AMBICA OIL MILL Vs. COMMERCIAL TAX OFFICER HYDERABAD

JUDGEMENT

(1.) The petitioner is a registered dealer under the Andhra Pradesh General Sales Tax Act. In respect of the assessment years 1981-82 and 1982-83 the petitioner was assessed to sales tax and he filed appeals before the Deputy Commissioner (Appeals) in respect of those assessments. The complaint of the petitioner is that even though he had paid substantial amounts towards arrears dues in respect of the turnover of M/s. Ambica Oil Mill of which the petitioner was the proprietor an amount of Rs. 1,03,181 which was tax due in respect of another dealer M/s. Kamal Oil Mill, for the assessment years 1980-81 and 1981-82, was sought to be recovered from him. In his letter dated 12/02/1987, he stated that he was not in any manner connected with M/s. Kamal Oil Mill, and therefore, he was not liable to pay arrears of sales tax recoverable from that dealer. It is submitted that in spite of this definite factual and legal position, the respondents have been issuing notices under section 17 of the Act, for recovery of the above arrears due from M/s. Kamal Oil Mill. His bank accounts were also attached. It is also stated that the respondents coercively collected an undertaking from the petitioner that he would pay the tax due from M/s. Kamal Oil Mill in the event of dismissal of its appeals. On 11/02/1987, the respondents issued a distraint order under the Revenue Recovery Act, for recovery of the disputed tax allegedly due from M/s. Kamal Oil Mill. The petitioner's case is that he is not connected, in any manner, with M/s. Kamal Oil Mill, and the attempted recovery of tax due from that mill by distraint under the Revenue Recovery Act, is illegal and unsustainable. He, therefore, seeks issuance of a declaration that the distraint order dated 11/02/1987, issued by the first respondent to recover a sum of Rs. 1,03.181 is illegal and arbitrary. He also seeks quashing of that order, and any proceeding for recovery of the alleged arrears due from M/s. Kamal Oil Mill from him. It is also submitted that the distraint orders in respect of the amounts due for the assessment years 1981-82 and 1982-83, are unenforceable in view of the appellate order dated 23/12/1985 in respect of his proprietary business, leaving the balance of Rs. 1,03,181 alone which represents the arrears due from the aforesaid Kamal Oil Mill.

(2.) The respondents have filed a counter-affidavit stating that the petitioner is the younger brother of Om Prakash, who, along with the petitioner and another brother Kamal Kishore, were doing business in groundnut oil under the name and style of M/s. Kamal Oil Mill by obtaining the mill on lease from Smt. Ratan Bai. It is asserted that all the brothers were and are living together in the same residential house. The business premises of M/s. Kamal Oil Mill was inspected by the Commercial Tax Officer (I) No. III on 13/10/1981. Sri Om Prakash closed the business of Kamal Oil Mill from the next day, that is, 14/10/1981. Within three days M/s. Ambica Oil Mill was registered in the name of the petitioner on 16/10/1981. The business is being conducted in the same premises under the same lease deed as M/s. Kamal Oil Mill. The Commercial Tax Officer, who passed the order dated 7/07/1984 issued a demand for Rs. 1.05,185 as the amount of tax due from M/s. Kamal Oil Mill. Sri Om Prakash filed an appeal against the above order and the appeal is still pending. He also filed a Special Appeal No. 75/85 under section 23 of the Andhra Pradesh General Sales Tax Act, 1957, before this Court. By order dated 11/12/1985 this Court directed that :

(3.) It is stated that the petitioner did not comply with the above order. It is asserted that Sri Venu Gopal, the petitioner herein, is only a nominal proprietor of M/s. Ambica Oil Mill and actually the entire business is being conducted by Sri Om Prakash. It seems Sri Om Prakash gave a letter of undertaking to the Commercial Tax Officer, Lad Bazar, Hyderabad on 14/05/1986 stating that he was the manager of M/s. Ambica Oil Mill and was looking after the affairs and managing the business of M/s. Ambica Oil Mill. He also paid a sum of Rs. 10,000 towards part payment of tax due from M/s. Kamal Oil Mill and agreed to pay the balance amount in monthly installments. Sri Venu Gopal, the petitioner herein, has agreed to recover the balance amount from M/s. Ambica Oil Mill in case his brother (Om Prakash) did not pay the balance due in respect of M/s. Kamal Oil Mill. It is also stated that on 24/06/1986, Sri Om Prakash paid a further sum of Rs. 2,000 as part payment leaving a balance of Rs. 93,185 for the year 1981-82 under the Act and a sum of Rs. 9,996 under the Central Sales Tax Act for the year 1980-81. It is also stated that neither the petitioner, nor Sri Om Prakash had paid the balance amount so far. Proceedings under section 17 of the Act were initiated and a notice was issued on 9/10/1986 attaching the bank account of the petitioner in the Union Bank of India. As there was no balance in the bank account of the petitioner distraint order dated 11/02/1987 was issued. It is submitted that the facts and circumstances mentioned above clearly indicate that tire petitioner was only a nominal proprietor of M/s. Ambica Oil Mill which is virtually a continuance of M/s. Kamal Oil Mill which was being conducted at the same premises under the same lease as M/s. Kamal Oil Mill. It is also asserted that the relationship of the petitioner with Sri Om Prakash and the fact that he was a partner of M/s. Kamal Oil Mill, obligate him to pay the arrears due in accordance with provisions contained in section 16-A of the Act. It is further asserted that even assuming that he was only a transfer, he has to pay the arrears due by virtue of the provisions contained in section 18 of the Act.