Allowed

M/s. Regal Plywood Industries (P) Ltd., v. The Additional Commissioner (Ct) (Legal)

Telangana HC5 Feb 2013WP/2782/2013

Case brief

AI extract

What is this about?

A company challenged a notice demanding recovery of full disputed tax after failing to meet a 1/3rd payment deadline due to financial hardship. The court held the default was not willful. It extended the deadline and quashed the notice to protect the pending appeal, allowing the writ petition.

What did the court decide?

The time granted for payment extended from 15-01-2013 to 23-01-2013; the notice dated 23-01-2013 quashed; writ allowed.

M/s. Regal Plywood Industries (P) Ltd., Vs The… — Writ and Judicial Review | Telangana HC (2013)

¶1

HONOURABLE SRI JUSTICE GODA RAGHURAM

¶2

AND

¶3

HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO

¶4

W.P.No.2782 of 2013

¶5

ORDER:

¶6

(Per Hon’ble Sri Justice M.S.Ramachandra Rao)

¶7

This writ petition is filed challenging the order dated 04-01-2013 passed by the 1^st respondent in C.C.T’s Ref. No.LV (3)/219/2012 for the assessment year 2008-09 (CST) and the consequential notice dated 23-01-2013 issued by the 3^rd respondent in R.C.No.904/2013.

¶8

2. The petitioner is a private limited company incorporated under the Company’s Act, 1956. It is engaged in the manufacture and sale/purchase of various kinds of plywood/veneers and timber. It is a registered dealer on the rolls of the 3^rd respondent.

¶9

3. In respect of the turnover of the petitioner for the assessment year 2008-09 under the Central Sales Tax Act, 1956, the 3^rd respondent passed an assessment order dated 13-06-2012. Aggrieved thereby, the petitioner preferred an appeal along with stay petition before the 2^nd respondent. By order dated 19-10-2012, he rejected the stay petition filed by the petitioner for stay of collection of disputed tax pending disposal of the appeal by the 2^nd respondent.

¶10

4. Aggrieved thereby, the petitioner filed a revision stay petition before the 1^st respondent for stay of collection of disputed tax pending disposal of appeal by the 2^nd respondent.

¶11

5. By order 04-01-2013, the 1^st respondent passed a conditional order granting stay of collection of 1/3^rd of the disputed tax on condition of the petitioner paying 2/3^rd of the disputed tax on or before 15-01-2013.

¶12

6. The total disputed tax in the appeal is Rs.36,06,053/-. Out of such disputed tax, the petitioner paid Rs.20.00 lakhs before

¶13

15-01-2013. 2/3^rd of the disputed tax would come to Rs.24.00 lakhs. In view of financial difficulties, the petitioner paid the balance of Rs.4.00 lakhs on 23-012013 i.e. after 15-01-2013 and could not pay the entire Rs.24.00 lakhs before 15-01-2013.

¶14

7. In view of the fact that the petitioner had failed to comply with the order dated 04-01-2013 passed by the 1^st respondent within the time stipulated, the 3^rd respondent issued notice dated 23-01-2013 directing the petitioner to pay the balance of Rs.16,03,359/- of tax on the ground that the petitioner had paid only Rs.20.00 lakhs.

¶15

8. Assailing the same, the petitioner has filed the present writ petition.

¶16

9. Heard Smt.Anjali Agarwal, learned counsel for the petitioner and Sri Balaji Varma, learned Special Government Pleader for Taxes.

¶17

10. The learned counsel for the petitioner submits that on account of financial difficulties, there was a delay of one week only in complying with the order dated 04-01-2013 of the 1^st respondent; that instead of paying Rs.24.00 lakhs before 15-01-2013, the petitioner had paid Rs.20.00 lakhs before 15-01-2013 and Rs.4.00 lakhs on

¶18

23-01-2013; that the respondents cannot penalize the petitioner by treating it as a defaulter and demanding the total tax of Rs.36,06,053/- and attempting to coerce the petitioner to pay it. She contends that the petitioner has a strong case in the appeal pending before the 2^nd respondent and the appeal cannot be rendered infructuous by recovering the total disputed tax before the appeal is decided.

¶19

11. The learned Special Government Pleader contends that the order 04-01-2013 was not complied with by the petitioner within the time stipulated and there is no power vested with the 1^st respondent to grant further time as sought by the petitioner and therefore there is no illegality in seeking to recover the total disputed tax from the petitioner on the default in complying with the conditional order dated 04-01-2013 of the 1^st respondent.

¶20

12. Admittedly the petitioner had challenged the order of assessment dated 13-06-2012 passed by the 3^rd respondent before the 2^nd respondent and the substantive appeal is still pending before the said authority. Although the 2^nd respondent had rejected the stay petition filed by the petitioner on 19-10-2012, the petitioner had filed revision stay petition before the 1^st respondent who passed a conditional order dated 04-012013 directing the petitioner to pay 2/3^rd of the disputed tax of Rs.36,06,053/- on or before 15-01-2013. Owing to financial difficulties the petitioner paid Rs.20.00 lakhs before 15-01-2013 and the balance of Rs.4.00 lakhs on 23-01-2013 i.e. after 15-01-2013 and could not pay the entire Rs.24.00 lakhs before 15-01-2013.

¶21

13. In the facts and circumstances of the case, it cannot be said that the default of the petitioner in complying with the conditional order dated 04-01-2013 passed by the 1^st respondent is willful. In the interest of justice, we are of the view that it is just and necessary to extend the time granted by the 1^st respondent in the impugned order dated 04-01-2013 for compliance by the petitioner from 15-01-2013 to 23-01-2013 as it would be unjust to compel the petitioner to pay the total disputed tax when its substantive appeal is yet to be considered by the 2^nd respondent.

¶22

14. Therefore the time granted by the 1^st

¶23

respondent in the order dated 04-01-2013 to pay 2/3^rd of the disputed tax i.e. Rs.24.00 lakhs shall stand extended from 15-01-2013 to 23-01-2013 and consequently the impugned notice dated 23-01-2013 is quashed.

¶24

15. The writ petition is allowed to the extent indicated above. No cost.

¶25

____________________________ JUSTICE GODA RAGHURAM

¶26

__________________________________ JUSTICE M.S.RAMACHANDRA RAO Date: 05-02-2013 Kvr

M/s. Regal Plywood Industries (P) Ltd., v. The Additional Commissioner (Ct) (Legal)

Case brief

What is this about?

What did the court decide?

M/s. Regal Plywood Industries (P) Ltd., v. The Additional Commissioner (Ct) (Legal)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

M/s. The Punganur Cold Storage Pvt. Ltd. Vs The Commercial Tax Officer

M/s. Facor Alloys Limited, Vs Superintendent

M/s. Patel Engineering Limited, Vs The Union of India, Rep. by its Secretary

M/s. The India Cements Ltd. Vs The Commissioner of Central Excise

M/s. Aditya Engineers and Technicians Vs The Assistant Commissioner (Ct) - Audit

G. Chandraiah Died his L.Rs. Vs Municipal Commissioner