The High Court · 2025

pending disposal of the writ petition as otheruyise the pet t rner will be put to severe loss and hard ship. Counsel for the Petitioner: SRI S. DWARAKANATH FOR SRI KARTHIK RAMANA PUTTAMII :DDY Counsel for the Respondents: SRI CHAITANYA KIRAN, AGr REPRESENTING SRI SWAROOP OORILLA, SPECIAL GP FOR SI {TE TAX The Court made the following: ORDER THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO W.P.No.l4000 OF 2008 ORDER: (per tlon'ble Sri .htsticc t'.Sam Koshy) Heard Mr. P.Karthik Ramana, Ieamed counsel for the petitioner and Mr. T. Chaitanya Kiran, leamed Assistant Government Pleader representing Mr. Swaroop Oorilla, learned Special (iovernment Pleadel'fbr the State -fax for the respondents Peruscd the record. ). 'l'[re present is a writ petition which has been filed assailing the order dated 28.05.2008 (Arurexure P-3) passed by tirc Assessing Ollicer in G.l.No. t6 l7103 O4iCST.

3. 'Ihe challenge to the said order primarily is that the Assessing Olficer has in excess of his jurisdiction passed the impugned order on 28.05.2008.

4. The matter revolves around two Govemment Orders i.e., G.O.Ms.No.552 dated 12.09.2002 and G.O.Ms.No.554 also dated

12.09.2002 wherein it has been reflected that the tax collected on 2 purchase of raw material has to be reduced on the l. r leviable on sale of the finished products in interstate sales

5. Initialll,, the Assessing olftcer had passed ar trder against the petitioner holding that tlrc pctitioner would not le entitled for the set otl ol cntry tax paid on the raw materials sr, rurchased by them vide his order dated 29.03.2007 (Annexure I , L ). 'fhc said order was challenged in an appeal before the Ap r ,llate Deputy Comrnissioner vidc Appeal No.S/13/07-08. Thc .rppeal sLood partly allorvcd in lavotrr ol thc petitioner and so t-ar the question of set otT <l1' cntry tax paid on purchase of raw rrr I rrial in tcrms of G.O.Ms.No.554 dated 12.09.2002 is conccmed. he Appellate Deputy Cornrrrissioncr has hcld as under: "lt is observed that in terms of G O Ms.Nc 552 dated 12.09.2002 and in terms of G O.Ms.Nc 554 dated 12 09.2002. Wherein the word 'like' is ussr the tax collected on purchase of raw material is t be reduced from tax payable on sale of finrshed pr()( Jcts in interstate sales. Thus the benefit of G O.Ms Irc 554 dated 12.09.2002 for set off entry tax is availab e to the appellant and the entry tax paid on them is 1 ) be quantified correctly. Thus the appeal on this p; rt is remanded to the assessing authority directing lr n to quantify the entry tax paid and grant relief f und eligible as per law". 3

