2005 (11) TMI 462 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the constitutional validity of the second proviso to section 19 of the Andhra Pradesh General Sales Tax Act, 1957.

Detailed Analysis:

The petitioners sought a writ of mandamus to declare the second proviso to section 19(1) of the A.P. General Sales Tax Act, 1957 as arbitrary and violative of constitutional articles. They also requested the court to direct the respondent to entertain appeals against assessment orders without requiring payment of a specified tax percentage. The petitioners contested the validity of a distraint order dated December 2, 2003.

The core issue revolved around the constitutional validity of the second proviso to section 19 of the Act, which mandates the deposit of a specific tax percentage as a pre-condition for admitting an appeal. The proviso required the appellant to provide proof of payment of 12½ per cent of the tax difference between the assessing authority and the appellant. The court noted that the right of appeal is statutory and can be subject to conditions set by the Legislature.

Citing legal precedents, the court emphasized that the imposition of conditions for exercising the right of appeal is within the legislative purview. Previous judgments, such as Anant Mills Co. Ltd. v. State of Gujarat and Shyam Kishore v. Municipal Corporation of Delhi, supported the legality of requiring pre-deposit for appeals. The court highlighted that the Legislature can impose accompanying liabilities when granting the right of appeal.

Referring to the decision in Penguin Textiles Ltd. v. State of A.P., the court reiterated that the High Court may allow payment in instalments but not grant a stay of recovery during a revision. Ultimately, based on the legal principles established by the Supreme Court, the court concluded that the impugned proviso was constitutionally valid and did not suffer from any infirmities.

Consequently, the court dismissed the writ petitions, affirming the validity of the proviso and rejecting the challenge to its constitutionality. The judgment highlighted that the Legislature has the authority to prescribe conditions for exercising the right of appeal, and in this case, the proviso requiring a tax deposit was deemed valid legislation.