Smithkline Beecham Consumer Healthcare Ltd. vs Assistant Commissioner (CT) (Int.) and Others

P. Venkatarama Reddi, J.—Heard both the counsel at the stage of admission.

The petitioner questions the provisional assessment order dated June 26, 1999 passed by the first respondent. The said order relates to the period August 1, 1996 to March 31, 1997. The petitioner objects to the levy of tax u/s 5-A of the Andhra Pradesh General Sales Tax Act, 1957 on the purchase turnover of milk which was subjected to tax u/s 6-A in the hands of the petitioner. It is the contention of the petitioner that the additional tax u/s 5-A cannot be levied if the goods have suffered tax under the substantive charging provisions of the Act. It is also the contention of the petitioner that the impugned assessment has been made long after the assessment year had expired quite contrary to the order of the appellate authority in respect of a part of the same period. Normally the petitioner would have been relegated to the alternative remedy available to it under the Act. But, the peculiar circumstances of this case call for interference under Article 226.

A similar provisional assessment order was made earlier by the first respondent for the period April 1, 1996 to November 30, 1996. The same was questioned before the Appellate Deputy Commissioner, Kakinada. One of the items of dispute was regarding the levy of additional tax u/s 5-A on the turnover of about Rs. 3.59 crores. The appellate authority by his order dated March 19, 1998 granted relief in so far as this item of dispute is concerned. He held that, "as long as the purchase of milk is liable to tax at the last purchase, the turnover tax will not be applicable". The appeal was thus partly allowed. It is strange that the first respondent resorted to provisional assessment fastening the liability of tax u/s 5-A despite the appellate authority''s orders covering a part of the period (i.e., the period of seven months). It amounts to flagrant violation of the order of the appellate authority by which he is bound under the scheme of the Act. This is a typical example of arbitrary exercise of power by a quasi-judicial authority. Whatever may be said about the period not covered by the appellate order, there is absolutely no justification in making an assessment for the very same period over again so as to visit the petitioner with the liability to pay additional tax.

As the provisional assessment has been made for the entire year part of which is covered by the appellate authority''s order, it cannot be split up. We cannot direct the petitioner to file an appeal against that part of the assessment order which was not the subject-matter of appeal before the appellate authority. We are, therefore, constrained to set aside the provisional assessment order in its entirety. That apart, the year of assessment was over long back. There is absolutely no reason why final assessment should not be made instead of resorting to provisional assessment after a lapse of more than two years from the expiry of the assessment year. Now that we have set aside the provisional assessment order, it would be proper and appropriate to direct final assessment itself to be made according to law after giving reasonable opportunity to the petitioner.

The writ petition is allowed accordingly.