6. From the plain reading of the observation made by the Appellate Deputy Commissioner, it is apparently evident that the Appellate Deputy Commissioner had, in fact, partly accepted the contention of the petitioner insolar as making the petitioner eligible for set offolentry tax on the purchase ofraw material and it is also apparent from the said order that after accepting the contention of the petitioner, the Appellate Dcputy Commissioner has remanded the matter to the Assessing Officer. only on the point ol quanl.ification of the entry tax payable by the petitioner and for granting of appropriate relief insofar. as entry tax paid by them. However, aIler the afor.esaid clear order passed by the Appellate Deputy Commissioner when the matter stood remanded before the Assessing Officer whcre the nature of the responsibility casted upon the Assessing Officer was only to quantifu the amount of entry tax paid. The Assessing Officer took an altogether different route and again ventured into deciding the entitlement of the petitioner so far as the raw material used by the petitioner is concemed and in the process ovemrled the order passed by the Appellate Deputy Commissioner and went on holding that the petitioner is not entitled for set off of entry tax paid on the raw 4 material used by the petitioner. This, in the o : nion of the petitioner, is in excess of jurisdiction and literally I mounting to sitting over the ordel of tlic Appcllate Authority rL: d testing its veracity, which otherwise was not $'ithin the powers ol an olllcer subordinate to thc Appellate Deputy Cornmission: The only course available to the deparlment or for tl'rat mattet hc Assessing Officer rvas in making efforts in ensuring that the vit' ' and opinion expressecl by the Appettate Deputy Commissior.rer ir subjected to revision by the depat'tmerlt urldcr Scction 20 ;\ I lhra Pradesh General Sales Tax Act, 1957. Though the leamed : lol the 'unsel State contcnded that once when thc tnatter stood re I anded, it was the Assessing Officer thereafter to decide u'hether t I : claim raised by the petitioner for set off of entrl' tax was in accor c lnce with law or not and, therelbre, it does not warrant interlt'ence, as the opinion expressed by the Assessing Officer is also lausible view that could be taken, parlicularty keeping in vierv I e word 'like' which was referred to in G.O'Ms.No.552 and 55'1 're concemed, rvhich all the more reduced the scope of interference ' 7 Having heard the contentions put-forth on e ther side and perusal of the record, undoubtedly the App:llate Deputy 5 Commissioner had rcversed the remand order of the Assessing Officer dated 29.03.2007 vide his order dated 06'12'2007 ' The operative part of thc order is that which has already been reproduced in the preceding paragraphs. As has been discussed earlier, it has been categorically held by the Appellate Deputy Commissioner that the tax paid on the purchase of raw material used by the petitioner rvould be available for them for set off and second that the remand was only to the extent of making quantihcation by the Assessing Officer. However, the Assessing Officer in the course of passing of the order made the following observations "This amount represents the Entry Tax paid by the assessee company in respect of its purchases from outside the States. which is claimed by way of set off in terms of G.O.Ms.No.552 Rev. dt.12-9-2002 and G.O.lvls-No. 554 Rev. dt 12-9-2002. The ADC has remanded the appeal directing to quantify the Entry Tax paid and to grant necessary relief. The assessee company furnished the details of outside purchases on which Entry Tax was paid along with proof of having paid the said Entry Tax. The items are either refrigerator parts or Air Condltioning parts', The Government notifications relied upon are seen' G.O.Ms.No. 552 is a notiflcation issued Under APGST Act and G.O.Ms-No. 554 is issued Under CST Act The notification - I in G.O.Ms.No.552 seeks to levy Entry 6 Tax on some I items mentioned ther: notification-ll speaks of reducing the tax ( respect of raw materials like, Alluminiurr cement, Atta, Maida, Sooji, Rawa and Whe e rt and /led rn . Flour, from out of the tax payable on frnished produ(it , Under APGST Act. This is suggestive of the intenti ) of the Government in restricting such set off only :: categories of raw materials. The use of the rv connotes 'raw material'but not 'components 1;r certain rrd like' ds'like compressors condensers etc. Had rt been the i ltention of the Government to extend the benefit of se to the component parts like compres s condensers as the case may be, it could have L ,ff even )rs or sed the words'--- whereon the purchase of the above 'r instead of 'whereon the purchase of raw mat'r Aluminium-----'. A careful and conscious rcl the notification suggests that the benefit of sr contemplated in notification-ll of G.O.Ms.No :> G.O.Ms. No.554, is available only on raw mat{) 'Aluminium, white Cement, Atta, Ivlaida, Soo i and Wheat Flour', but not to comprer;r condensers, as the case may be, as thev ateria ls als llke ding of : off as 2orin als trke Ravva 3TS OT do not answer to the description of 'raw materials' re f in the said notifrcations. Therefore the clair rrred to is not accepted and hence rejected".

8. This. in the opinion of the Bench, is (1) lor wh :h the matter was not remanded back at all; (2) the course a I rpted by the Assessing Officer amounts to sitting over the ,,rder of the Appellate Authority and deciding its merits and in he oourse of deciding whether the order passed by the Appellate r uthority was 7 proper, legal andjustified or not; (3) the order is one which isper se in excess of his jurisdiction, particularly when we read the nature of the role that the Assessing Officer. had to play in the context of the remand being made vide order dated, 06.12.200'7, as directed by the Appellate Authority. It would be relevant at this juncture to refer to the judgment of the Hon'ble Supreme Court in the case of UNION OF INDIA vs. KAMALAKSHI FINANCE CORPORATION LTD1 wherein in paragraphs 7 and g, the Hon'ble Court while dealing with similar situation where a subordinate officer took an entirely contrary view.that which was passed by the superior officer, has held as under:

