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Judgment
G. Rohini, J.—The petitioner''s application u/s 32(5) of A.P. Value Added Tax Act, 2005 seeking deferment of the assessment proposed for the tax period April, 2010 to March, 2011 was rejected by the 1st respondent-the Commissioner of Commercial Taxes, Hyderabad, by order dated 27.06.2013. Aggrieved by the same, the present writ petition is filed. We have heard Sri K. Raji Reddy, the learned counsel for the petitioner and the learned Special Standing Counsel for Commercial Taxes appearing for the respondents.
As could be seen from the material available on record, the petitioner was assessed for the tax period 2006-07 to 2009-10 by order dated 28.04.2011 and a demand for Rs. 15,41,30,645/- was raised on the ground that supply by agents of the petitioner to the foreign going vessels constitute sale and that the petitioner is not entitled to claim input VAT credit as it is not a registered dealer under the provisions of A.P. VAT Act, 2005. Challenging the said order of assessment, the petitioner filed W.P. No. 23732 of 2011. The said writ petition is pending on the file of this Court and the interim stay granted by this Court is in operation. Contending that the question of law involved in W.P. No. 23732 of 2011 has a direct bearing on the assessment proposed for the tax period 2010-11, the petitioner sought determent of assessment by making an application u/s 32(5) of the A.P. VAT Act. The said application was initially disposed of by the 1st respondent by order dated 23.01.2013 directing deferment till the disposal of W.P. No. 23732 of 2011 subject to the petitioner furnishing Bank guarantee for 50% of the tax proposed i.e., Rs. 1,52,03,321/- on or before 15.02.2013. Aggrieved by the condition so imposed, the petitioner filed W.P. No. 4516 of 2013. The said writ petition was disposed of by this Court by order dated 18.02.2013 holding that the impugned order super-adding a condition calling upon the petitioner to furnish a Bank guarantee for a liability yet to be assessed constitutes an irrational exercise of discretion.
Thus, this Court set aside the 1st respondent''s order dated 23.01.2013 insofar as it imposed the condition of furnishing a Bank guarantee and the matter was remitted to the 1st respondent for passing a fresh order exercising the discretion u/s 32(5) in conformity with the observations in the said order.
Thereafter, the following order dated 27.6.2013 came to be passed rejecting the petitioner''s request for deferment.
The contentions of the Authorized Representative are examined carefully. The Assistant Commissioner (CT) issued notice for assessment of tax of Rs. 1,52,03,321/- for the year 2010-11 because the assessee-company has not produced the books of accounts for verification before initiating assessment proceedings; and therefore based on the material communicated by the RV & EO and also from the oil companies assessment was proposed.
The Section 32(5) of AP VAT Act, 2005 says "It shall be lawful for the Commissioner to defer any proceeding under this section by the reason of the fact that an appeal or other proceeding is pending before the Appellate Tribunal or the High Court or the Supreme Court involving a question of law having a direct bearing on the order of proceeding in question."
Though the issue involved is same, as in W.P. No. 23732/2011, before the Hon''ble High Court of Andhra Pradesh, in the interest of Government revenue the undersigned is not inclined to exercise discretion to defer the assessment for the year 2010-11, as proposed by the Assistant Commissioner (CT), LTU, Visakhapatnam, u/s 21(7) read with Section 32(5) of AP VAT Act, 2005.
Accordingly, the petitioner-assessee''s request for deferment of assessment for the year 2010-11 as proposed by the Assistant Commissioner (CT), LTU, Visakhapatnam division by notice dated 10.09.2012 is hereby rejected. The proceedings issued by the undersigned in CO No. 2/2013 in CCT''s Ref. No. LV(3)/223/2012, dated 23.01.2013 are deemed to have been withdrawn, and non est as per the orders of Hon''ble High Court in W.P. No. 4516/2013, dated 18.02.2013.
