Sri Srinivasa Traders vs Commercial Tax Officer, Jadcherla, Mahaboobnagar District and Others

S. Parvatha Rao, J.—This writ petition has been preferred seeking a writ of certiorari, etc., quashing the notice dated October 10, 1995, issued by the first respondent, i.e., the Commercial Tax Officer, Jadcherla, Mahaboobnagar District, to the petitioner, a partnership-firm, requiring it to pay a sum of Rs. 80,000 within seven days from the date of receipt of the said notice.

The reason for the notice has been stated therein as "that the cheque bearing No. 238352, dated July 13, 1995 for an amount of Rs. 80,000 towards tax estimated on forty way bills which were lost issued by them (the petitioner) has been presented in the bank on July 24, 1995 by the A.C.T.O., Nagarkurnool" and that the said cheque was returned back stating that the payment had been stopped by the drawer on July 24, 1995.

The undisputed facts are that the way bill book issued to the petitioner was lost on January 6, 1995 and inspite of efforts made to find it, it was not found. A complaint was lodged by the petitioner before the Station House Officer, Nagarkurnool on January 9, 1995 and the petitioner informed the first respondent of the said loss on January 19, 1995. The petitioner was required to furnish bank guarantee and accordingly the petitioner furnished bank guarantee No. 1/95 dated February 4, 1995 of the State Bank of Hyderabad, Nagarkurnool for Rs. 80,000 in favour of the first respondent and the said bank guarantee is valid for one year, i.e., up to February 3, 1996. In addition the petitioner also gave indemnity bond dated February 16, 1995. Subsequently, on July 13, 1995 certain authorities of the Commercial Tax Department coercively collected a cheque dated July 13, 1995 drawn on State Bank of India, Nagarkurnool, in favour of the first respondent for Rs. 80,000 towards the estimated tax in respect of the way bills which were lost, despite the protestations on behalf of the petitioner. The petitioner complains that there was no warrant whatsoever or authority of law for collection of the said cheque. The petitioner instructed the bank to stop the said cheque and thereafter the petitioner received the impugned notice.

In the counter-affidavit it is not disputed that no such amount is due and payable by the petitioner to the department on the basis of any assessment or on any other basis. It is also not the case of the respondents that it was discovered that any of the way bills that were lost by the petitioner were mussed by anyone on the basis of which the Commercial Tax Department incurred any loss. Under the circumstances, it is obvious that the demand made is highhanded, arbitrary and without any pretence of authority of law. It is unfortunate that the respondents seek to justify on the basis of the misuse of way bills by some dealers in general and not by the petitioner; but that cannot form the basis for the present visitation on the petitioner by the respondents.

In the circumstances, the writ petition has to be allowed and accordingly it is allowed with costs. The respondents shall also pay a further sum of Rs. 1,000 towards exemplary costs in view of the manner in which power is sought to be exercised by them arbitrarily, without any semblance of legality and in gross violation of the rule of law.

Writ petition allowed.