1 RRR, J & JS, J W.P.Nos.17027 & 17082 of 2020 APHC010258292020 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3541] WEDNESDAY,THE THIRTIETH DAY OF JULY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SMT JUSTICE SUMATHI JAGADAM WRIT PETITION Nos: 17027 of 2020 & 17082 of 2020 W.P.No.17027 of 2020 Between: M/s Sapthagiri Restaurant ...PETITIONER AND State Of Andhra Pradesh and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. M V J K KUMAR Counsel for the Respondent(S): 1. GP FOR COMMERCIAL TAX WRIT PETITION NO: 17082/2020 Between: M/s. Sapthagiri Restaurant, ...PETITIONER AND State Of Andhra Pradesh and Others ...RESPONDENT(S) Counsel for the Petitioner: 2 RRR, J & JS, J W.P.Nos.17027 & 17082 of 2020 1. M V J K KUMAR Counsel for the Respondent(S): 1. GP FOR COMMERCIAL TAX 2. S A V SAI KUMAR The Court made the following common order: (per Hon’ble Sri Justice R. Raghunandan Rao) As the penalty order is consequential to the order of assessment and since both the Writ petitions raised similar contentions, they are being disposed of by way of this common order. 2. The petitioner is running a hotel and restaurant in Tirumala. The 2nd respondent after obtaining authorization from the 3rd respondent for conduct of an audit, on 20.03.2017, had inspected the premises of the petitioner on 20.03.2017 and ascertained the daily sales made on that date. Subsequently, the 2nd respondent again conducted a second test check on 16.04.2017 and ascertained the sales made on 16.04.2017. On the basis of this check report of the 2nd respondent, dated 20.03.2017, the 3rd respondent, had issued a show cause notice on 24.03.2018 to the petitioner. 3. The petitioner, on 01.05.2018, initially sought time for filing her complete response, while filing a partial response on that day. The 2nd respondent had, there upon, passed the impugned order of assessment, dated 05.06.2018, against the petitioner. 3 RRR, J & JS, J W.P.Nos.17027 & 17082 of 2020 4. In the impugned order, the 2nd respondent set out the daily sales of 20.03.2017 and 16.04.2017 as per his estimation, and arrived at a monthly turnover of the petitioner. The 2nd respondent, after comparing this turnover with the turnover declared by the petitioner, had come to the conclusion that there was suppression of turnover and consequent evasion of tax liability. On this basis, the 2nd respondent raised a demand of Rs.42,13,806/- against the petitioner for the period from April, 2016 to April, 2017. Apart from this, the 2nd respondent also initiated penalty proceedings, and passed an order of penalty, dated 06.05.2020, demanding penalty amount of Rs.42,13,806/-. Aggrieved by these orders, the petitioner has approached this Court, by way of the present Writ Petitions. 5. Heard Sri M.V.J.K Kumar, learned counsel appearing for the petitioner and the learned Assistant Government Pleader for Commercial Taxes, appearing for the respondents. 6. The primary contention of the petitioner, as enunciated by Sri M.V.J.K. Kumar is that the impugned order of assessment specifically records that the petitioner, at the time of inspection on 20.03.2017, had produced all the details of sales and details of purchases made for the period from 01.07.2016 to 31.03.2017. However, the 2ndrespondent in the later part of the order recorded that the petitioner had not produced the purchase invoices, sale invoices in support of the sales details and purchase details for the tax period from April, 2016 to April, 2017. The learned counsel would contend that 4 RRR, J & JS, J W.P.Nos.17027 & 17082 of 2020 it is on the basis of this alleged non-filing of sales and purchase bills, that the 2nd respondent undertook a best judgment assessment and passed the assessment order, which is impugned in these writ petitions. It is contended that the 2nd respondent having recorded the fact that the petitioner had already supplied all the details, could not have passed the assessment order without considering the said details and also without considering the partial response filed on 01.05.2018. 7. The learned Assistant Government Pleader, would submit that the 2nd respondent having made an assessment, on the basis of the expenditure incurred by the petitioner and the rents being paid by the petitioner, was not required to rely upon the sales details or the purchase details produced by the petitioner and the said order cannot be faulted. 8. Though the contention of the learned Assistant Government Pleader has some merit, the fact remains that the impugned order of assessment was passed on the ground that the petitioner had not produced any material sought under the notices, issued by the 2nd respondent. When such fact is belied by the statement in the assessment order itself, it would only be appropriate to set aside the order of assessment and remand the matter back to the 2nd respondent or to the Territorial Assessing Officer, as the 3rd respondent may determine, to make a fresh assessment after considering all the documents and details produced by the petitioner. 5 RRR, J & JS, J W.P.Nos.17027 & 17082 of 2020 9. As the order of assessment itself would have to be set aside, the consequential order of penalty would also not survive. 10. In the circumstances, both the Writ Petitions are disposed of with the following directions: 1. The impugned orders of assessment and penalty dated 05.06.2018 and 06.05.2020 are set aside and the matters are remanded back to the 2ndrespondent or to the Territorial Assessing Officer, subject to a decision being made by the 3rd respondent in this regard. 2. Needless to say, an opportunity for personal hearing shall also be given to the petitioner. 3. The said Assessing Officer, nominated by the 3rdrespondent, shall undertake a fresh exercise of assessment and penalty, if necessary. For this purpose, the Assessing Officer shall consider the material placed by the petitioner before passing any order. 4. The period from the date of the impugned orders to the date of receipt of this order shall be excluded for the purpose of limitation. There shall be no order as to costs. As a sequel, miscellaneous applications, if any, shall stand closed. _______________________ R RAGHUNANDAN RAO, J ____________________ SUMATHI JAGADAM, J RJS 6 RRR, J & JS, J W.P.Nos.17027 & 17082 of 2020 THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO AND THE HONOURABLE SMT JUSTICE SUMATHI JAGADAM WRIT PETITION NOs: 17027/2020 & 17082 of 2020 (per Hon’ble Sri Justice R Raghunandan Rao) 30.07.2025 RJS