Dismissed

S.Pitchi Reddy, v. Appellate Deputy Commissioner (Ct)

Telangana HC8 Oct 2012WP/31333/2012

Case brief

AI extract

What is this about?

The High Court held that a petitioner disputing the entire tax liability under an agreement with APSRTC must deposit 12.5% of the full assessed amount as a condition precedent for appeal admission under Section 31 of the AP VAT Act, 2005. The Court dismissed the writ petitions but granted two weeks to make the deposit.

What did the court decide?

The writ petitions were dismissed at the stage of admission, with a time of two weeks granted for deposit of 12.5% tax.

S.Pitchi Reddy, Vs Appellate Deputy Commissioner… — Writ and Judicial Review | Telangana HC (2012)

¶1

THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO

¶2

WRIT PETITION Nos.31170, 31289, 31333 and 31334 of 2012

¶3

COMMON ORDER (Per the Hon’ble Sri Justice Goda Raghuram):

¶4

The several petitioners herein are aggrieved by notices issued by the Appellate Deputy Commissioner (CT), Guntur, all dated 12.09.2012 directing them to produce proof of payment of 12.5% of the disputed tax within the time stipulated.

¶5

The facts in W.P.No.31170 of 2012 are representative of the factual matrix of the issues involved in the other cases as well; and are referred to for the purpose of analysis.

¶6

W.P.No.31170 of 2012:

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The petitioner is the owner of several buses registered as public service vehicles. The petitioner entered into agreements with the Andhra Pradesh State Road Transport Corporation (APSRTC) whereunder the petitioner would make available vehicles to the APSRTC as per the terms of the agreements. The APSRTC in turn pays agreed amounts to the petitioner for lease of the vehicles.

¶8

The second respondent after a due process passed an order of Assessment dated 25.07.2012, levying tax by treating the transaction between the petitioner and the APSRTC (of transfer of the vehicles to the APSRTC for use by the later), under Section 4(8) of the AP VAT Act, 2005 (for short ‘the Act’), as transfer of the right to use goods.

¶9

Aggrieved thereby, the petitioner preferred an appeal to the first respondent. The first respondent issued the impugned notice dated 12.09.2012 calling upon the petitioner to pay 12.5% disputed tax, under Section 31 of the Act for admitting the appeal for eventual consideration.

¶10

Sri C. Raghu, learned counsel for the petitioner would strenuously contend that the petitioner is under no obligation to deposit 12.5% of the amount of tax assessed by the second respondent as a condition precedent for admission of the appeal by the first respondent, in view of second proviso to Section 31 of the Act. This is a contention that is to be rejected.

¶11

Section 31 of the Act occurs in the Chapter dealing with the appeals and revisions (Chapter V). The provision provides an appellate remedy to a prescribed authority against any order passed or proceeding recorded by any authority under the provisions of the Act, other than an order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner or Deputy Commissioner, within the time stipulated. The appellate remedy is available to any VAT dealer, TOT dealer or any other dealer, aggrieved by such order.

¶12

The second proviso to Section 31 of the Act reads;

¶13

“Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces the proof of payment of tax, penalty, interest or any other amount admitted to be due, or of such instalments as have been granted, and the proof of payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount, assessed by the authority prescribed and the tax, penalty, interest or any other amount admitted by the appellant, for the relevant tax period, in respect of which the appeal is prescribed.”

¶14

On a creative interpretation of provisions of the second proviso, Sri C. Raghu, learned counsel for the petitioners contends that twelve and half percent of only such amount is liable to be deposited as a condition precedent for admission of an appeal, if the liability is either not admitted or the difference between what is admitted and what is not; of a tax, penalty, interest or any other amount, assessed by the authority and against which an appeal is sought to be preferred. The

¶15

contention on behalf of the petitioner is that since the very liability of the petitioner to the demand of tax in the transaction covered by the agreement between himself and the APSRTC regarding lease of his vehicles to the later Corporation is challenged by him, there is neither an admitted liability nor there exists a difference between an admitted and not admitted liability.

¶16

The above contention as earlier stated is misconceived. On a true and fair construction of the phraseology of the second proviso to Section 31 of the Act, it is clear that the amount of tax, penalty, interest or any other amount that is assessed is liable to be deposited by an appellant towards the amount of tax, penalty, interest or any other amount which is admitted to be due by an appellant. Where an appellant does not dispute his liability to any part of a tax, penalty, interest or any other amount assessed under an order passed or proceeding recorded under the provisions of the Act other than an order passed or proceeding recorded by an Additional, Joint or Deputy Commissioner such amount of the undisputed tax, penalty, interest or any other amount must be deposited in toto before availing a right to an appellate remedy.

¶17

The second facet of the second proviso enjoins payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount assessed by the authority prescribed and the tax, penalty, interest or any other amount admitted by the appellant. This clause of the second proviso operates in situations where an appeal is preferred aggrieved by only a part of the Assessment order. In such situations an appellant would be liable to pay the entirety of the tax, penalty, interest or any other amount which is admitted while depositing twelve and half percent of the disputed component of tax, penalty, interest or any other amount assessed.

¶18

The true intention of the second proviso to Section 31, relevant

¶19

to the facts and circumstances of the case is that since the petitionerappellant is disputing his liability to tax, the consequent penalty and the interest on the tax liability so assessed in entirety, he is required to deposit twelve and half percent of the assessed liability. The contention to the contrary urged on behalf of the petitioner is misconceived.

¶20

On the aforesaid analysis, the several writ petitions are without merit or force and are liable to be rejected.

¶21

Sri C. Raghu, learned counsel for the petitioner in the circumstances seeks time for the petitioners to deposit 12.5% of the tax, penalty and interest, as assessed by the orders of Assessment.

¶22

We consider it appropriate to grant each of the petitioners a time of two weeks from the date of receipt of a copy of this order, to deposit the amount liable to be deposited under the second proviso to Section 31 of the Act. If the amount liable to be deposited is not deposited within the time granted herein, the first respondent shall be at liberty to return the appeals as incompetently instituted.

¶23

The writ petitions are accordingly dismissed at the stage of admission. In the circumstances however, there shall be no order as to costs.

¶24

JUSTICE GODA RAGHURAM

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Date: 08.10.2012

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JUSTICE M.S.RAMACHANDRA RAO

¶27

¶28

THE HON’BLE SRI JUSTICE GODA RAGHURAM AND

¶29

THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO

¶30

WRIT PETITION Nos.31170, 31289, 31333 and 31334 of 2012 (order of the Bench delivered by the Hon’ble Sri Justice Goda Raghuram)

¶31

Date: 08.10.2012

¶32

S.Pitchi Reddy, v. Appellate Deputy Commissioner (Ct)

Case brief

What is this about?

What did the court decide?

S.Pitchi Reddy, v. Appellate Deputy Commissioner (Ct)

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

Statutes considered

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