APHC010160882006 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI [3529]

(Special Original Jurisdiction)

MONDAY, THE SECOND DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 26353/2006 Between:

1. S RI CHAKKA SRI RAMACHANDRA MURTHY, VIJAYAWADA., S/O.

LATE CHAKKA SESHAGIRI RAO H.NO. 76-9-5, RAJESHWAR RAO STREET, BHAVANIPURAM, VIJAYAWADA-520012.

...PETITIONER AND

1. T HE COMMERCIAL TAX OFFICER KRISHNA DIST ANOTHER, VIJAYAWADA, KRISHNA DISTRICT.

2. T HE DEPUTY COMMERCIAL TAX OFFICER, SAMARANGAM CHOWDK, VIJAYAWADA-520001 KRISHNA DISTRICT.

...RESPONDENT(S):

Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto issue an appropriate writ order or direction more particularly one in the nature of writ of Mandamus declaring the action of the respondents in attempting to recover the alleged arrears of sales tax pertaining to the defaulter company from out of the petitioner's properties by the impugned distained order in Form No. 1 dt. 10-8-2006 the provisions of Revenue Recovery Act as illegal, arbitrary High handed without authority of law and jurisdiction and set aside the same and declare that the respondents can not take any steps for recovery of alleged arrears of sales tax pertaining to the company where the petitioner is a Director from the properties of the petitioner and pass such other order or orders as this Hon'ble Court may deem fit and proper in the circumstances of the case.

IA NO: 1 OF 2006(WPMP 33863 OF 2006 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings in pursuance to the distained order issued by the 2nd Respondent in Form No. I dt. 10-8-2006 pending disposal of the writ petition and pass such other order or orders as the Hon'ble Court may deem fit and proper in the circumstances of the case.

Counsel for the Petitioner:

1. BHASKAR REDDY VEMIREDDY Counsel for the Respondent(S):

1. GP FOR COMMERCIAL TAX The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao)

The petitioner was a Director of a private limited company named M/s.

Padmalaya Wire Products Private Limited Company (herein referred to as the Company).

2. The Company was registered as an assessee, on the rolls of the 1^st respondent. The assessment of the company, for the year 1995-1996, under the A.P.G.S.T. Act, had been initiated. The 1^st respondent surprisingly issued notice, dated 23.03.1999, proposing levy of tax of Rs.2,74,412/-. There was no response to the various notices issued to the Company, notices were sent to the Directors of the Company also. As there was no response, the 1^st respondent passed a best judgment order, on 31.03.1999, confirming the demand of Rs.2,74,412/-.

3. As no tax was paid by the Company, the 1^st respondent issued notice, dated 06.07.2006, to the three Directors of the Company, calling upon them to pay arrears of tax within seven (07) days from the date of receipt of the notice. As there was no response to this notice also, the 1^st respondent had issued a distraint order, in Form – I, dated 10.08.2006, under the provisions of Section 8 of the Andhra Pradesh Revenue Recovery Act II, 1864, for recovery of arrears of tax, amounting to Rs.2,72,397/-, for the year 1995-1996, which had become due as on 31.03.1999.

4. The petitioner has approached this Court, by way of the present Writ Petition, challenging the said distraint order.

5. It is the case of the petitioner that the Director of a Company, would not be liable to pay tax dues of the Company, arising out of the A.P.G.S.T. Act, unless the provisions of Section 16B are applicable. It is also the case of the petitioner that, the provision of Section 16B would permit recovery of taxes from the Directors of a private li