The High Court · 2025

SRI SWAROOP OORILLA, SPL, .GP FOR STATE TAX . The Court made the following: ORDER THE HONOT]LABLE, SRI .IUSTICE P.SAM KOSHY AND TIIE HONOTIRABLE SRI .IUSTICI| SUDDALA CHALAPATIII RAO WRIT PETITION No.927 of 2008 ORDEIt, (pu Httn bla Srr,/tt.stict ['.Stm Koshy) Mr-Karthik Rarnana Puttamreddy. lcamed otlunscl lbr thc pctitioncr and Mr.T.Chaitanya Kiran, learned Assistant (iovcmnrcnt ['lcader rcprcsenting Mr.Srvaroop Oorilla, iearned Special (ior cnrment Pleirder lbr Statc -l ax. Ibt the respondent.

2. Ihc instant Writ I'etition has bcen tiled assailing the ordcr passed Asscssing Otllcer for thc assessment ycar 1003-04- clatcd 2lt.03.2007. The assessntcut ordcr has been directly ohallengcd by' the wa! of rvrit pctition ignoring the statutory rcmedy of appcll. -l u,rit petition sas admined lbr hearing as early as on 23.01.2008 and intcrirn stay rvas also grantcd on a condition of the petitioncr depositing a surn of'Rs.20,00,000/- rvithin a period of three weeks.

3. ['hc contentiorr of lcarnerl counsel for the pctitioner is that the conditional intcrirn order was passed and the remaining part ofthe order was stayed till date. 'fhc challenge to the assessment order is tnade prirnarily on the ground that the order is one which is barred by lirnitatiorr and that the order is also one which, apparentll- is an ante datcd order that was passed by the r\ssessing Officer' Thc petitioner 2 establishrncnt is r.lrre rvhich is involved in the busin: s ol' softivare er\ports. 'fhc pctilioner dcvclops soflrvaro and thcreaftr r it is cxported throu-qh 1hc Sollsarc 'l echnologies Park ol India. 'l'lrr retitioner lulls Lrnder cxeruptir)n clrteqon Section 5 (l) ol the ('cntra ialcs I'ax Act. It)-56. Ihe nitturc ()l trusiness carried out by the pctitior :r. i.e. busincss sofiware cxport \ras onc u,hich was an excmplcd catego' . lrr duc course ol tirne. the pctitioner's trusincss sas subscquentlr aken over by arrothel cstablishnrcrrt narlclr: Conversvs Intlia S,, n.iccs Private l.irnitcd rr ith efiecr liorn I)cccmbcr. 2005 onrvards. hc responclcnt issued a shorv-causr notice dirccting the petitioner to 1 r tr,idc lnaterials to substantiatc the incontc recei,"cd fionr sofi*are t t,ckrl;mcnt and liom cxport rr()de 10 loreign countries so as to avail xemption. l'he show-causc notice is said to have bccn issued n 01.02.2007. As per thc cotrtents ol the countcr liled by the Depatt nent. thc shou, causc r.roticc s as also cffectively sr:rved upon the p: itioner. As the noticc sent carne back rvith an cndorscmcnt "addressee ,:ft". -lhe shorv- cause noticc thercalter was scrved by u,ay of afTixing or. thc ;tetitioner,s last knorvn address of rcsidonce in terrns of Rule 5tl o1' \ndhra Pradcsh Gcneral Sales 'l'ar Rules. 1957 (lor short '.the , pGST Rules). Subsequently. the assessment order itsell was passcd r the Assessing Ol'liccr raising a dcrnand of Rs. I.92,85.445/-. l'he ordc-. .eflccts the date 3 to bc 28.0i.2007. 'l hc ordcr u'as finall1' sencd upon the petitioner on

