9911796707
TMI Blog2001 (9) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... a public limited company incorporated under the Companies Act, 1956 established its large-scale industry in Nalgonda district to manufacture Sponge Iron. It is a registered dealer on the files of the Assistant Commercial Tax Officer, General Bazaar Circle, Secunderabad. Under the incentive scheme formulated by the Government, which was amended by G.O. Ms. No. 117 of Industries and Commerce Department, dated March 17, 1993, the assessee-company, which was situated in area No. II is entitled not only for capital subsidy up to 50 per cent of the capital cost not exceeding Rs. 15 lakhs but also entitled to the benefit of deferment of sales tax to the extent of 75 per cent of the fixed cost in a period of ten years. Accordingly, on the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent-registering authority, however, passed orders directing the petitioner to furnish security to an extent of Rs. 7 lakhs, though according to the registering authority the petitioner's tax liability extends to about Rs. 54 lakhs for a year. The said action of the respondent is assailed in this writ petition. 3.. The learned counsel for the petitioner contended that as long as there is no liability to pay the tax, the invocation of the provisions of section 12 driving the petitioner-company to pay additional security is illegal and unwarranted. According to the learned counsel the companies, which are registered under the provisions of the Companies Act, are exempted from making any deposit even at the time of registration under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the respondent contended that though in terms of G.O. Ms. No. 117, the petitioner had the benefit of deferment of sales tax, the effect of it is only postponing the liability for a period of ten years and there is no cessation of liability. In that view of the matter, the registering authority is perfectly within his powers in passing the impugned order. The learned counsel also contended that the petitioner is being issued from time to time number of forms, such as C forms etc., and even for the safe custody and proper utilisation of those forms, it is required that the petitioner-dealer has to furnish the security as required. 6.. From the above rival contentions, the issue to be considered is "whether the respondent-re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to whom an application is made under sub-section (6) so to do for the proper realisation of the tax and other dues payable under this Act, or for the proper custody and use of the forms referred to in this Act, the rules made and the notifications issued thereunder, he may by an order in writing and for reasons to be recorded therein, impose as a condition for the issue of a certificate of registration a requirement that the dealer shall furnish in the prescribed manner and within such time as may be specified in the order such security as may be specified for all or any of the aforesaid purposes. (8) and (9)............... (10) Where it appears necessary to the authority granting a certificate of registration under this sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the forms referred to in the Act, the rules made and the notifications issued thereunder, the said authority may direct him in writing to furnish, within such time as may be specified by such authority, security or additional security not exceeding an amount equal to tax payable under the Act for a year as estimated by him after giving the dealer an opportunity of being heard." 9.. A perusal of the above Rules clearly shows that under the scheme of the Act a dealer is under an obligation to make a deposit of the probable tax payable as a security at the time of registration. Thereafter under sub-section (10) the registering authority is given the discretion to call upon the registered dealer wherever it is necessary for registering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Federation of A.P. Chamber of Commerce and Industry. As per this circular, the registering authorities were directed not to insist on the security deposit required under sub-section (7) of section 12 of the APGST Act, read with rule 28(8) of the APGST Rules in respect of the companies registered under the Companies Act, 1956 and also the dealers dealing in non-sensitive commodities. There was another circular issued by the Commissioner in CCT's Ref. A1(3)/1101/97-1, dated July 21, 1997. In this circular, the Commissioner had referred to his earlier circular dated February 4, 1994 and reiterated that the registration of all limited companies shall be completed without requiring of any security deposit. In the light of the above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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