1969 (11) TMI 76 - HC - VAT and Sales Tax

Summary

Issues:
Jurisdiction of Special Commercial Tax Officer to collect additional tax under section 32 of Andhra Pradesh General Sales Tax Act.
Validity of the order of the Special Commercial Tax Officer in collecting Rs. 3,000 from the petitioner-firm.
Refund of the amount collected by the Special Commercial Tax Officer.

Analysis:
The petitioner sought to quash the order of the Special Commercial Tax Officer and requested a refund of Rs. 4,000 collected from them. The petitioner argued that the Special Commercial Tax Officer exceeded his jurisdiction by collecting Rs. 3,000 under section 32 of the Andhra Pradesh General Sales Tax Act, alleging evasion of tax and failure to maintain correct accounts. The officer inspected the petitioner's mill, found discrepancies in stock verification, and issued a notice under section 31 for contravention of section 25 of the Act, mentioning potential prosecution and confiscation of verified stocks. The petitioner claimed they were coerced into compounding the offense by paying Rs. 1,000 as compounding fee and Rs. 3,000 as tax. The Special Commercial Tax Officer justified the collection based on the petitioner's willful contravention of the Act and compounding of the offense under section 32.

The court noted that the Special Commercial Tax Officer's action was beyond his jurisdiction as section 32 of the Act does not authorize the collection of tax as done in this case. Section 32 allows composition of offenses, with clause (a) permitting collection if the offense involves failure to pay or evasion of recoverable tax, while clause (b) covers other cases. Since the petitioner's offense related to not maintaining accurate accounts under section 25, it fell under clause (b) and not clause (a). Therefore, the officer had no authority to collect Rs. 3,000 in addition to the compounding fee of Rs. 1,000. The court held the order invalid to the extent of collecting Rs. 3,000 and directed its refund to the petitioner.

Consequently, the court partially allowed the petition, upholding the validity of collecting Rs. 1,000 as a composition fee but quashing the collection of Rs. 3,000 by the Special Commercial Tax Officer. The officer was instructed to refund the excess amount to the petitioner. No costs were awarded in the matter.