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Adinarayana Corporation and ors. Vs. the Commercial Tax Officer, Anakapalle and anr. - Court Judgment

LegalCrystal Citation
SubjectSales Tax
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition Nos. 4776, 4819, 4820, 4864, 4865, 4866, 4867, 4868, 4869, 4870, 4876, 4878, 4879 and
Judge
Reported in[1984]56STC230(AP)
ActsAndhra Pradesh General Sales Tax Act - Sections 16(1) and 16(2)
AppellantAdinarayana Corporation and ors.
RespondentThe Commercial Tax Officer, Anakapalle and anr.
Appellant AdvocateP. Ramachandra Reddy, ;P. Venkatarama Reddy and ;D. Sreenivas, Advs.
Respondent AdvocateThe Government Pleader
Excerpt:
sales tax - installments - sections 16 (1) and 16 (2) of andhra pradesh general sales tax act - petition before high court to decide whether deputy commissioner of commercial taxes permitted petitioners to pay sales tax assessed in two or more installments - section 16 (2) empowers deputy commissioner to permit payment of tax due in installments - order under section 16 (2) was made and communicated to commercial tax officer - petitioners have a right to pay amount of tax assessed in installments - held, petition allowed and respondents restrained from collecting arrears of sales tax due from petitioners in lump sum. - - the order of the deputy commissioner is clearly a direction to the subordinate authorities to realise the arrears of sales tax in instalments......the memorandum of the government and the representations forwarded to him by the government to the deputy commissioner of commercial taxes through his letter no. liii(1)3365/81 dated 26th july, 1982, for taking necessary action to realise the arrears of sales tax relating to 1980-81 and 1981-82 in six half-yearly equal instalments commencing from 1st august, 1982. the deputy commissioner of commercial taxes, having received the said representations made by the petitioners and the copy of the memorandum of the government referred to above, addressed a letter in rc. no. 2288/76/a8 dated 3rd august, 1982, to the commercial tax officer, anakapalle, 'to realise the balances for 1980-81 and 1981-82 in six half-yearly instalments commencing from 1st august, 1982'. the deputy commissioner.....
Judgment:

Madhava Reddy, C.J.

1. In this batch of writ petitions, the main question that arises for consideration is whether the Deputy Commissioner of Commercial Taxes, Visakhapatnam, has permitted the petitioners to pay the sales tax assessed in two or more instalments within the meaning of section 16(2) of the Andhra Pradesh General Sales Tax Act (hereinafter referred to as 'the Act'), and whether, if he has granted such instalments, he can withdraw the same without issued any notice to the parties.

2. The petitioners herein are commission agents dealing in jaggery, advancing amounts to ryots for raising sugarcane crop and recovering the amounts advanced by adjusting the considerations received on sale of jaggery through their agents. It is their case that, on account of a slump in the market, they suffered huge losses and the ryots could not realise the amounts due to them and repay the amount advanced. In those circumstances, although they were assessed to pay sales tax on their turnover, they were not in a position to pay the same. In respect of the turnover relating to the assessment years 1980-81 and 1981-82, they made representations to the Commissioner of Commercial Taxes and to the Government to permit them to pay the tax in instalments. The Government, in its Memorandum No. 2771/S1/81-4 dated 22nd July, 1982, while forwarding the representations to the Commissioner of Commercial Taxes, requested him to allow the petitioners to pay the arrears of sales tax relating to 1980-81 and 1981-82 due as on 1st July, 1982, in six half-yearly equal instalments commencing from August, 1982. The Commissioner of Commercial Taxes, in turn, forwarded the memorandum of the Government and the representations forwarded to him by the Government to the Deputy Commissioner of Commercial Taxes through his letter No. LIII(1)3365/81 dated 26th July, 1982, for taking necessary action to realise the arrears of sales tax relating to 1980-81 and 1981-82 in six half-yearly equal instalments commencing from 1st August, 1982. The Deputy Commissioner of Commercial Taxes, having received the said representations made by the petitioners and the copy of the memorandum of the Government referred to above, addressed a letter in RC. No. 2288/76/A8 dated 3rd August, 1982, to the Commercial Tax Officer, Anakapalle, 'to realise the balances for 1980-81 and 1981-82 in six half-yearly instalments commencing from 1st August, 1982'. The Deputy Commissioner further requested him 'to submit a detailed report regarding the said balances and the amount of instalments along with particulars of due date and date of realisation'. Acting on the orders of the Deputy Commissioner, the Commercial Tax Officer proceeded to realise the arrears of sale tax due from the petitioners in eight half-yearly equal instalments. Five such instalments have been realised from the each of the petitioners and the balance of three instalments was due and payable. While so, the Commercial Tax Officer directed the petitioners by his notice dated 12th June, 1983, to pay the entire arrears of sales tax for the years 1980-81 and 1981-82 by the evening of 13th June, 1983, i.e., the very next day. It was also stated in the said notice that no further time would be granted. The notice was served on the petitioners on the afternoon of 13th June, 1983. Apprehending that pursuant to the said notice the Commercial Tax Officer and his subordinates would take drastic action to realise the arrears of sales tax due and resort to coercive methods, the petitioners have invoked the jurisdiction of this Court under article 226 of the Constitution of India for the issue of a writ of mandamus restraining the respondents from proceeding further pursuant to the impugned notice.

