Ganesh Traders vs Deputy Commercial Tax Officer, Saroornagar, Hyderabad and Another

K.M. Agarwal, J.—By this petition under article 226 of the Constitution, the petitioner seeks a direction to the respondents to refund the amount of Rs. 34,152, realised towards tax and penalty and incidental charges by coercive method, pursuant to the appellant order February 17, 1994, together with a further sum of Rs. 11,635 towards the alleged cost and damages.

The petitioner is a registered dealer under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 (in short "the Act"), carrying on business at Begum Bazar, Hyderabad. On July 31, 1993, the 2nd respondent checked the lorry carrying 123 bags of groundnut seeds from Chittoor to Hyderabad and demanded cash security to the extent of Rs. 34,150 representing tax and penalty as per section 29(3) of the Act on the assumption that there was an attempt to evade the tax. On failure to pay the demanded tax and penalty, 35 bags of groundnut seeds were detained by the 2nd respondent in the purported exercise of his powers u/s 29(6) of the Act, and thereafter sold in public auction on October 8, 1993, by the 1st respondent after due notice to the petitioner. Out of the sale proceeds of Rs. 37,000, a sum of Rs. 34,152 was retained towards the tax and penalty, including the incidental charges of Rs. 200. The balance amount was refunded to the petitioner. In appeal by the petitioner, the Appellate Deputy Commissioner (CT), Panjagutta Division, quashed the aforesaid demand of tax and penalty by his order dated February 17, 1994, Although the order was received by the 1st respondent on March 22, 1994, no refund was made to the petitioner pursuant to the said order in spite of its letter dated April 2, 1994, addressed to the respondents. The petitioner has, therefore, approached this Court with its said petition for the said reliefs.

It was not disputed that the appellate order dated February 17, 1994, passed by the Appellate Deputy Commissioner (CT), Hyderabad, was restricted to the amount of Rs. 34,152, which was realised by way of tax and penalty as per section 29(6) of the Act, and that in pursuance of the appellate order, the petitioner was entitled to a refund of the said amount within the period of two months from the date of communication of the order to the assessing authority as provided under rule 35 of the Rules framed under the Act. However, the learned Government Pleader for Commercial Taxes opposed the petition, inter alia, on the ground that u/s 33-C of the Act, the assessing authority had power to withhold a refund with the previous approval of the Deputy Commissioner.

Section 33-C of the Act reads as follows :

"33-C. Power to withhold refund in certain cases. - Where an order giving rise to a refund to an assessee or licensee is the subject-matter of an appeal or further proceeding, or where any other proceeding under this Act is pending, and the assessing or the licensing authority is of the opinion that the grant of the refund is likely to adversely affect the revenue, the assessing or the licensing authority may, with the previous approval of the Deputy Commissioner, withhold the refund till such time as the Deputy Commissioner may determine."

A careful reading of the said provision would reveal that the power of withholding the refund could be exercised only in such cases where an order giving rise to a refund to an assessee is the subject-matter of a pending appeal or any further proceeding under the Act. In the present case, it cannot be disputed that the appellate order giving rise to a refund to the assessee is not a subject-matter of any appeal or further proceeding under the Act. The recommendation made by the Deputy Commissioner to the Commissioner of Commercial Taxes or any other authority to exercise suo motu power of revision u/s 20 of the Act cannot be said to be any such proceeding as is contemplated u/s 33-C of the Act. Assuming that the said recommendation for taking up the case in revision u/s 20 of the Act is a proceeding contemplated u/s 33-C of the Act, we find that no such order for withholding the refund has been made by the assessing authority in the present case. The 2nd respondent, i.e., the Assistant Commercial Tax Officer (Intelligence) is not the assessing authority. He is only vested with the powers u/s 29 of the Act and the assessing authority, as noted in the appellate order, is the Commercial Tax Officer, Hyderabad Rural Division. The powers u/s 33-C can be exercised only by the assessing authority. Under these circumstances, we are of the view that the petitioner could not denied the refund on the ground that the department was contemplating to take up the case in revision against the appellate order dated February 17, 1994, giving rise to a refund to the petitioner. On this ground alone, the petition deserves to be allowed. As held in Vijayadurga Rice Mill Vs. Commercial Tax Officer, Narsaraopet, , the intention of rule 35 is that without waiting for the period during which power of revision can be exercised, the assessing authority has to give effect to the order passed in appeal. Accordingly, we are of the view that the respondents cannot withhold the amount on the ground that the department was contemplating to take up the matter in revision against the appellate order dated February 17, 1994.

For the reasons aforesaid, we do not feel it necessary to consider other arguments made on behalf of the respondents, while opposing the petition. However, as there was no order for payment of additional amount of Rs. 11,635 towards the alleged cost and damages from any competent authority or a court, no direction for payment of this amount to the petitioner can be made in these proceedings under article 226 of the Constitution.

In the result, this petition partly succeeds and it is hereby partly allowed. The respondents are directed to refund the amount of Rs. 34,152 to the petitioner pursuant to the order dated February 17, 1994, made in appeal by the Appellate Deputy Commissioner (CT), Panjagutta Division, within fifteen days from the date of receipt of this order. We also direct the respondents to pay costs of this petition to the petitioner. Counsel''s fee Rs. 250, if already certified.

Writ petition partly allowed.