NSL Krishnaveni Sugars Limited vs Government of Telangana and Others

R. Subhash Reddy, J.—This writ petition is filed seeking Mandamus to declare the proceedings dated 24.5.2014 issued by the 3rd respondent demanding the petitioner to pay tax for the period 2010-11 and 2012-13 as arbitrary, illegal and contrary to the provisions of the A.P. Tax on Entry of Motor Vehicles into Local Areas Act, 1996 and consequently to set aside the same as null and void by declaring that the Sugar Cane Harvester Machines are not liable to entry tax under the provisions of the said Act and also under the A.P. Motor Vehicles Taxation Act, 1963. The petitioner is a company registered under the provisions of the Companies Act, 1956. It is a registered dealer on the rolls of the 4th respondent, both under the provisions of the Central Sales Tax Act, 1956 and A.P. Value Added Tax Act, 2005, and engaged in the business of manufacture of Sugar, Molases and Rectified Spirit. The petitioner has purchased Sugar Cane Harvester Machines and Sugar Cane Infielder Trolley from M/s. New Holland Fiat India Private Limited, Pune and M/s. Tans Mech Systems, Pune, during the period from 15.2.2011 to 28.4.2012, incurring an amount of Rs. 4,43,30,000/-. The said machines are being used by the petitioner in sugar cane fields and do not carry any loads on the roads.

The 3rd respondent-Assistant Commissioner-I (CT), Enforcement Wing, attached to the office of Commissioner of Commercial Taxes, Hyderabad, has passed the impugned assessment order dated 24.5.2014 on the ground that on examination of the company records, the correct amounts of Entry Tax have not been declared by the petitioner and demanded to pay a tax of Rs. 41,44,470/- for the period from 2010-11 to 2012-13 under the provisions of the A.P. Entry Tax Act, 1996.

The said order is questioned on several grounds, including the ground that the Assistant Commissioner, who issued the impugned assessment order, is not competent and authorized to pass such order under the provisions of A.P. Tax on Entry of Motor Vehicles into Local Areas Act, 1996 (for brevity "the Act") and the Notification-I issued thereunder.

When the matter was taken up for hearing on earlier occasion, it was adjourned to enable the learned Government Pleader for Commercial Taxes to verify whether any Notification is issued other than the Notification issued in G.O.Ms. No. 680, Revenue (CT-II) Department, dated 12.8.1997.

Today, when the matter is taken up for hearing, the learned Special Standing Counsel for Commercial Taxes appearing for the respondents submits that no further Notification other than the Notification issued under G.O.Ms. No. 680, dated 12.8.1997, was issued. However, he relied on a judgment rendered by Kerala High Court in T.M. Kuruvilla Vs. Asst. Commissioner (Assessment) IV, Commercial Taxes, ., and contended that it is only a technical lapse on the part of the respondents and the same may not be a ground to set aside the impugned order.

Sections 5 and 6 under Chapter-III of the Act prescribe the Assessing and Appellate Authorities. Under Section 5 of the Act, the Government is empowered to issue Notification appointing the officers of Commercial Taxes Department, not below the rank of Deputy Commercial Tax Officer, to be the assessing authority for the purposes of the Act and may assign to them such local area or areas as may be specified in such Notification. In exercise of the powers under Section 5, the Government has issued Notification in G.O.Ms. No. 680, dated 12.8.1997. The said Notification reads as under:

"G.O.Ms. No. 680, Revenue (CT-II) Department, dated 12.8.1997

NOTIFICATION-I

In exercise of the powers conferred by Section 5 of the Andhra Pradesh Tax on Entry of Motor Vehicles into Local Areas Act, 1996 (Andhra Pradesh Act No. 26 of 1996), the Governor of Andhra Pradesh hereby appoints the Commercial Tax Officers to exercise the powers and perform the functions of assessing authority under the said Act and the rules made thereunder within their respective jurisdictions as notified under the Andhra Pradesh General Sales Tax Act, 1957 (Andhra Pradesh Act No. VI of 1957)."

From a perusal of Section 5 of the Act and the Notification issued in G.O.Ms. No. 680, dated 12.8.1997, it is clear that the Government has notified appointing only the Commercial Tax Officers to exercise the powers and perform the functions of assessing authorities under the provisions of the Act. The very power of the assessing authority is traceable to the Notification, which was issued in exercise of powers under Section 5 of the Act.

In that view of the matter, we are unable to accept the argument advanced by the learned Special Standing Counsel that it is only a technical lapse. Having regard to the specific Notification issued in G.O.Ms. No. 680, dated 12.8.1997, under Section 5 of the Act, the judgment rendered by the Kerala High Court is of no assistance to support the argument advanced on behalf of the respondents.

Since it is clear that the impugned order dated 24.5.2014 is passed by the Assistant Commissioner-I (CT), Enforcement Wing, who is not competent and authorized to exercise the powers as per the Notification issued by the Government in G.O.Ms. No. 680, dated 12.8.1997, without going into the merits of the case, we deem it appropriate to set aside the impugned order only on the aforesaid ground.

Accordingly, this writ petition is allowed, setting aside the impugned order dated 24.5.2014. It is needless to observe that this order will not preclude the competent authority from exercising power and passing appropriate orders in accordance with law. No order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed.