i.e. after making adjustment of the 25% already deposited, within a period of three (03) weeks from the date copy of this order is received, before the Appellate Tribunal. Such deposit shall abide by the result of the appeal. In default, the protection of this order shall not be available to the petitioner.

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