WP/24839/2006 of M/s Emami Limited, Vs Additional Commissioner (CT) (Legal) on 29 December 2006

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

(Special Original Jurisdiction)

FRIDAY, THE TWENTY NINTH DAY OF DECEMBERTWO THOUSAND AND SIX

PRESENT

THE HON'BLE MR JUSTICE J.CHELAMESWARAND

THE HON'BLE MR JUSTICE D.APPA RAO

WRIT PETITION No.24839 OF 2006

Between:

M/s.Emami Limited, rep. by itsGPA Holder KVN Krishna Kishore

AND

..... PETITIONER

Additional Commissioner (CT) (Legal),Office of the Commissioner ofCommercial Taxes, A.P. Hyderabad, and others..

....RESPONDENTS

THE HON'BLE MR JUSTICEJ.CHELAMESWARAND THE HON'BLE MR JUSTICED.APPA RAO

WRIT PETITION No.24839 OF 2006

O R D E R(Per Sri Justice J.Chelameswar)

This writ petition is filed with a prayer as follows:

“… Hon’ble Court may be pleased to issue writ, order ordirection, more particularly in the nature of Writ ofMandamus, setting aside the order dated 6.10.2006 inCCT’s Ref.No.LIII(2)/778/2006 passed by the 1[st] respondentand direct the respondent authorities not to collect penaltyof Rs.4,69,500/- until disposal of the appeal in AppealNo.C/126/06-07, pending before 2[nd] respondent and pass…”

The petitioner is a limited company carrying on the business in themanufacture and sale of ayurvedic drugs as well as cosmetics and is registeredas dealer on the rolls of the third respondent under the A.P. General Sales TaxAct and CST Act. One of the products, which the petitioner deals in is called‘Navaratan Oil’. There is a dispute between the petitioner and the respondentswhether the said item is to be classified as ‘drug’ or ‘cosmetic’ under theAPGST Act. According to the petitioner, the said item is to be classified as‘drug’ and therefore it is liable to pay tax at 10%, whereas according to therespondents, it falls under the category ‘cosmetic’ and taxable at 20% under theAct. A provisional assessment of the petitioner’s tax liability for the periodcommencing from October, 2004 to January, 2005 was made treating the above- mentioned item as ‘cosmetic’. Aggrieved by the same, the petitioner carried thematter in appeal before the Appellate Deputy Commissioner. The said appealwas dismissed by an order dated 30.03.2005. Challenging the same, thepetitioner carried the matter in further appeal before the Sales Tax AppellateTribunal, which is still pending. In the meanwhile, on 26.04.2005 the secondrespondent passed an order levying penalty on the ground that the petitionerdid not pay the appropriate amount of tax. Aggrieved by the same, thepetitioner carried the matter in another appeal before the Sales Tax AppellateTribunal and the same is pending. Along with the appeal, the petitioner alsomoved an application before the second respondent seeking stay of therecovery of the penalty during pendency of the appeal. The second respondentby his order dated 11.09.2006 rejected the said application. Hence, the presentwrit petition.

Heard the learned Government Pleader.

As there is a dispute about the classification of the product of thepetitioner, which is pending adjudication before the Tribunal, we are of theopinion that the writ petition can be disposed of at the admission stage itself bydirecting the respondents not to take any coercive steps for recovery of thepenalty during the pendency of the appeal before the Sales Tax AppellateTribunal.

With the above direction, the writ petition is disposed of.

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JUSTICE J.CHELAMESWAR

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JUSTICE D.APPA RAO

THE HON'BLE MR JUSTICEJ.CHELAMESWARAND THE HON'BLE MR JUSTICED.APPA RAO

WRIT PETITION No.24839 OF 2006(Per Sri Justice J.Chelameswar)

29[TH] DECEMBER, 2006