3. The sales tax assessed and found due is payable by a dealer within such time, not being less than fifteen days from the date of service of the notice of assessment as laid down in section 16(1) of the Act. Sub-section (2) of section 16, however, empowers the Deputy Commissioner to permit payment of the tax due in instalments. The said provision reads as follows :

'The Deputy Commissioner may, by general or special order, permit the payment of any tax or penalty, or both, assessed or levied under this Act in two or more instalments within such intervals as may be specified in the said order.'

4. If the communication of the Deputy Commissioner dated 3rd August, 1982, addressed to the Commercial Tax Officer constitutes an order within the meaning of section 16(2), then the petitioners have a right to pay the amount of tax assessed in instalments, for that order of the Deputy Commissioner has not been revised or set aside by any superior authority under the Act. In paragraph 6 of the counter-affidavit filed on behalf of the Government, it is stated :

'The matter of giving instalments raised a public controversy and it was a subject-matter of discussion in Andhra Pradesh Legislative Assembly and the then Chief Minister assured the House that the matter would be reviewed. Accordingly, the matter was examined by the Government and the Government came to know that the writ petitioners collected taxes from the public and retained the same without payment to the State to which it is due. There was adverse impression in the public on the grant of instalments. Further the Government has no power under the Act to give instalments. In view of this, the Government issued instructions withdrawing the grant of instalments, as their earlier orders for granting of instalments is contrary to the provisions of section 16(2) of the Andhra Pradesh General Sales Tax Act ...........................'

5. It is clear from the said counter-affidavit that the present notice directing payment of the entire tax due in lump sum is pursuant to the instructions of the Government. In other words, the communication of the Deputy Commissioner made under section 16(2) permitting the petitioners to pay sales tax in instalments is sought to be ignored by the Commercial Tax Officer in proceeding to realise the amount in lump sum in view of the directions of the Government. Even as admitted by the Government in its counter-affidavit, it has no jurisdiction either to grant instalments or withdraw instalments already granted. So, the action of the Commercial Tax Officer in proceeding to ignore the communication of the Deputy Commissioner is entirely without jurisdiction and illegal. If the earlier order of the Deputy Commissioner granting instalments is one made under section 16(2), it could not have been varied or set aside or ignored by the Commercial Tax Officer, much less could he act contrary to it and proceed to realise the amount of sales tax in lump sum. That apart, the order cannot be set aside or varied without notice to the parties affected. Admittedly, no notice was given withdrawing the facility of paying the tax in instalments. The order under section 16(2) vests a right in the assessee to pay the tax due in instalments and such an order cannot be varied or set aside against the interests of an assessee. For the aforesaid reasons, the direction to pay the tax in lump sum cannot be sustained, and consequently, the Commercial tax Officer or any other authority cannot realise the arrears of sales tax in lump sum contrary to the order of the Deputy Commissioner dated 3rd August, 1982.

