M/s. Andhra Pradesh Road Transport Corporation' Bus Bhavan' Vamshee Estates' v. Profession Tax Officer-|, Karimnagar'

..,..RESPONOENTS Petition Under Article 226 of the Constitution of lndia praying that in the circumstancesStatedintheaffidavitfiledtherewith,theHighCourtmaybe pleasedtoissueaWritorOrderordirectionparticularlyoneinthenatureofWrit ofCertiorariaftercallingfortherecordsandquashtheimpugnedorderof Assessmentdated10.04-2008passedbythefirstrespondentinEnrolmentNo. KRM/APPT/OO1/023 levying tax amounting to Rs' 8'13'000/- under the Andhra PradeshTaxonProfessions,Trades'CallingsandEmploymentAct''1987'as without jurisdiction. |.A.NO:1 OF 2008(w PMP. NO: 15573 0F 2008) Petition under section 151 cpc praying that in the circumstances stated rn the affidavit fired in support of the petition, the High court may be preased to pending disposal of then writ petition grant stay of collection of professin Tax of Rs. 8,13,0001 arising in pursuance of the.ordeir of Assessment crated .r0-04_200g passed by the first respondent in Enrolment No. KRM/Apprtoo1lo23 under the Andhra Pradesh rax on professions, Trades, calings and Emproyment Act 1gg7. Counsel for the Petitioner : SRt S.KRISHNA MURTHY Counsel for the Respondents : Gp FOR COMMERCIAL TAX The Court made the following ORDER THE HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SMT. JUSTICE P. SREE SUDHA WRIT PETITION NO.12082 OF 2OO8 ORDER lPer Hon'ble Sri Juslice T. Vinod Kumar) This Writ Petition is filed for issuance of u'rit of certiorari t.o call for the records and quash the impugncd order o[ iisse ssment dated 10.04.2008 passed by thc lst respondent irr Enrolment No.KRM/APPT lOOl lO23 levying tax on Lhe petitioner under the provisions of Andhra Pradcsh Tax on Prolcssions, 'I'rades, Callings and Employment AcL, 1987 as u'iLhout jtrrisdiction.

2. l{card learned Counsel for the pctitioncr and learncd Special Standing Counsel appearing for respondenLs

3. Thc case of the petitioner, in brief, is that it is a public Corporalion created under the Road Transport Act, L95O (for shorl 'the ActJ to provide elficient and cconomi(' Iritl l sp()rL scn-iccs to public at large; that its Head office is localed trt Musheerabad, Hyderabad; and that it had obtained registration undcr lhe provisions of the Act and has been deducting aud pa-r'ing profession tax to the concerned l'rofcssional 'I'ax Ofliccrs irr respect.of its emplolnees working under the conccrned Depots 2

4. It is t he furrthcr case of the petitioner that Lhc I st respondcnt bv issuing thc impugned proceeding had called uporl one ol its Depot Manager i.e., Sirisilla Depot [o pav profession rerx on the basis of number of buses belonging to the said Dcpot lor the pcriod 19BB-1989 to 1995-1996 at the rate of Rs.25Ol - pr:r bus and from 1996-1997 to 2OO7 -2OOB at thc ratc of Rs.750/- pcr bus in all amounting to Rs.8,13,000/-.

5. Petitioncr contends that insofar as the aforesaid order of assessmcnl passed bt the 1"t respondent is concerned, the same is barrcd bv limitation for the period 1988-1989 to 2003- 2004, sincc, :rs per Seclion 9 of the Act, the limitaLion prescribcd tbl assessing lax which has escaped assessment is r-'urrs l'rolr thc expiry of the year to which tax relates onll- lour -r to. Sincc. thc 1., respondent had issued the impugned proceedinq on 1O.0.1.2008 for the period 1988-1989 to 2OO7 - 2OO8. thc sirmc is barrccl bv limitation.

6. [t is also contended on behalf of the petitioner that the lst respondcnl has levied tax on the basis of number of buscs rcgistcrccl in thc name of the Depot while no such prescription cxists irr Lhc: I Schcdulc to the Act. 3

7. It is also contended that since, the petitioner Head Ofltce at Vl r rsl.rccrabud, Hyderabad is registerccl under the provisions of the Act, cach of the Depot need not be registered and the Depot Manager u'ho is overseeing the operations of the said Depot cannot be considered 'as holder of permit'for being subjected to r.:.rr. It is contended that in respect of buses of thc petil-ioner arc conccrned, the same are owned by the Corporation and as such it is only the Corporation at its Head office would be liable to [)i]\' lax and not each of the DePot. 8- Petitioner further contends that the l"t respondenl- u'ithout considering that the petitioner is a Corporation registered under rhc Companics Act, had erroneously compared the petitioner rr it h a private Transport Company for being subjccte r1 to 1;rolbssion Tax.