20.l2.20oT.Thcrclvasahcav.vgapinbetwccns0laraSserviceolol.der orr the peliLiorrcr-. llris accorcling to tllc pctitiollct' printa -fucie' rcllccts tltcorrlertobei.in.I/?1eda[eClortler,ltrrasalsirtheccrnlcrtticltlcl[.tlrc pctitioner that aparl liom the lact it is it:l (tttte dated ordcr' the rcspoutlcttt lras llso ttot adherecl to the rccognizcd mode of'service ol' noticc and ordcr ttndcr Rulc -5 tl oi the n P(iS f Rulcs' uhich also the pctitioncr coutctldcd that sutllcienL 1o dral'an advcrse int'erencc agatnst the rcsptttrdcnt. so llrr as thc irllptrgncd order bcinq zrrle dated order' I hc lcarned ct;ttttsel lirr thc pctrtitlncr re t'emed to paragraph Nos 6 +. and 7 ol' the cotrrlter tilcd bl the Departmctrt to highlight ccrtairl discrcpancies. so l'ar as the rlato ot ordcr, the date ol'dispatch and the date. ol sen'ice ls cotlccmcd. I-ikervise. thc petitioner's Counsel also rcferred to Rule 58 highlighting that thc mode of service chosen bl thc l)epartrncnt i.e. h1 issuancc of orclcr under certificatc of posting is one' rvhich is Irot a rccos,nized mocle ol service and thc said mode ol scrvicc ivhich has bccn deprecatcd by this lligtr Court itselL so far as thc period ol'lirnitation in thc r\ssessmcnt ordcr fbr thc year 2003-04 is concetncd rclerring to Section 14 (l) of thc Andhra Pradesh Gencral Sales'['ax Act^ 1957 (fbr short ''the APGST Act") and contended that thc assesslneut under this section shall bc rrade only within a pcriod o1'thrcc 4 ti, ,:.,,i \ ca|s li-orn drlc 0l' thc trrdcr ol thc asscjsnrcnl ,ur,hich as:c isrnent relalcs I hus. the pcnorl ol'Iiuritation io 1he instant casc tbr thc , \ ,scsslncnt ycar l0()j-0ri u oLr rl ha<l he cn pcrnrissiblc onlr up to 3 1.03.- ( (17. According i,) iilc l)eliiiolir'r'. itr.i ir sho\ iirirt the inrprruncd ()rdcr , ,t\\essnlenl is i,nc rrhich lia. hecn:rassed riiihirr thc lintitation periL'd. i i rhc assossing trllicel rr oultt Itt.t)r.t(x)J hr datc ol rrhictr the asscssr cnl order u,as pusscd. Lftrrrcr et- lltarc is rro s,.rl'rsttrrrtial coqcnt matcrii ir\ailable \\ith tlte l)cpirrtnr.rrt to :]ro\\ tlta! litc orrlcl \\as onc rrhlci ,ias passed It(.0.1 200; Pcl crrnlra. lcarnccl counscl firr thc I)epartrncnt to, k ihc Bench to the counter tllcti br thc Statc anC hightightcd rhe lact t ii irr i-act. thcre \\as a totill non-c0ope|ation liotn thc pclitiotler's sirr iDasmuch as. er crt uhcn tlrc slr,rri cirusc loticc \\a j issucd on ( 1.01.2007- the i)epartrnent tirrrnd it dilllcLrlt iu ser\ tng thc sanre. lr rsuiuch as the rcgistcred noiicc scrlt canre hack rrith an cndclrsentcnt rddressee leli" I'he [)cpartrtrent p,- rsortitl[r lriid tnudc an c'flirrl ol sr r ;inp the notice throuqh process scr\cr of tlrc l)cpartruent. but- thc pror ( is sctver lbund the pctitiontr not heing ai'ailaLrlc ot thc givcn busir r.;s addrcss and lastly. the shuu-cause noticc \\as scn,od by \\'a), o1 rffl\turc at the pctitioncr's lasi krrorrn uddrcss ol'residence. All o1' hich will shou' tirat the rc(lilircrncnt under Ilule .58 ol' thc AI'](lS'l ll r lcs ir as strictly 5 adhercd to and inspite o[ thcsc, the petitioner choose not to defend hirnsell'and not to appear hciirrc thc authorities and ncither availcd the oppoflunitl to put lorth his clel-ence or give his explanation to the contents ol- the shoN-cause notice and in the process. thc Assessing Olficer r\ as lcli u'ith rto other option, but, to pass the ordcr datctl 28.03.2007, rvhich is nell rvithin the period of lirnitation He turther ref-erred to uncler ccrtificatc olposting mode that u'as adopted by the Dcparturent in servins the Assessment order on thc pctitioner'

6. [{aving heard thc contcntions put fbnh on either side and a pcrusal of the rccord. thcrc is n0 disputc so far as the period of limitation Iilr the assesstnent to bc madc lbr a particular assessmcn[ year is three vears liotn thc pcriod of asscssment i.e. for the assessment year 2003-

