Ariston Pharma Novatech PVT. LTD vs. Assistant Commissioner (St) - Telangana High Court, 07 July 2021

Cause title — parties, addresses and appearances

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE SEVENTH DAY OF JULY TWO THOUSAND AND TWENTY ONE PRESENT THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND THE HONOURABLE SRI JUSTICE T.VINOD KUMAR Between: Ariston Pharma Novatech D.No.5-5-251136/8, Ground Hyderabad- 500072 Ltd, (Represented Prashanth Nagar, Pvt. Floor, by its IDA Director) Kukatpally, AND 1 Assistant Commissioner (ST), Hydernagar-lll Circle, 3rd Floor' Gagan Vihar Building, Nampally, tril.J Road, Hyderabad - 500 001 Commercial Tax Officer, Hydernagar Circle, 3rd Floor' Gagan Vihar Complex' Nampally, Hyderabad. State of Telangana, (Represented by its Principal Secretary (Revenue)) Secretariat, Hyderabad ,..PETITIONER 2 3 ...RESPONDENTS Petition under Article 226 of the constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toissueanappropriatewrit,orderordirectioninnatureofwritofmandamus JL.Liing the impugned Assessment Order AO No.33939 d1.2810512019 passed by i.i i"rpino"nt as "being'illegal, arbitrary, contrary to law and violative of principles of natural justice, without jrJrisdiction and authority of law and being violative of Articles 14 and 19(1Xg) of Constitution of lndia' lA NO: 2 OF 2021 PetitionUndersectionl5lCPcprayingthatinthecircumstancesstatedin the affidavit filed in support of the petition'-the High Court may be pleased to stay in" ,u.or"ry of the disputed tax of iRs 72 18,827i -. under the impugned Assessment ijro.i no No.sesss dt.28/05i 2019 passed by the 1'' respondent' Counsel for the Petitioner: SRI' Y SREENIVASA REDDY Counsel for the Respondents: SRI' J' SAI KRISHNA' AGP FOR ADVOCATE GENERAL Between: Ariston Pharma Novatech Pvt Ltd '. {Reoresented by its Director) D.No.5-5-251130/B, iio';ni"iroor"Prashanih N'gbr' ion Kukatpallv' Hvderabad- 500072 ...PETITIONER WRIT PETITION NO: 6469 OF 202'1. 6494 OF 2021, 6545 0F 2021 AND 6899 0F 2021 WP No: 6469 of 2021 WP NO: 6494 OF 2021 AND 1 IA NO: 20F 2021 2 3 Assistant Commissioner /ST), Hydernagar_lll Circle, 3rd Floor, Gagan Vihar Buitding, Nampaly, M.J RoaO', HVO"TaOZO _'SOi'Oiii "' fi:ffi::fi'?lrl*3:,:er' Hvdernasar circre, 3rd Froor, Gasan Vihar comprex, 3:1t:iJ,rl?liif#r:'lRePresented bv its Principar secretary (Revenue)) Petition under Articre -226 0f the constitution of India praying that in the circumstances stated in tire affioaviiriteoinlr"*,ti,'ii" High court may be preased to rssue an appropriate writ. order or direcrion i" ,"ili" qi y-rii:r ."nJl,iJJo"";rring the impugned Assessment oroer no-ruo..j;;;' dt.28ro5r2o1g passed by pt respondent as being iregari arbitrarv, *.iiriv t" Lw ano viorative of principles of i;'H? i1ilfie,:T[""'i#lJifl-:':1i.T: "tr''oi*'v o-r rJ* ,no reins urorativl'oii.ti.r", ...RESPONDENTS ...PETITIONER Petition under Section, 'r 51 cpc praying that in the circumstances stated in the affidavit fired in support ol tf5^0"1i10a tni, rjigh ilr.t.mav be preased to stav the recovery of the disputed tax of Rs.56,18 zsgl- .,iio"iine rmpugned Assessment order A O N o. 3 3 9 4 6 dt. 28 t O s t 20 1 s p r r r" o-Oy-t ri "" i'., il ri'o no " n, Counset for the petitioner: SRl. y SREENIVASA REDDy Counsel for the Respondents: SRl. J. SAI KRISHNA, AGp FOR ADVOCATE GENERAL Between: Ariston Pharme Novatech pvt. Ltd., (R D No 5-5-2511307e, brouno rroor, crasilrri, ,tjj;Bi:isr'?r1,nr?J",,rl'"ro?is8i",i] AND 1 2 A i ilii1''?"ffi lir:'il :,.{:ll, f, 1iilgge':, I g,Bfi r,o F,o o r, G a s a n N a a r fi:ili:i,!,: ?l,l}$x,j:. Hvdemasar circre, 3rd Froor, Gasan Vihar comprex, 3:Xl?,"i,.I?iry#r:, (Represented bv its principar secretary (Revenue)cr) 3 .,.RESPONDENTS ^,-^. _- l"tition under Article 226 of the Constitutio !:::1X ffi ii?f"' ;i: : "1'l o a v i t ri r e o l n l le ; il ; ; : ;[ 1"3:X f fi :i fl "' f il, I o' 1; :::, jruIcsniT+eJf .:id;.,x3,",tJ1i31t";:*r;kaffi ffi J:i"ffi ;; natural iustice, wit1,ort iriis'l: arbitrary' contrary to law and violatrve of principLs of r + a no r s1 r jffr ;; i#J,]i,lifl ;';"ri ff :. "'tno ritv or raw a no oeins' vil r;;,!' "iXn,.,u, WP NO: 6545 OF 2021 -'-a-''- -- Petition under section 151 cpc praying that in the circumstances stated in the arrrdavit fiied in support of the petition, tr,L tiig;"b;,rrt.may be preased to siay tne recovery of the disputed tax of Rs.sa,ri,i6ir- ,"o"iine impugned Assessmenr order AO No.33944 dr.2BtOst2O1g prrr.O fy't't""ir, r"rrlio"r, Counsel for the petitioner: SRl. y SREENIVASA REDDy Counsel for the Respondents: SRl. J. SAI KRISHNA, AGp FOR IANo; 20F 2021 AND ADVOCATE GENERAL Between: Ariston Pharma Novatech pvt. Ltd, (Represented by its Director) D.No55-25/136/8, Ground Floor, prashantn Nag'ar, iOA r<rraifirrry,"HvierrOaO_ 500072 ...PETITIONER 1. Assistant Commissioner (ST), Hydernagar-lll Circle, 3rd Floor, Gagan Vihar Building, Nampally, Road, Hyderabad - 500 00'l 2. Commercial Tax Officer, Hydernagar Circle, 3rd Floor, Gagan Vihar Complex, Nampally, Hyderabad. 3. State of Telangana, (Represented by its Principal Secretary (Revenue)) Secretariat, Hyderabad ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate wrlt, order or direction in nature of writ of mandamus declaring the impugned Assessment Order AO No.33942 dt.28.05.2019 passed by 1st respondent as being illegal, arbitrary, contrary to law andviolative of principles of natural justice, without jurisdiction and authority of law and being violative of Articles 14 and 19(1)(g) of Constitution of lndia. lA NO: 2 OF 202'l Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in suppo( of the petition, the High court may be pleased to stay the recovery of the disputed tax of Rs.76,01,0431 under the impugned Assessment order AO No.33942 dt.28.05.2019 passed by the respondent' Counsel for the Petitioner: SRl. Y SREENIVASA REDDY Counsel for the Respondents: SRl. J. SAI KRISHNA, AGP FOR ADVOCATE GENERAL