6. Faced with this situation, the learned Government Pleader contended that the communication of the Deputy Commissioner dated 3rd August, 1982, is not an order under section 16(2). He contends that that order is not in the usual form in which instalments are granted by the Deputy Commissioner, and consequently, it cannot be construed as an order under section 16(2). He also points out that an order under section 16(2) is a quasi-judicial order, which the Commercial Tax Officer can pass only on an application made by the party. No such applications were made in these cases. It is also urged that the quasi-judicial order contemplated under section 16(2) cannot be passed on the dictates or directions of the Government. The present order contained in the form of a letter addressed by the Deputy Commissioner to the Commercial Tax Officer is based on a memorandum issued by the Government and not upon a consideration of the facts of the case by the Deputy Commissioner.

7. Before we consider these objections, we may notice that sub-section (2) of section 16 empowers the Deputy Commissioner to permit, by general or special order, the payment of any tax assessed under the Act in two or more instalments within such intervals as may be specified in the said order. That provision does not require any application to be made by the dealer; nor does it envisage any particular form in which the order should be made. It merely empowers the Deputy Commissioner to make an order permitting the payment of tax in two or more instalments. It does not specifically require any reasons to be recorded. The Deputy Commissioner, having regard to the general conditions of trade and commerce prevalent in any particular year, may make even a general order which need not be with reference to any individual assessee. If, having regard to the general conditions of trade and commerce relating to production of sugarcane and sale of jaggery during a particular year or years, the Deputy Commissioner has, either on his own motion or on receiving representations from the dealers, directed the Commercial Tax Officer to realise the amount of tax in six equal instalments, we are unable to see why that order cannot be construed as one made under section 16(2). The order is not an administrative order, which requires to be issued by order and in the name of the Governor or the particular officer. It is a quasi-judicial order and such an order need only take into consideration the representations made by the parties and the facts relevant thereto. Although representations were not directly filed before the Deputy Commissioner, the representations, which were filed before the government, were forwarded to him through the Commissioner of Commercial Taxes. The Government itself was of the opinion that the arrears of sales tax should be collected in six half-yearly equal instalments, and expressing its view, forwarded the representations to the Commissioner of Commercial Taxes, who, in turn, forwarded the same endorsing that view to the Deputy Commissioner. The Deputy Commissioner, who received the representations and the memorandum of the Government, did not disagree with that view, but agreeing with that view, directed the Commercial Tax Officer, who is empowered to recover the tax, to realise the arrears of tax in instalments and report compliance. Although the order is contained in the form of a letter, all the necessary ingredients of an order envisaged under sub-section (2) of section 16 are contained in the said order. That letter did not remain as an interdepartmental correspondence, of which the parties concerned had no knowledge. The Commercial Tax Officer and his subordinates, who are charged with the duty of recovering the tax, acted on that letter and recovered the arrears of sales tax in instalments. The sales tax authorities themselves, acting on the order dated 3rd August, 1982, contained in the letter, did not take any coercive steps to realise the tax in lump sum, but proceeded to recover the tax in instalments as ordered by the Deputy Commissioner. Thus, the order having been acted upon, it does not lie in the month of the respondents to say that it is a mere interdepartmental correspondence with which the petitioners had no concern and that no right accrued to them or that it is a mere administrative order which can be withdrawn at any time. The question whether or not the Government has jurisdiction over the matter is, in our opinion, beside the point. When, on receipt of the representations and the memorandum of the Government, the Deputy Commissioner, who admittedly has jurisdiction over the matter, has directed the recovery of the arrears of sales tax in instalments, that, in our opinion, constitutes an order under section 16(2) and is binding on the authorities, unless it is varied or set aside in accordance with law. Admittedly, that order has not been set aside or varied by the competent authority. The tax is sought to be collected in lump sum on the instructions of the Government; but those instructions are not envisaged by any provisions of the Act and therefore cannot be acted upon. The right accrued under section 16(2) cannot be taken away in this manner.