04.. I he period ol limitation rvould had been up to 31 03'2007 The shorv-causc noticc issued br rtre Deparlment appcars to be one which was serll on 0 t.02.2007. At tl-ris juncture, it rvould be the relevant to take note of thc contcnts ctl- oountcr filed by the Dcpartrnent, which for rcady relerence reproduccd hercundcr: "lt is submittecl that as thc claim of exemption by the petitioner is not supported by an1' documentary evidence, it was proposed to treat ihe same as direct inter-state sales under i".iion j (a) ot' thc (lS I' Act. 1956. Accordingly, a show cause notice daled 01.02.2007 was issued. When this show cause notice was sought to bc scn'ed on the petitioner personally at the business prernis"s by thc process scrver of the dcpartment' no rcsponsibLc pctson \\as available at the petitioner's bg;iness 6 prenrises. fhcrclbrc. the sho* cause notice uas scn i r seri,ice by' I{PAl) on 11.01.2007. l'his rvas retunred br I e postal authoritics rvith an endorsemcnt "Addresscc lclt' I rercalier the shorr causa notice once agairr rr.as servcrl h\ r1 i \turL on thc petitioner ut the last knor,.n placcof resitlencc in tt .ordirrrce ryith rtLlc 58 ol rhe .\[,CS I Rrrles". 1 It $,orrld bc relcrant to rakc note of thc contclt , of ptrragraph No.7 ol- thc counter. u'hich dcals rr ith the nlodc r) ' scn icc o1' thc inrpugned order ofassessrnent upon the pctitioner. uhic r reads as under: "' It is subtrritted that despitc scrr.icc ol tlt. r,rricc in :rccordancc rvilh larr. thc pctiticlncr did not llle olrj: tions. as such tltc assessrltenI ordcr ucrc passed on ]ti (rl.l(,(r, raisinrl a demand o1'Rs.1.92.85.,115!. The- said ussc\sntcrt ( -(lcr \\as sent trr the petitioncr on 30-01.1007. undcr c,.'r'i lcatr: of posting. but thc sanrc'r\as rctumed h! the posral lllrit- )ritic.\ on 03.05.1007. as un-serr,cd. Finallv. the asscssrncni r r.dcr rvas scrved on the sistcl conccnr ol'thc success()r coll I.: t\ to the pclitioller conlpanv as a last resort on 20. ll.l00'1 hLrs. thc assessrncnt order rlas sened on the petitioucr in ,1, cordencc with mle 58 ol the APGS'I l{ules. I957 read uirh s_' tion ()(2) olthe CS'l Act. 195(r " E I'he plain reading of paragraph No.7 akrnq \\rrl )aragraph No.6 ol' the counter whioh again reft:rs to thc servicc _-' thc ordcr. ol- assessmcnt undcr certiflcate of posting rvould go to horv that thcrc appears to bc sonte discrcpancics. so lar as thc date ol':: spatch oforder \\as made to the petitioner arc concenrcd. l.crr in-c asidc the disorepancics, so far as thc date of dispatch lbr a morrc I . we proceod to dccidc whether the rnode adopted by the I)epartrnerrr lirr sending the ortler o1'assesstnent under certificate ol'positine be a - cognized rnode 7 of servicc or not. [t would be relcvant to takc note of Rule 58-A ol the n t'(isl' llules, u hrch lilr ready rcllrcucc rcproduced hcreunder Section 58: lhe scn'icc on a dcaler of any notice surnfflous. ordcr or procccdings untler the Act or under tlrese rules rnay' be el'l'ectcd in an1' ol'thc lbllowing ways' nanrcly. a) by giving or tcnticring it to such dealer or his manager or agellt; or b) c) leaving ifsuclrdealertrrhisntattrgcrt,ragctrtisnotfoundby it at his last knoun place ol'business or residcnce or b1 giving or tcndcring it to adult tttenlbcr of ltis lamill- : or if rhc addrcss ol- sLtclt dealcr is knorvn to the asscssinS authority. b1 sendilg it to hinr bl rcgistered post: or (and if it is rctumed urservetl. il shall bc put on rroticc board of thc office of lhc asscssirlg autl]()rlt) or the notice board in the oftrcc of the local ( ltatnbcl of Cotnmeroe or Traders Association. ald it shall be deemed that the said notice or sunrmons or procccdints arc sc'rvcd on tlte dealer and action shall be taken itr pttrsuatrce thcreof accordingly ) d) if any or all ol' the modes albresaid is not practicablc, by aflixing it in sorrtc conspicuous placc at his last knorvn place of busincss or rcsidcncc "