The Court made the following: COMMON ORDER WP NO: 6899 OF 2021

I THE HON'BLE SRI JUSTICE M'S' RAMACHANDRA RAO AND THE HON'BLE SRI JUSTICE T' VINOD KUMAR (t494 F 1 65 oF2 1 AND 68 90F2 1 w N 6 o 20 L COMMoNoRDER: (per Hon'bte Si Justice T Vinod Kumar) Since, in these writ petitions the petitioner is challenging the order of assessment passed by the lst respondent for the period 2O1g-14,2015-16, 2016-17 arrd, 2Ol7-18 (up to June, 2017) by raising common pleas, these writ petitions are being disposed of by this common order

In all these writ petitions, the petitioner is assailing the correctness of assessment orders passed by the 1st respondent, all of which are dt. 28.05.2019 in A.O. No.s. 33939, 33942, 33944 and 33946 (up to June, 2017).

It is the contention of the petitioner that by the impugned assessment orders, the 1st respondent has subjected to tax under the Telangana VAT Act, 2005 (for short 1/AT Act) the turnover relating to stock transfer to other States; that the petitioner claimed exemption on such turnover as exempt sale covered by Section 6A of the Central Sales Tax Act, 1956 (for short 'the Act'); that the said turnover has been duly reflected in the returns filed by the petitioner under the CST Act; that the relevant declarations in Form 'F' as prescribed under the CST Act have been submitted to the 2nd respondent being the juri ictional authority; and that the impugned order has been passed by the 1st respondent without considering such declarations fi1ed supporting the exempt sale and without affording persona.r hearing to the pe tioner in violation of principles of natural justice.

