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of <h1>Court rules against respondents in challenge to notice under Andhra Pradesh Sales Tax Act</h1> <h3>Kumar's Metallurgical Corporation Limited Versus Commercial Tax Officer, Vijayanagar Circle, Hyderabad</h3> Kumar's Metallurgical Corporation Limited Versus Commercial Tax Officer, Vijayanagar Circle, Hyderabad - [2005] 139 STC 447 (AP) Issues:1. Challenge to a notice issued under section 17 of the Andhra Pradesh General Sales Tax Act, 1957 for transfer of shares and issuance of duplicate share certificates.2. Jurisdictional validity of the notice and recovery of tax and dues under the Sales Tax Act.3. Interpretation of section 17(1) of the APGST Act regarding recovery of dues from persons holding shares.4. Dispute over the liability of the petitioner to pay amounts due from defaulters.5. Legality of the orders issued by the respondents under section 17 of the APGST Act.Analysis:The judgment of the High Court of Andhra Pradesh dealt with a writ petition challenging a notice dated May 28, 2004, requiring the transfer of shares and issuance of duplicate share certificates in relation to defaulters under the Andhra Pradesh General Sales Tax Act, 1957. The petitioner, a Senior Manager of a company engaged in the manufacture of sponge iron, contested the notice on grounds of jurisdiction and legality. The petitioner argued that section 17 of the APGST Act does not authorize the recovery of tax and dues from individuals who do not owe money to the dealer. The notice attached shares of specific defaulters, demanding their transfer to the Commercial Tax Officer or issuance of duplicate shares within a specified period.The petitioner contended that as per section 17(1) of the APGST Act, money must be due or become due to the dealer for recovery from persons holding shares. It was emphasized that the petitioner did not hold any money belonging to the defaulters as required by the Act. The notice did not quantify any amount due since it pertained to shareholding, and the petitioner had no ongoing transactions with the defaulters. The petitioner further clarified that only two individuals mentioned in the notice were directors of the company, while the others had no association with the company.The counter-affidavit submitted by the respondents mentioned the amounts due from the defaulters and highlighted a common interest between the petitioner and defaulters due to their partnership in the company. The Court observed that under section 17 of the APGST Act, the respondents lacked the authority to demand share transfers. Consequently, the orders issued by the respondents were deemed illegal and not in compliance with the Act. An additional affidavit suggested granting liberty to proceed against the petitioner if the attachment under section 17 was found to be unlawful.In conclusion, the High Court allowed the writ petition, quashing the impugned notice and ruling in favor of the petitioner. The judgment emphasized that the respondents' actions were unauthorized under section 17 of the APGST Act, and no costs were awarded in the matter.
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