Pratibha Packagings vs Commercial Tax Officer, Tarnaka Circle, Secunderabad

S. Parvatha Rao, J.—Heard the learned counsel for the petitioner as well as the learned Special Government Pleader for Taxes. Both the learned counsel agreed that the writ petition itself may be disposed of.

The petitioner questions the notices dated April 22, 1995 issued by the respondent in respect of the assessment years 1992-93 to 1994-95 as illegal, arbitrary and unenforceable. On behalf of the petitioner-firm it is stated that the petitioner-firm had set up a small-scale industry and claimed tax holiday under G.O. Ms. No. 498 dated October 16, 1989. It was granted final eligibility certificate on March 2, 1995 valid from June 27, 1992, the date on which the petitioner commenced commercial production. However, for one reason or the other the petitioner in fact collected sales tax during the years 1992-93, 1993-94 and 1994-95 up to January 24, 1995.

It is not in dispute that the amount so collected is as follows :

"1992-93 ... Rs. 31,795 1993-94 ... Rs. 55,841 1994-95 ... Rs. 1,10,932 (up to 24-1-1995) ------------- Total ... Rs. 1,98,586" -------------

The impugned demand notices are in respect of the said sales tax collected.

The learned counsel for the petitioner contends that in view of the eligibility certificate issued to the petitioner valid from June 27, 1992, the sales tax collected cannot be required to be paid by the petitioner. But, the eligibility itself is subject to the condition that any sales tax collected shall be paid to the Government. It has been decided by a Division Bench of this Court in Sri Parvati Parameswara Cables Vs. Government of Andhra Pradesh and Others, that small-scale industries which are eligible for tax-holiday cannot collect sales tax because a total exemption from payment of sales tax has been granted in respect of the goods dealt with by them unlike in the case of medium scale and large scale industries, which are granted the facility of deferred payment of tax.

In the circumstances, therefore, the contention raised by the petitioner in this writ petition has no merit. The learned counsel points out that under the impugned notice only three days time was granted from the date of receipt of the notices for payment of the amount demanded. We are of the view that the time granted is unreasonable and to that extent the notices are bad. The petitioner shall be given four weeks time from today for payment of the amount demanded.

Subject to the above the writ petition is dismissed. It will be open to the authorities concerned to initiate proceedings for recovery of the amounts demanded together with interest thereon if the petitioner fails to pay the amount within the four weeks time allowed, i.e., up to January 18, 1996.

Writ petition dismissed.