1 RRR,J & BVLNC,J W.P.No.23418/2020 tAPHC010351892020 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3535] FRIDAY, THE NINTH DAY OF MAY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE B V L N CHAKRAVARTHI WRIT PETITION No:23418 of 2020 Between: Penmetsa Satyanarayana Raju ...PETITIONER AND The State Of Andhra Pradesh and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. SIMHACHALAM KARUKOLA Counsel for the Respondent(S): 1. GP FOR COMMERCIAL TAX (AP) 2. GP FOR REGISTRATION AND STAMPS (AP) The Court made the following ORDER: (Per Hon’ble Sri Justice R. Raghunandan Rao) Heard Sri K. Simhachalam, learned counsel appearing for the petitioner and learned G.P. for Commercial Tax appearing for the respondents. 2. The petitioner had purchased Ac.2.52 cents of agricultural land in Sy.No.30/2D of Mypa Village, Pala Koderu Mandal, West Godavari District, 2 RRR,J & BVLNC,J W.P.No.23418/2020 from M/s. Sagar Financiers, under a deed of sale, dated 03.11.2017. This document was presented before the 3rd respondent-Sub-Registrar, Anandapuram S.R.O, Anandapuram Mandal, Visakhapatnam District. The 3rd respondent kept the document as a pending document with P-1793/2017 assigned to the document. Aggrieved by the refusal of the 3rd respondent, to release the said document, the petitioner approached this Court by way of the present writ petition. 3. The petitioner also stated that the document was not being released on account of Form V notice of attachment, under Section 27 of the Revenue Recovery Act, 1864 (for short ‘the Act’) had been issued by the Commercial Tax Officer, Bhimavaram Circle (The Commercial Tax Officer has not been made a party to the present writ petition). 4. The Deputy Commercial Tax Officer-II, who was arrayed as the 6th respondent, has filed a counter affidavit as well as an additional counter affidavit. In the counter affidavit, it is stated that one Sri K. Dheeraj Varma had conducted business in the name of M/s. Grow Rich Minerals, Mypa, and had defaulted in payment of tax under the provisions of A.P. VAT Act, 2005 and Central Sales Tax, 2017 to the tune of Rs.50,51,882/-. The said Sri K. Dheeraj Varma sold away his land to the M/s. Sagar Financiers by way of a deed of sale dated 25.11.20155. The 6th respondent states that the said Sri K. Dheeraj Varma having received intimation of audit dated 11.09.2015 and pre- assessment show cause notice date 06.11.2015, with a view to evade 3 RRR,J & BVLNC,J W.P.No.23418/2020 payment of tax, had alienated the immoveable property on 25.11.2015. Due to this fact of evasion, the provisions of A.P. Revenue Recovery Act had been initiated by attaching this immoveable property of Sri K. Dheeraj Varma for the purpose of auctioning the same. The 6th respondent contended that the transaction of sale, dated 25.11.2015, by Sri K. Dheeraj Varma, who is arrayed as the 9th respondent herein, to M/s. Sagar Financiers, arrayed as the 8th respondent, was done with an intention to defraud payment of tax and the same is void on account of the provisions of Section 27(1) of the A.P. VAT Act, 2005. Consequently, the subsequent sale transaction between the 8th respondent to the petitioner would also be void and the attachment of property cannot be treated as illegal or arbitrary. 6. In the additional counter affidavit, the 6th respondent set out the chronological sequence of events. In this chronology, it is stated that Sri K. Dheeraj Varma himself had filed a revised return under the A.P. VAT Act for March, 2015, on 09.09.2015. In this return, the dealer had stated that an amount of Rs.43,22,968/- was payable as tax. Further amounts had been demanded on 06.11.2015. Thereafter, an order of assessment / audit dated 29.12.2015 had been passed for an amount of Rs.29,97,131/-. Later, a notice of attachment and process for auction of the property was initiated on 14.09.2016 for recovery of an amount of Rs.50,51,882/-. The notice of assessment dated 06.11.2015 and the order of assessment dated 29.12.2015 have also been placed before this Court. 4 RRR,J & BVLNC,J W.P.No.23418/2020 7. Section 27 of the A.P. VAT Act reads as follows: 27. (1) Where during the pendency of any proceedings under the Act, or after the completion thereof, any VAT dealer or TOT dealer or any other dealer creates a charge on, or parts with the possession by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever, or any of his assets in favour of any other person such charge or transfer shall be void unless he proves that such charge or transfer was not with the intention to defraud any tax or any other sum payable. (2)(a) where, during the pendency of any proceeding for the assessment or reassessment of any tax or turnover tax which has escaped assessment, the authority prescribed is of the opinion that for the purpose of protecting the interests of the revenue it is necessary so to do, may with the previous approval of the Commissioner, by order in writing, attach provisionally in the prescribed manner any property belonging to the dealer; (b) every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under clause (a): Provided that the Commissioner may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years. 8. The chronology of events, makes it amply clear that the 9th respondent Sri K. Dheeraj Varma, had admitted clearly that he was due for a minimum amount of Rs.43,22,968/- by 06.11.2015 itself. These dues arose in 5 RRR,J & BVLNC,J W.P.No.23418/2020 March 2015, as the return related to the month of March 2015. In such circumstances, abrupt sale of land to the 8th respondent can only lead to a reasonable suspicion that the sale was an attempt to evade payment of tax and to clear his other dues. In such circumstances, the provisions of Section 27 squarely apply to the present case. However, this provision also gives an opportunity to the dealer to demonstrate that the transaction was not an attempt to evade payment of tax. The dealer has not taken any such step. In the circumstances, it would be open to the respondent authorities to apply section 27 of the A.P. VAT Act and disregard the sale by the 9th respondent to the 8th respondent and the consequent sale by the 8th respondent to the 9th respondent, by the appropriate authority passing an order. Thereafter, it would be open to the authorities to auction the said property for recovery of dues. 9. Accordingly, the writ petition is dismissed. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any shall stand closed. _______________________ R. RAGHUNANDAN RAO, J ________________________ B.V.L.N. CHAKRAVARTHI, J Js. 6 RRR,J & BVLNC,J W.P.No.23418/2020 THE HON’ABLE SRI JUSTICE R RAGHUNANDAN RAO AND THE HON’BLE SRI JUSTICE B.V.L.N. CHAKRAVARTHI WRIT PETITION No.23418 of 2020 (per Hon’ble Sri Justice R Raghunandan Rao) 9th May, 2025 Js