SUMO FOODS PRIVATE LIMITED Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) THE petitioner invokes the extraordinary jurisdiction of this court under Article 226 of the Constitution of India with a prayer to issue writ of certiorari and to call for the records relating to the penalty order of the Commercial Tax Officer -respondent in Rc. No. SAR/02/3/2883/2004 -2005 (Penalty), dated October 27, 2005, and quash the same.

(2.) THE petitioner is a company registered under the Companies Act, 1956. It is a dealer carrying on business in manufacture of biscuits. There is no controversy that the petitioner has been declared as eligible for incentives under G. O. Ms. No. 108, Industries and Commerce Department, dated May 20, 1996, and accordingly it was extended tax holiday benefit subject to a maximum of Rs. 1,85,81,670 which could be availed for a period of seven years from the date of commencement of commercial production.

(3.) BE that as it may, the respondent herein issued show cause notice, dated October 27, 2005, proposing to levy penalty of Rs. 1,42,13,160 under Section 5B(2)(ii) of the Andhra Pradesh General Sales Tax Act, 1957 (for short, "the Act") on the purported ground that the purchase of light diesel oil by the petitioner against "G" form and use of the same for manufacture of the branded biscuits of Parle products as part of the job -work is in violation of Section 5 -B(2)(ii) of the Act, hence the petitioner is liable to pay the penalty at five times the tax payable on the purchase turnover. The petitioner promptly filed its explanation on October 19, 2005, inter alia, contending that Section 5B(2)(ii) of the Act does not attract the fact -situation on hand since it does not fall under either of the limbs mentioned in Clauses (i) and (ii) of the said Sub -section and in any event use of the light diesel oil in the course of manufacturing of biscuits is not in violation of Section 5B(2)(ii) of the Act.