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2025 DIGILAW 537 (TS)

Fortune Biotech Ltd. v. Dy. C. T. O. Abids Hyd

2025-04-30

P.SREE SUDHA, T.VINOD KUMAR

body2025
ORDER : T.Vinod Kumar, J. Heard learned counsel for the petitioner, learned Special Standing Counsel appearing for Commercial Taxes and perused the record. 2. The briefly stated case of the petitioner is that, it is a company, engaged in the manufacture and marketing of Neem based pesticides and is a registered dealer on the file of the 2nd respondent; and that it has been granted sale tax deferment in terms of the industrial policy by the competent authority. 3. It is the further case of the petitioner that during the years 2005-06 and 2006-07, petitioner had affected sale of various products manufactured by it and disclosed the turnover of such sales in the returns filed before the 2 nd respondent-authority. 4. It is also the case of the petitioner that in terms of the provisions of the VAT Act, 2005 as it is entitled to claim input tax credit in respect of goods purchased from VAT dealer within the state of Andhra Pradesh, and used in the manufacture of its products; that it had furnished the details of such tax paid purchases in the monthly returns filed by it and claimed deferment of sales tax payable on its final product under deferment of tax facility extended to it, whereby sales tax payable on its VAT output tax is treated as interest free loan extended to the petitioner-industry. 5. It is the further case of the petitioner that on the basis of the observations made in the course of VAT audit, the 1st respondent had issued with a show-cause notice, dt. 30.09.2008 in Form VAT 305A calling upon the petitioner to submit its written objections along with documentary evidence within (07) days from the date of receipt of the said notice; that the aforesaid notice though is dt. 30.09.2008, was served on the petitioner on 10.11.2008; and that on receipt of the aforesaid notice in Form VAT 305A, the petitioner by its letter, dt. 22.10.2008, had sought time of 15 days to file detailed objections to the proposed assessment for the tax period 2005-06 and 2006-07. 6. Petitioner further contends that at the first instance, the petitioner having sought 15 days time to file its objections/explanation to the proposals made in the show-cause notice, and the said request having been acceded to by the 1 st respondent-authority, even before expiry of said 15 days time, it was issued with notice, dt. 6. Petitioner further contends that at the first instance, the petitioner having sought 15 days time to file its objections/explanation to the proposals made in the show-cause notice, and the said request having been acceded to by the 1 st respondent-authority, even before expiry of said 15 days time, it was issued with notice, dt. 04.11.2008, claiming that the 15 days time sought for under the cover of letter, dt. 22.10.2008, is over by 03.11.2008, and since, no explanation/objections are filed, in order to offer a final opportunity, the petitioner was called upon to file objections, in three days i.e., by 06.11.2008, failing which the petitioner was informed that necessary orders would be passed as deemed fit. 7. Petitioner further contends that the aforesaid notice, dt. 04.11.2008 has been served on the petitioner only on 06.11.2008, that too, even before the expiry of 15 days time granted in response to the notice, dt. 22.10.2008. It is further contended by the petitioner that due to the change in its staff, it had addressed a letter dt. 10.11.2008 to the 1 st respondent seeking further time of (15) days to file its objections. 8. Petitioner further contends that on it filing the aforesaid letter seeking further extension of time of (15) days, the respondent- authority neither rejected nor refused to grant such time and since the 2 nd respondent-authority had accepted the request made by the petitioner under the cover of letter, dt. 10.11.2008, it had approached the respondents-authorities on 22.11.2008 and attempted to submit the explanation/objections, in the office of the 1 st respondent. It is contended by the petitioner that as the staff of respondent were on pen-down strike from 22.11.2008 to 26.11.2008, the said objections were not received. 