Court rules tax and penalty demands unlawful, grants relief to petitioners

The Court allowed the writ petitions, finding the demand of tax and penalty from the petitioners without authority of law. The respondents' reliance on a previous decision was deemed inapplicable, as the disputed amounts were not demanded under the relevant section. The Court granted relief to the petitioners, restricting and substituting the amounts collected, with a directive for lawful actions against the petitioners if violations were proven.

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Issues involved:
The issues involved in this case are related to the action of the first respondent in collecting certain amounts towards tax and penalty of five times tax from the petitioners, who are dealers registered under the Andhra Pradesh General Sales Tax Act, 1957.

W.P. No. 28057 of 1995:
The petitioner, a dealer of gold and silver articles, challenged the action of the first respondent in collecting tax and penalty without proper verification or notice. The first respondent collected a sum under coercion without giving any show cause notice or opportunity to the petitioner, which was deemed arbitrary, illegal, and without authority of law.

W.P. No. 28058 of 1995:
Similarly, the petitioner in this case, also a dealer of gold and silver articles, contested the collection of tax and penalty under coercion without proper verification or assessment. The petitioner questioned the arbitrary collections made without notice or opportunity, highlighting discrepancies in the payment process.

The Court found that the demand of tax and penalty from the petitioners was without authority of law as no assessments were made. The respondents' reliance on a previous decision was deemed inapplicable to the current case, as the disputed amounts were not demanded under the relevant section for composition of offenses. The Court allowed the writ petitions, restricting the amount in one case and substituting it in another, with a clear directive for the respondents to proceed against the petitioners in accordance with the law if violations were found.

Therefore, the writ petitions were allowed with costs, providing relief to the petitioners and emphasizing the need for lawful actions against them if violations were established.

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