Wp/34403/2012 Of M/S. Andhra Pradesh Beverages Corporation Ltd v. The Income-Tax Officer, Ward 1(1), 4Th Floor, Aayakar

HON'BLE SRI JUSTICE GODA RAGHURAMANDHON'BLE SRI JUSTICE M.S.RAMACHANDRARAO WRIT PETITION No.34403 of 2012 ORDER: (per Hon’ble Sri Justice Goda Raghuram) Heard Sri K.Vasant Kumar, learned counsel forthe petitioner and Sri J.V.Prasad, learned StandingCounsel for Income Tax for the respondents. The order dated 26.10.2012 passed by the fourthrespondent directing the petitioner to resume paymentof instalments as in the past i.e., at the rate of Rs.20crores per month; specifying that the next instalment isto be paid by 12.11.2012 and future instalments wouldbe payable by 12[th] of the subsequent months, ischallenged in the Writ Petition. There is a chequered history leading to this orderof the fourth respondent which we propose to state invery brief, to the extent relevant and material for thepurposes of adjudication of this Writ Petition. The petitioner is a Government Companyregistered under the provisions of the Companies Act,1956 and authorized to carry on the business of import,export and carrying on wholesale trade and distributionof Indian Made Foreign Liquor, Foreign Liquor, Wineand Beer within the State under the provisions of theA.P. (Regulation of trade in Foreign Liquor) Act, 1993and the provisions of the A.P. Excise Act, 1968 readwith A.P. (Regulation of Trade in Indian Made ForeignLiquor, Foreign Liquor) Act (Amendment) Act, 2012. The first respondent-Assessing Officer initiatedproceedings against the petitioner under Section 143(2)of the Income Tax Act, 1961 (for short ‘the Act’) andafter a due process, the first respondent completed theassessment and ordered addition ofRs.1914,81,37,634/- towards disallowance on accountof the privilege fee, special privilege fee and specialprivilege fee (sports) and raised a consequent demandof tax of Rs.865,60,88,900/-. Aggrieved, the petitioner filed Writ PetitionNo.3047 of 2012 before this Court assailing the order ofassessment and sought an interim relief of stay ofoperation of the order of assessment. Since no interimrelief was granted, the petitioner approached the firstrespondent seeking stay of collection of the tax liabilityassessed, pending disposal of the Writ Petition. Thiswas declined by the first respondent vide order dated14.02.2012. The first respondent issued a notice dated03.05.2012 to the petitioner’s banker directing remittingof the tax liability of the petitioner as assessed. Thisgarnishee notice was challenged by the petitioner inWrit Petition No.13542 of 2012. In this Writ Petition thisCourt on 09.05.2012 passed an interim orderinterdicting the garnishee order, subjecting the petitionerto pay Rs.200 crores in 10 monthly equal instalments ofRs.20 crores each; the first instalment to be paid on orbefore 15.06.2012 and subsequent instalments to bepaid on or before 15[th] of every succeeding month; andsuper added a default clause to the effect that default ofeven a single instalment would result in the dissolutionof the stay granted. Eventually by the order dated 29.06.2012 thisCourt dismissed Writ Petition Nos.3047 and 13542 of 2012; the petitioner was relegated to pursue theappellate remedy against the order of assessment andthe interim order dated 09.05.2012 in Writ PetitionNo.13542 of 2012 was dissolved. Eventually by the order dated 29.06.2012 thisCourt dismissed Writ Petition Nos.3047 and 13542 of 2012; the petitioner was relegated to pursue theappellate remedy against the order of assessment andthe interim order dated 09.05.2012 in Writ PetitionNo.13542 of 2012 was dissolved. ` Thereafter, the petitioner approached the thirdrespondent seeking grant of stay of collection of the taxliability assessed, pending disposal of the appealpreferred to the appellate Commissioner. The thirdrespondent by an order dated 12.07.2012 directed thepetitioner to pay Rs.20 crores per month starting fromJuly 2012 till disposal of the appeal by theCommissioner of Income Tax (Appeals) and orderedthat subject to the above, the petitioner be not treatedas an assessee in default. Not satisfied with the aboveorder passed by the third respondent, the petitionerapproached the fourth respondent by an applicationdated 10.09.2012 invoking his administrative discretionto grant stay of collection of the tax liability assessed,pending disposal of the appeal. The fourth respondentreiterated the earlier order passed by the thirdrespondent on 12.07.2012 i.e., directing the petitioner todeposit Rs.20 crores per month without any stipulationas to the period for which those instalments should beremitted. Sri Vasanth Kumar, learned counsel for thepetitioner, would assert that in respect of an earlierassessment order i.e., for the assessment year 2008-09, the petitioner carried the grievance to theCommissioner of Income Tax (Appeals) against theorder of assessment dated 30.12.2010. TheCommissioner rejected the appeal. The petitionerpreferred a further appeal to the Tribunal. Meanwhileprovisions