9. It is the further case of the petitioner that at an earlier point of time pursuant to the notice dt. 18.10.2007, issued by the 1st respondent, the petitioner had submitted a detailed reply giving voluminous information by way of various annexures vide letter, dt. 21.10.2007, which was duly acknowledged by the 1 st respondent on 23.10.2007, and as such, even though the explanation/objection of the petitioner dt. 22.10.2008 was not received by the office of the 1 st respondent, the record available with the 1 st respondent has all the details in respect of the issues, which were subject matter of the show-cause notice, dt. 22.10.2008 was not received by the office of the 1 st respondent, the record available with the 1 st respondent has all the details in respect of the issues, which were subject matter of the show-cause notice, dt. 30.09.2008; and thus, the 2 nd respondent- authority ought to have considered the same while passing the impugned assessment order. 10. Petitioner further contends that while the respondents- authorities did not receive the explanation sought to be submitted by the petitioner on 22.11.2008, on account of strike in their office, however claim to have passed assessment order, and the petitioner was surprised to receive the impugned order of assessment in Form VAT-305, dt. 27.11.2008, passed by the 1st respondent, whereby the 1 st respondent had confirmed the proposals made in the show-cause notice issued in Form VAT-305A, on the ground of the petitioner did not submit any explanation, despite having been granted sufficient time to file its objections and documentary evidence, thereby resulting in demand of tax payable in a sum of Rs.25,20,302/-. 11. Petitioner contends that immediately on receipt of the aforesaid order of assessment, it had addressed a letter dt. 29.11.2008, giving detailed reasons, as to why the petitioner could not submit its reply, dt. 22.11.2008, which was beyond the control of the petitioner, and sought to withdraw the assessment order. 12. Petitioner further contends that as the respondents-authorities did not consider the aforesaid request made by the petitioner to withdraw the assessment order, passed by the 1 st respondent- authority, without granting an opportunity of personal hearing to the petitioner, the said order is to be considered as having been passed in violation of principles of natural justice, and is thus liable to be set aside, and it is for the said reason, the petitioner has filed the present Writ Petition. 13. In support of the above contentions, reliance is placed on Sri Balaji flour Mills v. Commercial Tax Officer-II, Chittoor , [ (2011) 40 VST 150 ] , Dekars Fires & Security Systems Pvt. Ltd. v. The Deputy Commissioner(CT) , MANU/AP/1281/2011 , M/s. Vision Ventures P Limited., S.R.Nagar, Hyderabad v. State of AP., Revenue Dept., Hyderabad and 2 others , order, dt. 16.11.2022 in WP.No.21798 of 2006 , M/s. Plastopack, Hyd. v. The Commercial Tax Officer, Hyd, and Another, Order dt. 31.10.2022 in WP.No.14195 of 2007 , National Textile Corporation Ltd. v. Nareshkumar Badrikumar Jagad and Ors. 16.11.2022 in WP.No.21798 of 2006 , M/s. Plastopack, Hyd. v. The Commercial Tax Officer, Hyd, and Another, Order dt. 31.10.2022 in WP.No.14195 of 2007 , National Textile Corporation Ltd. v. Nareshkumar Badrikumar Jagad and Ors. , [ AIR 2012 SC 264 ] Jagmittar Sain Bhagat v. Dir. Health Services, Harayana and Ors., AIR 2013 SC 3060 and S.Lalaih & Co. v. The Deputy Commissioner(CT), Order dt. 07.08.2007 in WP.No.15176 of 2007. 14. Per contra, learned Special Standing Counsel appearing on behalf of respondents by drawing attention of this Court to the order in Form VAT 305 would contend that the request made by the petitioner on 10.11.2008 for grant of time of 15 days has not been acceded to by the authority in its entirety and the time was restricted till 17.11.2008 by making an endorsement to the said affect on the acknowledgment issued to the petitioner and that the petitioner suppressing the aforesaid endorsement made on the office copy of the letter given to him has filed the present Writ Petition. 15. Learned Special Standing Counsel would contend that in response to the request of the petitioner, vide letter dt. 10.11.2008, the time having been granted to the petitioner to submit explanation/ documents only till 17.11.2008, the petitioner cannot claim of it approaching the respondents-authorities on 22.11.2008 and seeking to submit the information, and the said explanation/documents not being received by the respondents-authorities on account of pen-down strike of the staff of the 1 st respondent from 22.11.2008 to 26.11.2008. 16. Learned Special Standing Counsel would further contend that the petitioner is only seeking to take advantage of the pen-down strike resorted to by the staff of the 1st respondent-Office during the said period to contend that it had sought to file the explanation. 