8. Mr. Venkataramana, the learned Government Pleader, however, contended, relying upon a judgment of the Supreme Court in Purtabpur Co. Ltd. v. Cane Commissioner, Bihar : [1969]2SCR807 , that where the Government, without jurisdiction, directs a particular authority to act in a particular manner and if that authority passes an order on the directions of the Government, such order passed by that authority is a nullity and cannot vest any right in any person. That was a case in which the Cane Commissioner, who has concurrent jurisdiction with the State Government, was of the opinion that the reservation made in favour of the appellant therein should not be disturbed; but, on the directions of the Chief Minister, varied the reservation. The Supreme Court held :

'The power exercisable by the Cane Commissioner under clause 6(1) is a statutory power. He alone could have exercised that power. While exercising that power he cannot abdicate his responsibility in favour of anyone - not even in favour of the State Government or the Chief Minister. It was not proper for the Chief Minister to have interfered with the functions of the Cane Commissioner .............

9. The executive officers entrusted with statutory discretions may in some cases be obliged to take into account considerations of public policy and in some context the policy of a Minister or the Government as a whole when it is a relevant factor in weighing the policy but this will not absolve them from their duty to exercise their personal judgment in individual cases unless explicit statutory provision has been made for them to be given binding instructions by a superior.'

10. In that case, while the opinion of the Cane Commissioner was one way, he acted to the contrary because the Chief Minister had given some instructions to that effect. That was a clear case of abdicating the statutory power vested in him and acting to the dictates of somebody else. The facts and circumstances of that case led the court to conclude that the Cane Commissioner had surrendered his judgment to the Chief Minister.

11. In this case, it would appear that the Government, while expressing its opinion, obviously realised that it had no power to direct the collection of the amount of sales tax in instalments, and therefore, forwarded the representations made by the assessees to the Commissioner of Commercial Taxes and the Commissioner of Commercial Taxes, in turn, also not being the authority competent to make an order under section 16(2), forwarded the same to the Deputy Commissioner. Admittedly, the Deputy Commissioner, being the competent authority, communicated the order to the Commercial Tax Officer, while retaining the representations with him. The order of the Deputy Commissioner is clearly a direction to the subordinate authorities to realise the arrears of sales tax in instalments. When that order satisfies all the ingredients of section 16(2), the mere fact that some other authority also opined in the same manner does not make it any the less an order under section 16(2). We have, therefore, no hesitation in holding that the instructions of the Government directing collection of the arrears of sales tax in lump sum are wholly without jurisdiction and illegal. The petitioners are entitled to pay the arrears of sales tax in instalments as ordered by the Deputy Commissioner on 3rd August, 1982.

12. Lastly, it was contended that since the petitioners have collected sales tax from the purchasers, these are not fit cases in which this Court should exercise its extraordinary jurisdiction under article 226 of the Constitution in favour of the petitioners. We are not, however, impressed by this argument for the simple reason that the order made under section 16(2) is a quasi-judicial order and once it has become final, it must be honored by everyone and where a citizen complains that the order is not complied with, it is not merely within the power of this Court but it becomes the duty of the court to see that the order is complied with by the authorities concerned. Whether instalments should have been granted in these cases or not, it is not for us to decide. Instalments having been granted by a competent authority, no authority other than the one vested with the jurisdiction to set aside that order, can direct its subordinate officers to ignore that order and realise the amount of tax in lump sum. That amounts to directing the subordinate officers to act contrary to the provisions of the Act.

13. For the reasons stated above, the respondents are hereby restrained from collecting the arrears of sales tax due from the petitioners in lump sum but may realise the arrears of sales tax in instalments as directed by the Deputy Commissioner of Commercial Taxes in his order dated 3rd August, 1982.

14. These writ petitions are accordingly allowed to the extent indicated above. In the circumstances, there will be no order as to costs. Advocate's fee Rs. 150 in each.

15. On pronouncement of the judgment, the learned Government Pleader appearing for the respondents sought leave to appeal to the Supreme Court. We are unable to certify that these writ petitions involved such substantial questions of law of general importance as require consideration by the Supreme Court or that these are otherwise fit cases for grant of leave to appeal to the Supreme Court. Leave refused.


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