9.' A plain reading ofthc aloresaitl provision by itscllrvould reflcct that thc service ol- notice b)'certillcate of posling is not one \\'hich is accepted in thc statute u'ay of recognizod mode of service lt would also be relevant at this juncturc to ref-cr to the decision of the Diviiion Bench oi this I Iigh Court in Sri Lakshmi Vcnkateswara Industries v' Commcrcial Tax Officer, Vanasthalipuram Circle, Hyderabadl' t lzotrl +s vsr 349:2011 SCC OnLine AP 1081 8 uhercin. in para No.8 ol- the judgrnent. this Cou( hir: 'el'cmed to the sclr icc ol'nolice b1' uav ol"'cer1ificatc ol'posting" helti r Lrrrdcr "ll.-.....Judicial rroticc can l)e lakeu ol' tl,t' litil lltat aLrthorities teson 10 llle "ccrtillcatc ol postirrg" roLrte Ii'r cn rce r,l' nolices onll,to voicl producing proofol serrice. Ihat tlrr. rethtxl Lrl s!'rvicc r\ caPahle ol abusc is uot in dr5putc. "Ccnrlicat. , po'linu." is no[ or)c ofthc prescribed modes ofservicc oInoticcs rrr r :r rrrle 64 of the Andhra Pradcsh Valuc Addcd Tax Rulcs. Thc bona t les ol'thc first rcspouderrt, in irritialll contcnding that thc sho\!-c I lc n()ticc rvas scrrt bv IiPAD and then taking a "U" tum to srrl r it. ir, thc additiorral cou n ter-a ffldav it. that thc sho!\.cause otrcc \! j scnl b) ccrtificitlc olposting- is suspect. \\/e arc- prinra lacic. oftlr rrcu thar tlrc scrcral contradictions. in the counter-affldar it r . a ri: thc atldiliortal.counter-aflldavit flled bv tlre lirsl respt'ldell ellcci hcr clclear our to urslead this court. and to ar oid being proce,. r -'d aqainst firr pcrjrrrr. Wc had thercfore, br ordcr dated JlrrLrarr 15.:()ll. directed lppearance oIthe flrst rcspondcnt. and for prt,tiri iol ol-tlrc llle relrrlinq k) the cancellation n1dg1. [{pu,gvgr thc reler r t rcci)rd\- iucludinrr the despatch register. \\cre not produced '

10. Frorn thc atirrcsaid jurisdictional pronounccutcrr itscli it \\ould apparcntly evident that the servicc of notice by relcrt.t i rg lo certificatc ol-posting br the I)epaflrnent is not onc. which is accrltablc nor it has beerr considercd as recognizod rather the tligh Clotrr has dcprecatcd such a practicc bcing adopted. lrr the tecth ol' sairl [inding h1, thc Division Ilench o1- this lligh Court and in tlrc abscnc: o1' rnaterials to sh()\\ that eflilrts lrave been rnade by thc I)epartnrcrr in scn,inq thc irriprrgrrrld ordcr dated 28.03.2007 prilnari[] and if not .r thin reasoltablc period ol time. strong inference has to be draw,n agaill: l thc I)epartment in vierving the impugned order to be the one which i, an arle dated order. 'l hc Hon'ble Supreme Court in the case of ii ate of An(lhr:l 9 Pradesh v. M.Ramakishtaiah & Co-'? dealinq with the aspect of inordinatc delay on thc part ot'the Dcpartmenl in serving the order upon thc assessee has hcld as utrder " We arc of the opinion that the theor)' evolved by thc High Courr may'not be rcally callcd tbr in the circumstances of the case. We are of the opinion that this appeal has to be dismissed on tllc groultd urgcd b1' the assessec himself As stated abovc. thc order of thc Dcputy Cotnmissioner rs said to have bcen madc on Januarl (r. 1973. but it uas servcd upon thc asscssce on Novcntber. 21,1971. i.e., prcciscly l0 )t months later. fhcre is no erplartation lrorn the l)eputl' (iomnlissioner whf it rvas so dcla.vcd. lf there had been a proper erplanation' it ,vould have been a drllercnt lllattcr- Illtt. in the ahscncc of an1 cxplanation statsocvcr' \\c mLISt presume that the order ru", nni ,od" on thc datc it purports to have been made lt could havc becu made after the erpirv ol'thc prcscribcd tbur lears period. lhc ciril appeal is accordingll dismissed No costs. ll.AnotherrcasonwhatfbrcesthisBenchtodrawint'erenceagainst thc Departmcnt is thc e|brt at the first instance made by the Department in scrving the shorv-cause notice upon the petitionerlassessee Para No.6 of the counter n'hich has alrcady bccn rcproduccd gives a clear indication of all the o fIorts rnade by thcm, all of ivhich \\'as as envisaged under Rulc 58 oi the APGS'I Rules which again reproduced above' Howcvcr. rvhen it comcs to serving of the asscssment ordcr upon the petitioncr is concerncd, nonc of the rnodc which they had adopted in the course of scrving thc shos-cause notioc u'as adoptcd' rather they took ' (rsga)g: src aoo:1994 scc onLine sc 3 :j ,: 10 altogethcr a dil-lcrcnt rnodr: rvhich is totall) aiicn to thc i) ocedure that ts prcscrihed undcr llule -ill. I his action as has bcen :r- tsesrcd earlicr cornpcls thc Ilr-nch to drarv an adver.sc inlcrencc ()r'l lc order cllrted 2l{.03.1007 heirrs razlr,datcd ordor lor thc sinrple rcasor hat rhc scn icc ol notice adrrrrttetllv has been lnade in the asscssulcnt r i ,cd 10. 12.2007 but thc said rnotlc *as not adopted bv the Dcpartnr nt at the tlrst instance ol'sen ing noticc upon the petitioner and at tlr: sarne Limc. tlrc tnotlc that sas zrdoptcd fbr serving the shrlrr-causc otice uas rrot atlopted tbr scrr iltg Lhc impugned assesslncnt orde r uporr lrc pctitionel