17. It is also contended by the learned Special Standing Counsel that if the petitioner, in fact, had approached the respondents- authorities and sought to submit its explanation on 22.11.2008, as being claimed, and the same being refused to be received by the staff of the 1 st respondent-office, nothing prevented the petitioner from sending the same by registered post on the same or the following day, which in fact the petitioner did not do, and more so, the time granted for filing explanation having lapsed by 17.11.2008 itself. 18. 18. It is also contended by the learned Special Standing Counsel that if the petitioner is aggrieved by the impugned order passed by the 1 st respondent on 27.11.2008, and having approached the Deputy Commissioner of the Division on 29.11.2008, could not have waited for a further period of nearly one month for filing the present writ petition before this Court on 26.12.2008, which incidentally is the last date of limitation period prescribed for filing an appeal under the provisions of the Act, and the said ground is invented for the purpose of filing of the present Writ Petition. 19. Learned Special Standing Counsel would further contend that even a perusal of the letter dt. 22.11.2008, which the petitioner claims of having sought to be filed on 22.10.2008, does not provide any documents in support of its contentions to the proposals made in the show-cause notice in Form VAT-305A i.e., with regard to denial of input tax credit, exemption of sales, in-eligible sales under deferment, restriction on ITC, differential turnover as per Profit & Loss account and miscellaneous income, for the petitioner to claim of it having submitted the required documentary evidence in support of its claim. 20. Insofar as the claim of the petitioner of the 1 st respondent not having authorization to cause assessment, learned Special Standing Counsel would contend that the assessment order has not been challenged before this Court on the ground of the authority lacking separate authorization for causing audit and assessment; and that the assessment order having been passed based on combined authorization for audit and assessment. It is contended that since, no such plea is taken, the petitioner cannot be allowed to agitate the said plea. 21. We have taken note of the respective contentions urged. 22. Though on behalf of the petitioner it is contended that despite it trying to file its objections to the show-cause notice in Form VAT 305A, dt. 30.09.2008 on 22.11.2008, the said explanation not being received by the staff of the 1st respondent due to the pen-down strike between 22.11.2008 to 26.11.2008, it is to be noted firstly, that the impugned order of assessment records the time for filing explanation/objections to the show-cause notice in furtherance of the letter, dt. 30.09.2008 on 22.11.2008, the said explanation not being received by the staff of the 1st respondent due to the pen-down strike between 22.11.2008 to 26.11.2008, it is to be noted firstly, that the impugned order of assessment records the time for filing explanation/objections to the show-cause notice in furtherance of the letter, dt. 10.11.2008, having been restricted to 17.11.2008, the petitioner cannot claim of it trying to file explanation by approaching the office of the 1st respondent on 22.11.2008 i.e., beyond the time granted to it. Secondly, as rightly contended by the learned Special Standing Counsel nothing prevented the petitioner from sending the aforesaid explanation by post either on the same day or the following day, when the same was refused to be received by the staff of the 1 st respondent. Further, a perusal of the alleged explanation, which the petitioner claims it had sought to file with the respondents- authorities on 22.11.2008, would also show that the contents of the said explanation do not address the proposals, for which the petitioner is required to submit its explanation under the show-cause notice issued in Form VAT 305A. 23. Thus, this Court is of the view that the claim of the petitioner of it having sought time of 15 days by letter, dt. 10.11.2008, and having tried to file its objections on 22.11.2008, and the said explanation having been refused to be received by the office of the 1 st respondent, in the considered view of this Court, is only trying to take advantage of the situation existing between the period 22.11.2008 and 26.11.2008, and thus, cannot be accepted as a valid justification or defence. 