The said order of rejection dated 27.6.2013 is assailed before us in this writ petition contending inter alia that the 1st respondent had exceeded the jurisdiction conferred on him u/s 32(5) of the A.P. VAT Act in rejecting the deferment petition.
u/s 32(5) of the A.P. VAT Act, the Commissioner is vested with a discretion to defer any proceedings by the reason of the fact that an appeal or other proceedings is pending before the Appellate Tribunal or the High Court or the Supreme Court involving the question of law having a direct bearing on the order or proceeding in question.
The specific plea of the petitioner is that the question of law involved in W.P. No. 23732 of 2011 i.e., whether the supplies made by the agents of the petitioner to the foreign going vessel are sales and are exigible to tax under the A.P. VAT Act in the hands of the petitioner and whether the petitioner is entitled to claim input VAT credit, has a direct bearing on the assessment proceedings initiated for the tax period 2010-11. Therefore, according to the petitioner, the proposed assessment for the tax period 2010-11 has to be deferred till W.P. No. 23732 of 2011 is disposed of.
By the impugned order, the 1st respondent has in fact admitted that the issue involved in the proposed amendment is same as in W.P. No. 23732 of 2011. However, the petitioner''s request for deferment was rejected on the sole ground that it is not in the interest of the Government revenue.
Relying upon the observations made by this Court in W.P. No. 4516/2013 it is vehemently contended by the learned counsel for the petitioner that it is not open to the respondent to reject the request for deferent on the ground that it would cause prejudice to the Government revenue.
On the other hand the learned Special Standing Counsel for Commercial Taxes while referring to the counter-affidavit filed on behalf of the respondents wherein it is explained that the petitioner company does not have any place of business or office in the State of Andhra Pradesh and that it is carrying on the business without getting himself registered as a (sic) therefore it is very difficult for the Revenue to trace the petitioner (sic) the amounts due if any, sought to justify the impugned order. The learned Standing Counsel further contended that in the facts and circumstances of the case the Commissioner has rightly rejected the petitioner''s request for deferment in exercise of the discretion conferred u/s 32(5).
At the outset, it is to be noticed that except observing that he is not inclined to exercise the discretion to defer the assessment proceedings in the interest of the Government revenue, the 1st respondent did not assign any reasons in the impugned order.
The law is well settled that the validity of an order made by a statutory functionary must be judged by the reasons mentioned therein, but cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Therefore, we are not inclined to accept the reasons sought to be explained in the counter-affidavit.
It is also relevant to note that while considering the correctness of the earlier order passed by the 1st respondent in directing the petitioner to furnish a Bank Guarantee as a condition for deferment of proceedings, this Court held in W.P. No. 4516 of 2013 as under:
The impugned order passed by the 1st respondent directing the petitioner to furnish a bank guarantee is destructive of the purpose for which power and discretion is conferred u/s 32(5) of the Act. This provision enables the 1st respondent to defer any proceedings on the ground that an appeal or other proceedings are pending before the Appellate Tribunal or the High Court or the Supreme Court involving a question of law having a direct bearing on the order or proceeding in question. Sub-section (6) of Section 32 extends the period of limitation for passing an Order of Assessment pro-tanto the period for which a deferment is ordered u/s 32(5) of the Act. In the circumstances, there is no prejudice caused to the Revenue by deferment of proceedings and in fact the provision is incorporated to facilitate a uniform and coherent tax administration policy i.e., to proceed with the Assessment in conformity with guidance received from the orders of an Appellate Tribunal, the High Court or the Supreme Court, as the case may be, on matters involving identical or substantially similar questions of law.
(emphasis supplied).
There was also a direction by this Court to the 1st respondent to pass a fresh order in conformity with the above observations.
Under the circumstances, we find force in the submission of the learned counsel for the petitioner that the impugned order in fact runs contrary to the directions of this Court. It also appears to us that the impugned order does not reflect the discretion required to be exercised u/s 32(5) of the A.P. VAT Act.
For the aforesaid reasons, the impugned order is hereby set aside and the Writ Petition is disposed of with a direction to the 1st respondent to pass an appropriate order afresh strictly in the light of the observations made in W.P. No. 4516/2013. No costs. Consequently the miscellaneous petitions, if any, pending in the writ petition shall stand closed.