It is also contended that the 1"t respondent subjected the turnover to tax at higher rate of 14.5%, white the petitioner being a registered dealer in goods specified in Schedule IV of VAT Act, is liable to pay tax only at 5%; and that the input tax credit available to the petitioner on its purchases as reflected in the electronic records of the respondents was also not taken into consideration to arrive at the net tax liabilitv.

The petitioner would further contend that, though the impugned assessment orders refer to issuance of showcase notice and a final notice to the petitioner for filing objections, the final notice was not served on the petitioner, since, the concerned employee who was dealing with the matters relating to commercial tax of the petitioner company had left the service of the company' In addition, the petitioner contends that the assessment relating to the period 2013-14 and 2015-16 is barred by limitation'

It is also contended further, that in similar circumstances' this Court, by order dt.23.Ol'2O2O in W P' No' 1214 of 2020 for the period 2014-15, was pleased to set aside the order passed by the respondents and remitted the matter back to the said authority for considering afresh in accordance with 1aw' 7 . Sri J. Sai Krishna, learned Assistant Government Pleader attached to the office of the Advocate General' does not dispute the fact, that the impugned orders do not reflect the petitioner being afforded with personal hearing by the 1st respondent before the 3 g. Having regard to the submissions made as above' this Court is satisfied that the action of the 1"t respondent in passing the impugned assessment orders without alfording personal hearing to the petitioner, has resulted in violation of principles of natural justice causing prejudice to the petitioner.

10.

Accordingly, these writ petitions are allowed, the impugned assessment orders dated 2a.O5.2O19 in A.O. Nos.33939, 33942' 33944 and 33946 for the years 2013-L4, 20\5-2016, 2016-2017 and 2017-2018 respectively (upto J:une, 2OI7) passed by the 1"t respondent against the petitioner under the Telangana VAT Act, 2005 are set aside; the matters are remitted back to the lst respondent for fresh consideration; the lst respondent is directed to serve a show cause notice afresh on the petitioner for each of the assessment years separately indicating therein the turnover proposed to be taxed and also the tax proposed to be levied thereon, in accordance with Rule 64(1)(b) of the Telangana VAT Rules, 20O5; the petitioner is granted four weeks time from the said orders are passed; and is also not in a position to explain as to why the turnover claimed as exempt saies in the VAT return and duly reflected in the CST return' covered by the 'F' deciaration Forms, has not been considered by the l"t respondent'

Learned Assistant Government Pleader' however' would fairly submit that since, this Court in W'P' No' 1214 of 2020 was pleased to set aside the assessment for the year 2014-15 and remanded the matter back to the 1st respondent' even in the present writ petitions, the matters may be remanded back to the 1"t respondent for d-enouo consideration'

date of receipt of such show. cause notices to file objections thereto, along with supporting material, including the plea relatlng to that ol the proposed assessment for the relevant period being barred by time; personal hearing shall be afforded to the petitioner by the 1st respondent; and a reasoned order shall be passed thereafter by the 1st respondent in accordance with law and communicated to the petitioner. No order as costs. 1 1 . Pending miscellaneous petitions, if any, shall stand closed in the light of this final order. /i// . T.TIRUMALA DEVI ASSISTANT REGISTRAR ,\\--' SECTION OFFICER To,

Assistant Commissioner (ST), Hydernagarlll Circle, 3rd Floor, Gagan Vihar Building, Nampally, M.J Road, Hyderabad - 5O0 q91 2. commircial Tax officer, Hydernigar circle, 3rd Floor, Gagan Vihar complex, Nampally, HYderabad.

The Printipal Secretary (Revenue), State of Telangana' Secretariat' Hyderabad a. On" CC to Sri. Y Sreenivasa Reddy, Advocate [OPUC] s. iwo ccs to Gp for commercial Taxes, High court for the state of Telangana. lourl 6'TwoCCstotheAdvocateGeneral'HighCourtfortheStateofTe|angana,(oUT)

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HIGH COURT DATED:0710712021 ORDER Allowing the WP's Without costs. \) ( s T E (' 1 AT Dt: , 21 JUI W WP.Nos.6469, 6494, 6545 & 6899 of 202'l o\ ?)r/ ,// llz ,/J lo liJv