of the A.P. Excise and A.P. (Regulation of trade in Indian made foreign liquor, Foreign liquor) Acts,(Amendment) Act, 2012, were amended andconsidering these legislative dynamics, the Tribunal bythe order dated 05.10.2012 set aside the appellateorder and remitted the matter to the appellate authorityfor consideration de novo in the light of amendmentsintroduced to A.P. Excise and A.P. (Regulation of tradein Indian made foreign liquor, Foreign liquor) Acts,(Amendment) Act, 2012. Contention of Sri Vasanth Kumar is that this orderof the Tribunal setting aside the appellate order andremitting the matter for de novo consideration by theappellate authority could be considered as an order bythe Tribunal disapproving the order of assessment forthe year 2008-09. We would not like to make apronouncement on this issue one way or the other forthe purposes of this lis. The further contention of Sri Vasanth Kumar on the basis of this contention isthat since the order of assessment for the earlier year2008-09 is thus impliedly disapproved by the Tribunaland the reasons recorded in that order are also thebasis for the order of assessment passed for thesubsequent year 2009-10, the fourth respondent oughtto have considered at least that the petitioner has aneminently arguable case for appellate consideration andshould have granted absolute stay of collection of thetax liability consequent on the order of assessmentdated 28.12.2011. Sri Vasanth Kumar also tried to persuade us as tothe merits of the petitioner’s case pending appellateconsideration before the Commissioner (Appeals) forthe assessment year 2009-10. We are not inclined either to reflect or to record apronouncement on the contentions urged by SriVasanth Kumar to persuade us as to the fundamentalerror in the order of assessment, since that is a matterthat requires to be considered by the appellateauthority. We have enquired from Sri J.V.Prasad as to whatwould be the appropriate time that may be required forthe Commissioner of Income Tax (Appeals) to disposeof the appeal preferred by the petitioner against theorder of assessment for the AY 2009-10. Sri J.V.Prasadlearned Standing Counsel for Income Tax for therespondents-Revenue would not offer a time frame fordisposal of the appeal. We are not inclined either to reflect or to record apronouncement on the contentions urged by SriVasanth Kumar to persuade us as to the fundamentalerror in the order of assessment, since that is a matterthat requires to be considered by the appellateauthority. We have enquired from Sri J.V.Prasad as to whatwould be the appropriate time that may be required forthe Commissioner of Income Tax (Appeals) to disposeof the appeal preferred by the petitioner against theorder of assessment for the AY 2009-10. Sri J.V.Prasadlearned Standing Counsel for Income Tax for therespondents-Revenue would not offer a time frame fordisposal of the appeal. It is stated by Sri Vasanth Kumar and thisassertion is not disputed that the petitioner preferredthe appeal on 09.07.2012. Four months have alreadygone by and having regard to the balance ofconvenience, in that the tax implication underconsideration is substantial; the petitioner is an agentand instrumentality of the State; and it is asserted thatthe income of the petitioner-Corporation constitutesrevenue of the State and augments State’s scarcefinancial resources, we consider it appropriate to directthe second respondent-appellate authority to considerand dispose of the appeal preferred by the petitioner on09.07.2012 against the order of assessment dated28.12.2011 in respect of the assessment year 2009-10within a period of three months from the date of receiptof a copy of this order. In the interests of justice, we however direct thatthe respondents shall forbear from initiating or pursuing any coercive steps against the petitioner for collection ofthe tax liability as assessed by the order dated28.12.2011 of the 1[st] respondent for theassessment year 2009-2010 on condition of thepetitioner discharging its liability to pay the sum ofRs.200 crores (in 10 equal monthly installmentscommencing from 15.06.2012 qua the order of thisCourt dated 09.05.2012 in W.P.No.13542 of 2012), uptodate and without any arrears and continue to pay thesaid amount @ Rs.20 crores per month by 15[th] of everysucceeding month upto 15.03.2012 without default. Ifthere are any arrears of the installments payable by thepetitioner as per the directions supra, these arrearsshall be paid upto date by 15.12.2012. In default of anyof the conditionalities imposed herein on the petitioner,the stay granted herein shall stand dissolved forthwithon occurrence of the default and the respondents-Revenue shall be at liberty to pursue appropriate stepsagainst the petitioner for realization of the tax liability asassessed. The Writ Petition is disposed of as above; but inthe circumstances without costs. ______________________ JUSTICE GODA RAGHURAM __________________________ JUSTICE M.S.RAMACHANDRA RAO 21[st] November 2012DR