MCDOWELL AND COMPANY LIMITED Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) HEARD learned counsel for the parties. With the consent of the learned counsel for the parties this writ petition is hereby finally disposed of.

(2.) IT appears for the months of June and July, 1994, there was a provisional assessment against the petitioner under section 15 of the Andhra Pradesh General Sales Tax Act, 1957, and an additional tax liability of Rs. 70,00,000 was created against the petitioner. The petitioner filed appeal along with an application for stay. The stay application was rejected. A revision petition filed against that was also rejected. Under these circumstances, the learned counsel for the petitioner-company did not dispute that the first respondent was entitled to recover the amount of Rs. 70,00,000 as per the provisional assessment under section 15 of the Andhra Pradesh General Sales Tax Act, 1957. What he argued was that in execution of the provisional assessment order, the first respondent first issued a garnishee order under section 17 of the Andhra Pradesh General Sales Tax Act, 1957, on February 3, 1995 against the third respondent directing it to pay a sum of Rs. 70,00,000 to the Sales Tax Department out of the amount payable by it to the petitioner. It is not disputed by the learned Government Pleader that in pursuance of this garnishee order a sum of Rs. 33,31,254 was actually paid to it by the third respondent. Thereafter a fresh garnishee order dated February 28, 1995 was issued against the second respondent which happens to be the bankers of the petitioner-company requiring it to pay a sum of Rs. 37,63,000 against the balance of the dues against the petitioner-company as per the provisional assessment order made under section 15 of the Andhra Pradesh General Sales Tax Act, 1957, for the months of June and July, 1994. This second notice under section 17 of the Andhra Pradesh General Sales Tax Act, 1957, issued against the second respondent is challenged by filing this writ petition. According to the learned counsel for the petitioner when the first garnishee order issued against the third respondent is still existing and the third respondent is still indebted to the petitioner-company to the extent of a sum which is more than the amount outstanding against the dues demanded by the department, the powers under section 17 of the Andhra Pradesh General Sales Tax Act, 1957, could not have been re-exercised by the Department and a fresh garnishee order against the second respondent could not have been issued restraining it to pay the amount to the petitioner-company to the extent mentioned in the notice.

(3.) WE find it difficult to accept the arguments of the learned Government Pleader. Admittedly, the first garnishee order issued against the third respondent has not been withdrawn and is still subsisting. In pursuance of that garnishee order, the third respondent has also paid a sum of Rs. 33,31,254 to the Department. It has not come forward to say that it does not owe any further amount to the petitioner-company. Under these circumstances, we find that there was no justification by the department to issue fresh garnishee order against the bankers of the petitioner-company and to ask it to pay the amount demanded. For these reasons, we are of the view that this petition deserves to be allowed by quashing the impugned garnishee order dated February 28, 1995.