9. Per contra, learned Special Standing Counsel appcaring on trch:r[[ oi the respondents supports the order. IO. We lrave taken note of the respective contentions urged. I 1. Irirstly, it is to be noted that the petitioner being a Oorporation forrned by the State Government though registered .rs separate entity, such registration would have to be 4 considered as rl registration under Section g of the Companies Act, 1956

12. Furthcr, Ilrc pctitionr:r bcir.rg a registcred dealer under the provisions ol thc ApClS.t.Act at the rclevant time and thereafter under the ,Ap VAT Acl rr.oi-rld have to be considered as liable to pay profession l:rx un.lcr t-ntry 8 of I Schcdule to the Act. In the alternalivc, il thc pctitioncr docs not have any registration under the APGS'| AcL/VAT Act, it would be covered by Entry 20 of the 1st Schedr-rle to thc Act. In either of the cases the profession Ta-'r pa-vablc is in a sum of Rs.2,5O0/_ per annum. 13' Though on bcharf o[ thr: petitioncr, it is contended that its Head Oflfice at Mushceral;ad, I.lydcrabad being registered under the provisioirs ol 1>rolcssi,rr tijx th(,r(, is no requirement to pay profession tax irt rcspcct ol cach of the Depot, the said issue is no longer res integra, in vics- of the decision of the Apex Court in Karnataka Bank Limited u. Stqte o;f And.hra prad.eshr wherein thc Apcx Cour[ l.rad trclcl that the dehnition of the word 'person'in thc Act and also Dxplanation I of the lst Schedule of the Ac[ is not intr:nrlcd Lo tax a person at a rate higher than Rs 2,5oo/- per ar1.urn, per person, buL to treat even a branch ' (2008) 2 SCC 2-rr 5 or othcr corporate body, any society, club or associatlon as a scparatc pcrson ancl therefore a separate assessee within the mt::rning ol Scction 2(b) of the Act'

14. tn the light of the decision of the Apex Court in Karnotaka BoLnk Ltd. (supra) each branch would have to be treated as a scparaLc pcrson- 'lhus, the contention advanced on behalf of its Head Oflrce at Mushee rabad, the petitioner that since, Ill.derabad having paid profession tax under tJle Act' there is no requiremcnt to obtain registration/enrolment for each of its Dcpot and Lo pay tax undcr the Act cannot be accepted as valid claim for it. to be sustained' Thus, the contention of the pctitioner on this ground is liable to be rejected' I o. Insot-ar as thc [cv1r 61 profession tax by the impugncd proc<:cding u'hereunder the l"t respondent had claimed oi pctilioner bcing liablc to pay tax under the Act for the period l98it 1989 ro 2OO7-2OO8 is concerned, it would be useful to rcle r to Scction 9 oi the Act which deals with assessment of escapcd or under assessed tax which reads as under: -9. tl tbr an]. rcason an-v tax payable under this Act' has under assessed or or has been cscaped assessmenI rate at which it is rate than the asscssccl at a lo$'er asscssable, the assessing authority may at any time within four r.cars lrom the expiry of the year to which the t i 6 rclates, pl-occed 1rl asscss or reassccs the ta_\, as the case rna-v bc, to thc bcst ofitsludgment aftcr issuing a llotice to lhe asscssec conr:crncd atrcl altcr making such cnquislr 25 11 ronsirlors ncacss;r r \ Provided that thc ta\ shall be chargcd at the rate at which it uould have ltcen chargecl if such tax had not escaped assessment or, as thc case rna-\j bc, had not been under assesscd or asscssc(l al thc 1n1c lo\\,cr than the rate at q,hich rt rvas assr:ssable .,. 16 A reading of thc section \i,ould crearly show that the limitation prescribed under the Act lor causing assessment of escaped or under assesscd ta_x is four years from the expiry of the year to which the Lax relates. Since, by the impugned proceeding the lst rcspondent secks to lerf/ and collect tax for the period 1988_1989 Lo 2OO7_2OOa on the ground that the petitioner,s depot at Sirisill:r h:rtl failr:cl ro pa-\. rax, the same would mean the 1.r resporrdcnL :ruthoritv sceking to assess the petitioner in respecL of escapecl tax.

