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TMI Blog2023 (10) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... led for purchase of cement at a concessional rate. In spite of this, petitioner continued to purchase cement at a concessional rate against the G Forms - the petitioner, beyond 17.07.2001, could not have purchased cement at a concessional rate and petitioner continued to purchase cement against the G Forms basing on the G2 registration certificate issued much before 17.07.2001. The proviso to G.O. dated 17.07.2001 would not be applicable to the petitioner. Therefore, the assessing officer, the appellate authority and the Sales Tax Appellate Tribunal were justified by holding that the petitioner is liable to pay tax on cement at its normal rate and not at the concessional rate - The said issue whether the petitioner is entitled for purchase of cement at a concessional rate under Section 5B in the teeth of G.O. dated 17.07.2001 stands answered in the negative against the petitioner. Penalty order - HELD THAT:- Though the State has taken a plea that there is some misquoting or wrong quoting of the provision, nonetheless, the petitioner never had an occasion of defending himself in a penalty proceedings under Section 5-B(2). What is also required to be appreciated is that Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. 5. The point of contention in the instant case is : (a) whether the petitioners are entitled to avail purchase of cement at a concessional rate, i.e., at the rate of 4% instead of 16% under the provisions of Section 5-B of the Andhra Pradesh General Sales Tax Act, 1957 (for short, the Act ); and (b) whether the order of penalty passed by the assessing authority and confirmed by the Appellate Deputy Commissioner under Section 7-A of the Act was justified particularly when Section 5-B itself provides for a penal provision. The assessment orders involved in the present five Revisions are of the years 2001-02, 2002-03, 2003-04 and 2004-05. 6. The brief facts relevant for the adjudication of the disputes in the present batch of Revisions are that the petitioner-assessee is engaged in the business of executing works contract within the erstwhile composite State of Andhra Pradesh. For the purpose of operation of the business, the petitioner had filled up Capital G-1 Form as is required under Section 5-B of the aforesaid Act. In the said form, the petitioner had shown cement as one of the raw materials used. For the purpose of getting registered with the Commerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.07.2001, wherein cement was included in the list of goods which would not be entitled for being purchased at a concessional rate, the assessing authority imposed penalty against the petitioner to the tune of three (03) of times the difference of tax payable by the petitioner. The order of penalty was also challenged before the Appellate Dy. Commissioner who too confirmed the penalty order which led to filing of appeal by the petitioner before the Sales Tax Appellate Tribunal, Andhra Pradesh, at Hyderabad in Tribunal Appeal No. 866 of 2005 and batch. However, the Tribunal also confirmed the penalty order and also the order of the Appellate Dy. Commissioner leading to filing of present Tax Revision Cases. 9. Learned counsel for the petitioner contended that the order passed by the Appellate Dy. Commissioner in deleting cement from G2 registration certificate was bad in law. Firstly, the petitioner had specifically declared before the authorities that cement was a raw material and that he was using it for the execution of works contract and RMC for which cement is again raw material for preparation of ready-mix concrete and thus, he was justified in purchasing cement at co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that since the petitioner rightly or wrongly had a valid G2 registration certificate issued from a competent authorized authority and the item cement getting deleted from the said registration certificate only w.e.f. 28.02.2005, under no stretch of imagination, according to petitioner, can he be penalized and the order of penalty on this ground also is liable to be set aside. 13. Per contra, learned Senior Standing Counsel for the respondent-State opposing the petition, contended that when once the Government had issued the G.O. on 17.07.2001 and which was well within the knowledge of the petitioner, there was no reason why the petitioner should have purchased cement against the G Forms and the authorities, therefore, were justified in issuing the impugned assessment order and penalty proceedings disentitling the petitioner from purchase of cement at reduced rate. According to him, the fact that petitioner had deliberately purchased cement under G forms, in spite of having knowledge of the same, stands established from the purchase of cement by the petitioner even after issuance of the show-cause notice at the first instance on 03.02.2005. Thus, it cannot be said tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner continued to purchase cement against the G Forms at a concessional rate. 17. From the aforesaid factual matrix of the case, prior to issuance of the G.O. dated 17.07.2001, cement was one of the item which was eligible to be purchased at a concessional rate. It was in this context that the authorities at the earliest time had issued the G2 registration certificate permitting the petitioner to purchase cement at a concessional rate. However, after issuance of the G.O. dated 17.07.2001, the petitioner was not entitled for purchase of cement at a concessional rate. In spite of this, petitioner continued to purchase cement at a concessional rate against the G Forms. True, it is went unnoticed at the hands of the respondent so far as permitting the petitioner to purchase cement at a concessional rate even though the G.O. was in force since 17.07.2001. Therefore, the petitioner, beyond 17.07.2001, could not have purchased cement at a concessional rate and petitioner continued to purchase cement against the G Forms basing on the G2 registration certificate issued much before 17.07.2001. 18. It would be relevant at this stage to take note of the proviso to G.O. dated 17.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual matrix in the instant case is again that the notices issued for the penalty proceedings was under Section 7-A(2). The said proviso is attracted only when a dealer produces a false bill, voucher, declaration, certificate or any other document for a purchase to be effected at a reduced rate. This, in fact, is not the case of the respondent at all. The stand of the respondent all along was that the petitioner was liable to pay penalty under Section 5-B(2). For ready reference, both these two penal provisions would be required to be appreciated and they are reproduced as under, viz., Section 5-B(2) : If any dealer, -- (i) not having his manufacturing unit within the State purchases any goods by furnishing a declaration under the proviso to subsection (1); or (ii) having his manufacturing unit within the State and having purchased goods by furnishing a declaration under the proviso to sub-section (1) sells such goods contrary to such declaration, the assessing authority, may after giving such dealer a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum which shall not be less than three times but which may extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner never had an occasion of defending himself in a penalty proceedings under Section 5-B(2). What is also required to be appreciated is that Section 7-A(2) and Section 5-B(2) are both independent penal provisions. Separate proceedings have to be drawn for each of the provisions. In the instant case, there does not seem to be any corrigendum or rectification order issued by the respondent for treating the notice under Section 7-A(2) as notice under Section 5-B(2) either before imposing of the penalty or subsequently, except for the admission on their part in the reply in Writ Petition No. 14484 of 2005. 24. For the aforesaid reasons, since the petitioner never had an occasion to defend himself under Section 5-B(2), the entire proceedings initiated against the petitioner so far as imposing penalty is concerned under Section 7-A(2) stands vitiated as the petitioner has taken a stand that the penalty to be imposed against the petitioner was not under Section 7-A(2) but under Section 5-B(2). 25. In view of the same, the orders passed by the Sales Tax Appellate Tribunal, Andhra Pradesh, at Hyderabad confirming the order of penalty by the Appellate Dy. Commissioner and the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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