24. Further, it is also to be noted that the petitioner on being served with the impugned order of assessment, dt. 27.11.2008, having approached the Deputy Commissioner of the concerned Division by submitting a representation, dt. 29.11.2008, however, did not take any steps to challenge the said order, immediately. In fact, the present Writ Petition has been filed on the 30 th day of the limitation prescribed under the Act for filing an appeal, which in the considered view of this Court is only to get over the mandatory payment of 12.5% of tax as a pre-condition for filing the appeal. 25. In fact, the present Writ Petition has been filed on the 30 th day of the limitation prescribed under the Act for filing an appeal, which in the considered view of this Court is only to get over the mandatory payment of 12.5% of tax as a pre-condition for filing the appeal. 25. Though by relying on the decision of this Court in Balaji flour Mills ’s case(1 supra), it was contended that the 1 st respondent- authority could not have passed an order of assessment pursuant to the authorization issued for conducting audit, the said plea has not been taken by the petitioner in the writ petition either at the time of filing or during the pendency of the matter, by seeking amendment, even though the writ petition has been pending on the file of this Court, even long after the afore cited decision is rendered. 26. As noted hereinabove, since, the petitioner did not during the pendency of the present Writ Petition seek amendment of the prayer with regard to the 1 st respondent not having authorization to cause assessment on the basis of the authorization issued for audit, the respondents did not have the opportunity to contest the said claim either by accepting or otherwise of the 1 st respondent having authority to pass the assessment order after audit by considering report of the Auditing Officer. 27. It is settled position of law that the Court cannot make out a case in favour of the petitioner when the petitioner himself did not take steps for seeking such a relief as held by the Apex Court in Bharat Amratlal Kothari v. Dosukhan Samadkhan Sindhi & Ors , [ (2010) 1 SCC 234 ] , wherein it was observed as under: “Though the Court has very vide discretion in granting relief, the Court, however, cannot, ignoring and keeping aside the norms and principles governing grant of relief, grant a relief not even prayed for by the petitioner.” 28. In Akella Lalitha vs Konda Hanumantha Rao & Anr., 2022 SC Online SC 928 the Apex Court by following the aforesaid principle, has observed as under: “If a Court considers or grants a relief for which no prayer or pleading was made depriving the respondent of an opportunity to oppose or resist such relief, it would lead to miscarriage of justice” 29. Further, it is also to be noted that while the petitioner claims of it having been granted 15 days time pursuant to the letter, dt. 10.11.2008, the respondents on the other hand claim of the said request for grant of time having been restricted to 17.11.2008, and the petitioner having approached this Court by suppressing the said Act, the said controversy being a disputed question of fact cannot be gone into in a writ petition filed under Article 226 of the Constitution of India [See City & Industrial Devt.Corp vs Dosu Aardeshir Bhiwandiwala & Ors , [ 2009(1) SCC 168 ] ]. 30. As this Court has now come to a conclusion that the present Writ Petition has been filed by the petitioner only to bypass the remedy of appeal provided under the VAT Act, 2005, by making claims, which prima facie, appear to be contrary to the record, this Court is of the view that the present Writ Petition as filed is not maintainable and petitioner should be relegated to avail the remedy of appeal provided under the Act. 31. However, taking note of the fact that the petitioner having filed the present Writ Petition on 26.12.2008, and since the Act provides for limitation of 30 days for filing such appeal by conferring power on the authority to condone the delay of further period of 30 days, this Court is of the view that while the petitioner should be relegated to avail the remedy of appeal against the impugned order of assessment in Form 305, dt. 27.11.2008, the appellate Authority under the VAT Act, 2005 is to be directed entertain the appeal if such an appeal is filed within (30) days from the date of receipt of a copy of the order, along with an application seeking condonation of delay, and by making mandatory payment of 12.5% of tax, and decide the same on merits. 32. Subject to the above observation and direction, the Writ Petition is disposed of. No order as to costs. Miscellaneous petitions, if any, pending in this writ petition shall stand closed.