2001 (4) TMI 876 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality and validity of the transfer of the appeal by the Commissioner of Commercial Taxes under Rule 33 of the Andhra Pradesh General Sales Tax Rules, 1957.
2. Arbitrary and unreasonable exercise of power by the Commissioner of Commercial Taxes.
3. Non-application of mind by the Commissioner of Commercial Taxes in transferring the appeal.

Issue-wise Detailed Analysis:

1. Legality and Validity of the Transfer of Appeal:
The primary question was whether the Commissioner of Commercial Taxes acted legally and validly in transferring the appeal from the Territorial Appellate Deputy Commissioner (C.T.), Panjagutta Division, Hyderabad to the Appellate Deputy Commissioner (C.T.), Hyderabad Rural Division, Hyderabad under Rule 33 of the APGST Rules. The Court noted that the Commissioner issued the transfer order on March 15, 2001, before the petitioner filed the appeal on March 16, 2001. Rule 33(1) stipulates that the Commissioner may transfer an appeal "pending" before an Appellate Deputy Commissioner to another Appellate Deputy Commissioner for reasons recorded in writing. Since the appeal was not pending at the time of the transfer order, the Court held that the Commissioner's order dated March 15, 2001, was without authority of law and violative of Rule 33.

2. Arbitrary and Unreasonable Exercise of Power:
The petitioner contended that the transfer order was arbitrary and unreasonable. The Court observed that the Commissioner's subsequent order on March 31, 2001, acknowledged that the petitioner's assessment did not involve consignment sales, which were the basis for transferring the appeals of the other companies. Despite this, the Commissioner maintained the transfer of the petitioner's appeal. The Court found this action to be arbitrary and without valid reasons, emphasizing that the rationale behind recording reasons in writing is to prevent arbitrariness and ensure that the reasons are valid and relevant.

3. Non-application of Mind:
The petitioner argued that the Commissioner did not apply his mind while transferring the appeal. The Court agreed, noting that the Commissioner mechanically transferred the petitioner's appeal along with those of other companies without providing any specific reasons related to the petitioner's case. The Court emphasized that discretionary power must be exercised based on the facts and circumstances of each case and should not be arbitrary or mechanical.

Conclusion:
The Court allowed the writ petition, quashing the impugned proceedings of the Commissioner of Commercial Taxes dated March 15, 2001, and March 31, 2001. The Court clarified that this order does not prevent the Commissioner from exercising his discretionary power of transfer under Rule 33 of the APGST Rules if there are valid grounds and reasons for doing so. The writ petition was allowed with no order as to costs.