17. Since, the 1"t rcspondcnt authorit.v is sceking to assess the petitioner in respect of escapecl tax. thc limitation as prescribed under Section 9 of thc Acr rvould sLand attracted and the authority cannot lcvy tax br:_rond a pcrioci ol lour years from the expiry of thc year to u.lrich tax rclatcs. As the impugned proceeding is dated lO.O4.2OOg, tltc lour ,r.ear pcriod can onlv be 7 from the pcriod 20O4 20O5 ro 2OO7 -2OOa and cannot go beyond the said period of four vcars Thus' the impugned demand for the period 1988 19Sq to 2OO3 2O04 is clearly barred by limitation prcscribed under thc Act and thus' the same cannot be sustained.

18. Further, Lhe lst rcspondent by the impugned assessment secks to levy profession tax on the petitioner's depot at Sircilla as per the informaLion available in Form II application on the perusal o[ lhc I"t basisofnumbcrofbuscshetdbythesaidDepotHowever'a Schcdule [o the Act, nowhere prescribes thc bersis o[ per bus rate. Though the 1"t payment of lax ou respondent in the impugncd order had referred to the provisions oftheActar'r<lthcRulcs,insofarasthelevyoftaxisconcerned, such levY can oulv bc madc at the rates as prescribed in the Schedulc.Itrersmuchrrsthescheduledoesnotprescribeany rate on pcr bus basis, lhis Courl- is unable to discern the basis adopted by the l" rcspondent authority in arriving at the amounLoIta-xduclrornthcpetitionerwhileissuingthe impugncd Proccecling lg.Further,itisalsotobenotedthatinrespectofbuses owned b5, thc petitioner is concerned, permit of such buses is 8 taken in the name of the Corporatio. and thus, it is the pctitioner Corporation which u,oulcl havc Lo bc trcatcd as 'person'and not Depot Managcr_, ntcrcl-r, bccausc ccrtain buses are allotted to the said Depot. Though iL is co,tended that in terms of G.O.Ms. No.801 Revcr.ruc (CT.It) Dcparrmcnt datcrl 18.O7.2OO3, the Transport Commissioner, A.p. bcing appointed as collecting agent for th<: purpose .[ pr.fcssr.r.r tax, it is to bc noted that since such appointmc.t is in rcspect of vehicles that are being brought for rcgistr.ation urrder tlrc provrsions of Motor Vehicles Act by the .l.ransport contractors, the same in the consiclered vierr of this Court, cannot be made applicable in rcspccr oi thc vehicles belonging to the petitioner Corporation companics anci transport

20. In view of the ab.ve, thc imp.grt.cl asscssnt.nt ordcr for the period 1988-19g9 ro 2O0il_2O0.1 is scr asicle as barred by time. Insofar as the impugned orclcr secking to le\n. tax on the basis of tax per bus is concernccr, inasrnuch as trre i "t Schedule to the Act does not prescribe such ratc and also the G.O. Ms. No. 801 Revenue (CT.III) Deperrrnrenr dated 1g.07.2OO3 being not applicable to the pe titioner as norcd above, Lhis Court is of the view that the impugned [cw. cannot bc sustainccl. 9

27. I{owever, it is to be noted thar in vieq, of the lav/ laid down by the Apex Court in Karnatakq. Bank Ltd. (supra) each of the petitioner depot would havc t-o be considered as a separate person requiring to pay profession tax at the rate of Rs.2,5OO/- per annum.

22. ln the light of the abovc observations, the impugned order dated 10.04.2008 is sct aside. Consequently, the Writ Petition is allowed. No costs. As a sequel, miscellane ous pctitions pending if any shall stand closed. //TRUE COPY// SD/. K. AMMAJI DEPUW REGISTRAR SECTION OFFICER 1 The Profession Tax Off icer- l, Karimnagar yderabad Z. tre Profession Tax Officer, Musheerabad Circl 3. The Profession Tax Officer, Taranaka Circle' Secunderabad. 4. The Commissioner of Commercial Taxes, Andhra Pradesh, HYderabad. ihe Principal Secretary. Revenue DePartment, Government of Andhra 5. Pradesh, Secretari at, Hydera bad 6. Two CCs to GP FO R COMMERC IAL TAX, High Court tor the State of 7. One CC to SRI B. Two CD CoPies S.KR ISHNA MU RTHY, Advocate [OPUC] Telanga na at Hyderabad. [OUTI I 1 To SA GJP HIGH COURT DATED:3010412025 ORDER WP.No.12082 of 2008 ALLOWING THE W.P WITHOUT COSTS. t IlE S.rrq lq c z C) o=' : '-) 22 \ ',, \-\- -\: L 2c2{-