7. The impression or anxiety of the Assistant Collector that, if he accepted the assessee's contention, the depa(ment would lose revenue and would also have no remedy to have the matter rectified is also incorrect. Section 35-E confers adequate powers on the department in this regard. Under Sub-section (1), where the Central Board of Direct Taxes come across any order passed by the Collector of Central Excise with the legality or propriety of which it is not satisfied, it can direct the Collector to apply to the Appellate Tribunal for the determination of such points arising out of the ' 1992 Supp (i) Supreme Court Cases 443 8 decision or order as may be specified by the l order. Under Sub-section (2) the Collector r Excise, when he comes across any order pa i authorily subordinate to him, if not satisfie J legality or propriety, may direct such authority I the Collector (Appeals) for the determinati(,r points arising out of the decision or order rr specified by the Collector of Central Excise ir )ard in its f Central ed by an with this r apply to of such may be his order and there is a further right of appeal to the ce lartment. The position now, therefore, is that, if any or,1 r passed by an Assistant Collector or Collector rs advl interests of the Revenue, the immediat: administrative authority has the power to have satisfactorily resolved by taking up the isr,r se to the / higher 're matter e to the Appellate Collector or the Appellate Tribunal rLr the case may be. ln the light of these amended provis ir can be no lustification for any Assistant Cc Collector refusing to follow the order of the Collector or the Appellate Tribunal, as the car;, even where he may have some reservati() correctness. He has to follow the order of t appellate authority- This may instantly car prejudice to the Revenue but lhe remedy is a hands of the same officer. He has only to matter to the notice of the Board or the Colleclc enable appropriate proceedings being tal:( Section.3s-E (1) or (2) to keep the interes department alive. lf the officer's view is the corr will no doubt be finally upheld and the Revert the duty, though after some delay which such I would entail. ns, there lector or \ppellate may be, s on its e higher ie some so in the rring the so as to n under s of the ct one, it ) will get rocedure

8. We have dealt with this aspect at sorl ) Iength, because it has been suggested by the learned , dditional 9 Solicitor General that the observations made by the High Court, have been harsh on the officers. lt is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become wldespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observatrons of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authonties to the requirements of judicial discipline and the need for givrng effect to the orders of the higher appe ate authorlties which are binding on them.

9. In the instant case also, once wheu the matter had travelled to the Appellate Authority and the Appcllatc Authority having expressed his opinion and had partly allowed the appeal, the said order could not be put to challenge or review by a subordinate officer or an inferior forum than tl.re Appe[ate Deputy Commissioner. The Assessing Oificer to whom the matter stood remanded could have only expressed his powers to the extent of the directions given by the Appetlate Deputy Commissioner that was for quantifoing of amount of entry tax paid by the petitioner on the purchase of raw material. The Assessing Officer, under no I I 10 circumstances, could ha','e travelled beyond the dilr ctions given by,the Appellate Courl

10. In vieq, of the satnc, we are of the considercc opinion that the stan<l takcn by the Assessing Olficer is not pr( 1er, legal and justifiecl. The irnptrgned order deserves to be and i; accordingll', sct aside. Therc shall be no order as to costs. I l. l'he rvrit petition is allowed. However, i'hilc setting aside thc ortle t ol thc Assessing Officcr, we direcl he .Assessirrg compliance of the APP: late DePLttY O l'flcer to c lrsil re ( ornrnissioner''s ordcr dated 06.12.2007 only r' ' f'a r as the cluantilication is cotrccrned Cionsequentll , tniscellaneous petitions pcndirr ' if auy. shall stand closcd \ That the Rule Nisi has been made absolute as stated above. Witness the HON'BLE THE CHIEF JUSTICE SRI APARESI-I KUMAR SINGH, on this Tuesday, the Twenty Fifth Day of November, Two Thousand and TwentY Five SD/- AHMEI ASSI AH KHAN GISTRAR //TRUE COPY// \ \, SECTION OFFICER To

1. The Assistant Commissioner (CT), LTU, Secunderabad I rivision' Hyderabad. 2. The Appellate Deputy Commissione(CT), Ser t nderabad Division, Hyderabad.

3. One CC to SRI KARTHIK RAIVANA PUTTAMREDDY, /\ Ivocate IOPUC] 4. Two CCs to SRI SWAROOP OORILLA, Special Gr,' ernment Pleader for State Tax, High Court for the State of Telangana at Hycr rabad. [OUT]

5. Two CD Copies FA t# / .IIGH COURT DATE D:2511112025 11 lFlE :) i , .-\ ( ,a< !' 10 EEr iffi * o 'fin;,.1.., I .{ ORDER WP.No.l4000 of 2008 ALLOWING THE VURIT PETITION W] HOUT COSTS (f ,2- )