An audit for the same period cannot be conducted without proper authorization from the Commissioner, rendering subsequent assessments invalid.

ORDER:

Suddala Chalapathi Rao, J.

The present Writ Petition has been filed to declare the assessment order dt.26.08.2008, passed by the respondent for the period 01.04.2005 to 31.12.2007, in levying sales tax of Rs.97,180/- along with penalty of Rs.97,180/- and interest of Rs.38,296/-, as illegal and arbitrary, which covers the period of 1st audit from 01.04.2025 to 31.10.2006, by the Commercial Tax officer, Balanagar Circle, Hyderabad, (for short ‘the CTO, Balanagar’).

2. The brief facts of the case are that, the petitioner is a firm dealing in trade of food-grains and pulses at Tandur and is registered dealer under the provisions of APVAT Act, 2005 (for short ‘the Act’) on the rolls of the Commercial Tax Officer, Madhapur Circle, Hyderabad and has been filing monthly VAT returns by paying sales tax due from time to time, by taking input tax credit on the eligible goods purchased within the State.

3. Pursuant to the authorization, dt.09.10.2006, issued by the Deputy Commissioner, Hyderabad Rural Division, the business premises of the petitioner-firm was audited by the CTO, Balanagar, on 08.11.2006 and upon such audit, the CTO, Balanagar, collected the differential tax of Rs.1,45,278/- on account of discrepancies in the purchases made by the petitioner-firm.

4. Further, under another authorization, dt.17.07.2007, issued by the Deputy Commissioner (CT), Hyderabad, Rural Division, Hyderabad, in VAT Form No.304, the respondent-Assessing Authority visited the business premises of the petitioner-firm on 05.01.2008 and conducted a second audit for the period from 01.04.2025 to 31.12.2007, covering the period of 1^st audit and issued notice, dt.31.05.2008 and the petitioner submitted reply on 25.06.2008, stating that the period up to 31.10.2006 was already been audited and assessed by the CTO, Balanagar and differential tax has also been collected, and therefore, conduct of audit once-again for the very same disputed period is impermissible.

5. It is contended that without considering the said objection, the respondent passed the impugned assessment order in VAT Form No.305, dt.26.08.2008, assessing the period from 01.04.2005 to 31.07.2007, and demanded additional tax, penalty and interest, and the said amounts were also collected even before service of the order.

6. Assailing the said assessment order, dt.26.08.2008, the present Writ Petition is filed.

7. We have heard Sri Tejprakash Toshniwal, learned counsel for the petitioner and Sri T.Chaitanya Kiran, learned Assistant Government Pleader representing Sri Swaroop Oorilla, learned Special Government Pleader for State Tax.

8. Learned counsel for the petitioner would submit that, since the respondent had already passed assessment order and collected the differential tax amount for period from 01.04.2005 to 31.10.2006, initiation of second audit for the very same period is per se in excess of the jurisdiction and thus the Assessment Order, dt.26.08.2008 is illegal, arbitrary and untenable, and liable to be set aside.

9. It is further contended by the learned counsel for the petitioner that the assessing authority has no authority to conduct a second audit for the disputed period, as no authorization was issued by the Commissioner of Commercial Taxes, who is the competent authority to empower an officer to undertake such audit in terms of Sections 2(4) and 3(A) read with Rule 59(2) of the VAT Rules. Further, the authorization issued by the territorial Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad does not confer jurisdiction on the Assessing Authority to proceed with assessment.

10. Learned counsel for the petitioner placed reliance on the judgment of a Coordinate Be