11. I-carncd counscl lbr rhc Statc had also take I a p[clinrinar.r obiection o1' pclitioncr having the rernedl, ol' apl.( ll agaiust tl)c irrrpugrred tirdcr [re litrc the appollatc authorit\.. il. ,\s iras lrcclr discusscd in thc initia] par.agraph: r'tlris ortler_ the asscssnrcnt urdcr is one ,,vhiclr is dated 28.03.20(\1 ar I thc urder uas servod upon thc pctitioncr adrnittcdly in Decernber. l()( ' . \.\'rit pctitiorr *us inr.rcdiatclr lilcd befitrc the Iligh Court and in:tc r i ol thcre hcins an iiltematir,e stiltutor\ rcrnedy ol appeal, the IIigh ( ,, rt adnlitte(l thc petition on Ii 01.2008 itself. As such, thero was no 11 r ch tinrc lost br the pctitioner in availing thc writ remedy and which rva.; acccplcd bv the High C'ourt antl also _eranted interim protection. Nov. r Itcr l7 rcars ol' rrrit petitiorr bcrnq pending betbre this Court. rve are ot he llrrn r,ierv lt '17 rhis.iuncturc, thc objection ol- thc learned Assistant (lovcmlnent l'lcader I of rolcgating thc petitioner ro avail thc statutor)' remcdl' of appcal *'ould not bc propcr. legal and .justitiable and thercfore, thc said objection stands cli,erru[erl

1.1. With the alorcsaid facts and circurrstanccs of the casc and iurisdictional precedents nanatcd abovc, rre are inclined to allorr thc writ pctition in holding that thc ordcr ol'asscssrncnt is bad in Iari and is onc s,hich is otherl isc barrcd br lirniration

15. 't'he Writ Petition stands allorred. No costs Conscqucntly. rniscellancous petitions pending. if'an1 . shall stand closcd That Rule Nisi has been made absolute as above Witness THE HON,BLETHE CHTEF JUSTTCE APARESH KUMAR STNGH TUESDAY,THE TWENTY FIFTH DAY OF NOVEMBER TWO THOUSAND AND TWENTY FIVE SD/.K. MADHAVI ASSISTANT REGISTRAR //TRUE COPY// S TION OFFICER To, '1 . The Commercial Tax Officer, Somajiguda Circle, Hyderabad ? 9n" cc to SRt S. DWARAKANnirii, AJrocji6'icjpucL - 3 Two CCs to SpEC|AL Gp FOR Srnrr iei ,r_r-iji'Corft for the Stare of 4. Two CD Copies Telangana. [OUT] BM BS SF, HIGH COURT DATED:2511112025 ORDER WP.No.927 of 2008 t{E S q q 0 * * ALLOWING THE WRIT PETITION WII'{OUT COSTS @ 1> ? o^' ,>L