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Judgment
S.C. Pratap, C.J.—By this writ petition under article 226 of the Constitution the petitioners seek to challenge the legality and validity the impugned notice dated 5th August, 1991, issued by the second respondent - Assistant Commercial Tax Officer, calling upon the petitioners to pay the arrears of sales tax dues in the sum of Rs. 1,38,995, and further informing the petitioners that till the said dues are cleared, registration certificate under the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act") cannot be issued.
In the midst of contentions advanced by the petitioner''s learned counsel, he submitted that the petitioners are now ready and willing to pay the entire sales tax dues as per the aforesaid demand, but requests that reasonable instalments may be granted in that behalf. Counsel appearing for the second respondent - Assistant Commercial Tax Officer submits that if the sale tax dues of the State are paid, there will be no objection to grant to the petitioner''s registration certificate under the Act. On the question of instalments, counsel for the second respondent has left it to the court, but submitted that the same should be reasonable so as cover the entire demand within a reasonable period. He further submitted that if instalments are granted, the same should be made subject to terms and conditions with a default clause.
Considering all aspects of the matter and particularly the fact that the petitioners are auction purchasers and not primarily liable to pay arrears of sales tax dues and primary liability in which behalf was that of a third party - M/s. Rajeswari Paper Mills Pvt. Ltd., but which liability stands transferred or passed on the petitioners by virtue of section 18 of the Act read with sub-section (2) of section 29 of the State Finance Corporation Act, 1951, and further considering that the petitioners'' business is being held up for want of registration certificate, along with the counsel''s contention that though purchasers are there for the goods of the petitioners, they are unable to enter into legal and beneficial transactions for want of registration certificate, we are inclined to grant to the petitioners liberty to pay the entire arrears of sales tax by instalments as per the final order below and on terms and conditions noted therein with a default clause embodied.
The petitioners, through their learned counsel, give an undertaking to this Court to the effect that they undertake to pay the aforesaid entire amount covered by the impugned demand notice relating to arrears of sales tax by the such instalments as this Court may direct with a further condition that in the event of default, the registration certificate itself would be liable to be cancelled. This undertaking is accepted by this Court.
In the result the following order is passed on this petition :
(a) The petitioners are directed to pay to the second respondent - Assistant Commercial Tax Officer, Basheerbagh, Hyderabed, the full amount of Rs. 1,38,995 covered by the demand notice dated 5th August, 1991, by monthly instalments of Rs. 20,000 (rupees twenty thousand only) each with the last instalment being for the entire balance then remaining due and payable. The first of such instalment of Rs. 20,000 shall be payable by the end of October, 1991 and each subsequent instalment in the said sum of Rs. 20,000 shall be payable by the end of each succeeding month. The last instalment being for the entire balance then due and payable.
(b) In the event of the petitioner committing any single default in payment of the aforesaid instalments, the second respondent will then be at liberty to forthwith cancel the registration certificate and also to forthwith proceed to recover the entire balance then due in accordance with law.
(c) In view of the petitioners'' undertaking to pay the aforesaid amount as directed by this Court and acceptance of the condition of cancellation of registration certificate as directed above with liberty to the second respondent to then proceed to recover the entire balance then due in accordance with law, we direct the second respondent to issue in favour of the petitioners latest by Tuesday, 1st October, 1991, registration certificate u/s 12 of the Andhra Pradesh General Sales Tax Act.
(d) This order does not affect the petitioners'' liability in law to pay current sales tax as and when the same falls due.
(e) This order is without prejudice to the right, if any, of the petitioners to recover the arrears of sales tax dues, which the petitioners would under this order be paying to the second respondent, from the original owner. This order is also without prejudice to the right of the second respondent to recover, if so advised, the arrears or sales tax dues from the original owner in accordance with law.
Order accordingly on this petition, which is thus disposed of. No order as to costs. Advocate''s fee Rs. 250.
Ordered accordingly.