AMBICA LAMP HOUSE RAJAHMUNDRY Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) : These writ petitions are filed by the dealers registered under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 carrying on various businesses, assailing the action of the Vigilance Wing of the Sales Tax Department, and praying for the issue of writ of mandamus declaring such action of collecting the tax as well as the compounding fee, without framing necessary assessments determining the tax liability or passing orders, coercing the dealers for compounding the alleged offence and collecting the compounding fee on the day of inspection either through payment of cash or through post dated cheques, as illegal, and contrary to the provisions of law as well as the judgments rendered by this Court, and consequently sought for a direction to the respondents to refund the amounts collected from the dealers with interest.

(2.) According to the learned Counsel for the petitioners the modus operendi adopted by the department, especially by the Intelligence Wing is that they will inspect the business premises of the dealer and on the alleged irregularities found in the course of inspection they used to obtain statements from the persons, who are available at the business premises at the time of inspection by force or coercion threatening to seize the stock or close down the business and thereupon collect the tax for the alleged suppression of the sales turnover and also demand for compounding the alleged offence on the very same day and creates the record as if a show cause notice was issued and a reply was given on the same date and also passing an order accepting the offence for compounding the offence by levying the compounding fee, which is almost equivalent to the alleged tax found due on the suppressed turnover. The department officials also collect the cash if available on the spot or if it is not available they will collect postdated cheques, and thereafter there will not be any further proceedings either for assessment or otherwise. It is contended on behalf of the Counsel appearing for the petitioners that this action of the department was deprecated by this Court in number of writ petitions, and in spite of it, the department did not mend its ways and has been repeating the same by forcing the dealers only to give statements, accepting the alleged irregularities or suppressed turnover and collecting the tax on the alleged suppressed turnover as well as compounding fee as if the dealer had conceded and offered for compounding. The entire exercise will be completed within a day or two at the most The said procedure that is being adopted by the officials of the department is even contrary to the provisions of the Act and the Rules made thereunder. Therefore, the learned Counsel sought for the issue of appropriate writ declaring the said action as illegal and unsustainable.

(3.) Counters have been filed on behalf of the respondents in some of the writ petitions supporting their action. The stand of the department is that whenever the Vigilance Cell/Enforcement Wing gets some credible information with reference to the illegal activities indulged by the dealers for evasion of the tax, the officials of the department with proper authorization from the concerned authority inspects the entire premises, records as well as the stocks during the business hours, and wherever there is improper maintenance of the accounts or the stock was not properly recorded showing the suppressed turnover with reference to the said turnover tax was sought to be recovered, and when penal action was proposed, the dealers have come forward seeking compounding the offence in order to avoid further penal action. Therefore, the department was accepting the request of the dealers and collecting the tax as well as compounding fee in respect of the suppressed turnover. It is also the stand of the department that the department never coerced the dealers to give statements accepting the suppressed turnover or unaccounted turnover. In fact, the dealers have come forward voluntarily and have agreed for settlement of the irregularities by getting the offence compounded, apart from paying the tax. Therefore, there is no illegality or irregularity.