Wimco Limited vs Commercial Tax Officer and others

P. Venkatarama Reddi, J.—This writ petition is filed questioning the order dated 17-2-1998 passed by the 6th respondent (Joint Commissioner (CT) (Legal) as illegal and without jurisdiction. By the aforementioned order, the Joint Commissioner modified the orders passed earlier on 2-2-1998 and vacated the conditional order to stay of collection of penalty granted therein. By the order dated 2-2-1998, the 6th respondent granted stay of collection of penalty pending disposal of the appeal by the Sales Tax Appellate Tribunal on condition of the petitioner paying an amount of Rs. 3,06,5 79/- which works out to an amount equivalent to the quantum of tax by 25th March, 1998. The penalty at five times the differential tax came to be levied under Sec.5-B(2) of the AP. General Sales Tax Act for the alleged misuse of G-Forms. That order was confirmed in appeal by the 5th respondent. Thereafter, a second appeal was filed before (he Tribunal. Pending the disposal of appeal by the Tribunal, the petitioner sought stay of collection of penalty by filing an application before the Joint Commissioner as required by law. On hearing the stay application, the Joint Commissioner granted stay on 2-2-1998 subject to the condition adverted to above.

On receiving a report from the Commercial Tax Officer on 4-2-1998 that a cheque was issued by the Petitioner-Company on 31-1 -1998 for the entire amount of penalty of Rs.15.32 lakhs and that the same was presented to the Bank on the same day, the matter was re-opened by the Joint Commissioner and after giving an opportunity of hearing the present impugned order was passed on 17-2-1998 withdrawing the stay granted earlier. The Joint Commissioner observed that the factum of issuing the cheque ought to have been brought to his notice when the slay application was heard on 2-2-1998 and moreover the question of granting stay does not arise when once the cheque for the entire amount has already been issued to the Department.

It is to be noticed that while issuing the cheque, the petitioner addressed a covering letter in which it was made clear that the stay petition would be coming up for hearing on the same day and the cheque may be returned if the stay was granted. After the slay order was granted on 2-2-1998, the petitioner addressed the Bank to slop payment. It is the contention of the petitioner that the cheque was issued by reason of pressure exerted on them by the Commercial Tax Officer and that the cheque was issued without prejudice lo their request for stay.

The learned Counsel for the petitioner submits that when once the stay order was issued, it was not open to the Joint Commissioner to revise that order and vacate the stay. We do not think that there is any such absolute bar against the revocation of stay order once issued, though, we would like to observe that such power cannot be exercised lightly and in a routine manner based on a change of view. Here is a case in which the assessee failed to disclose a material fact to the Joint Commissioner with regard to issuance of cheque. This material information should not have been withheld from the knowledge of the Joint Commissioner. The explanation sought to be given by the petitioner that there was a communication gap between the petitioner and its Advocate, is difficult to accept. The deponent of the affidavit which was filed before the Joint Commissioner did not state the circumstances in which this crucial information was not passed on to their Advocate. The conduct of the petitioner is, therefore, not beyond reproach and it does not lie in the mouth of the petitioner to say that the Joint Commissioner should not have reopened the matter. At the same lime, the reasoning of the Joint Commissioner that the issuance of cheque disentitles the petitioner for interim relief does not appeal to us. We have every'' reason to think that the cheque was issued despite the pendency of the slay application on account of the pressure exerted by the concerned authority. In any case a categorical request was incorporated in the covering letter that the cheque may be returned if the stay order is granted. Thus, the lender of the amount was not uncondilional. This aspect was not taken into account by the learned Joint Commissioner while passing the impugned order dated 17-2-1998.

Having regard to all these facts and circumstances and having regard to the further fact that what is disputed is not tax but penalty, that too levied at the maximum of five times, we are inclined to dispose of the writ petition with the following directions instead of again remitting the matter to the Joint Commissioner.

On condition of the petitioner paying a sum of Rs.5 lakhs (Rupees Five lakhs only) towards the disputed penalty within a period of two weeks, the cheque already issued by the petitioner should not be encashed and no further steps should be taken for the recovery of the disputed penalty, pending disposal of the appeal by the Sales Tax Appellate Tribunal.

The writ petition is accordingly disposed of No costs.