WP/28003/2008 of M/s. Cobra Instalaciones Y Services S.A., Vs N. Kantha Rao on 30 December 2008

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD(Special Original Jurisdiction)

TUESDAY, THE THIRTIETH DAY OF DECEMBERTWO THOUSAND AND EIGHT

PRESENTTHE HON'BLE MR JUSTICE GODA RAGHURAMand THE HON'BLE MR JUSTICE SANJAY KUMAR

WRIT PETITION No.28003 of 2008

Between:

M/s. Cobra Instalaciones Y Services S.A., B-324, New FriendsColony, New Delhi, rep. by its Manager (Accounts), Madhusudan Darjee.

..... PETITIONER

AND

1 N. Kantha Rao Commerical Tax Officer, No.II, Nellore, Nellore District. Nellore, Nellore District.

2 J.V.M. Sarma Assistant Commissioner (CT), LTU, Nellore, Nellore District.

3 The Deputy Commissioner (CT),

Nellore, Nellore District.

4 The Commissioner of Commercial Taxes, Government of AndhraPradesh, Hyderabad.Pradesh, Hyderabad.

5 The State of Andhra Pradesh, rep. by its Secretary, Revenue (CT)Department, Secretariat Buildings, Hyderabad.

6 M/s. Rail Vikas Nigam Ltd., (A Government of India Enterprises), D.No.9-1-129/302, 3rd Floor, Oxford Plaza, Sarojini Devi Road,Secunderabad-500 003, rep. by its D.No.9-1-129/302, 3rd Floor, Oxford Plaza, Sarojini Devi Road,Secunderabad-500 003, rep. by its General Manager (Electrical)

.....RESPONDENT(S)

Petition under Article 226 of the constitution of India praying that inthe circumstances stated in the Affidavit filed herein the High Court will bepleased to to issue an appropriate writ or order or direction moreparticularly one in the nature of Writ of Mandamus declaring:- a) that theaction of the 1st respondent in passing the impugned order dated20.11.2008 in refusing to grant the certificate in Form 501D though no partof the turnover of works contract executed with the 6th respondent isexigible to tax under the Provisions of AP VAT Act, 2005 relying on theorder passed by the Authority for clarification and advance ruling in thecase of M/s. Navayuga Engineering Company Ltd., Visakhapatnam dated27.05.2008 as illegal, arbitrary, high-handed, without authority of law andjurisdiction and set aside the same; and b) declare that Clause (iii) of Sub- Section 4 of Section 67 as invalid and ultra-virus since it makes the validright of appeal provided under the Statute as futile in view of the bindingnature of the order passed by the Authority for Clarification and AdvanceRuling on all authorities including the Appellate Authorities and strikedown the same; and c) declare that the petitioner's application in Form501C dated 14.07.2008 shall be deemed to have been accepted in viewof Clause (f) of Sub-Rule (1) of Rule 18 of AP VAT Rules, 2005 since the1st respondent did not pass any orders on the application within thestipulated time of 60 days from the date of receipt of the applications inForm 501C and pass Counsel for the Petitioner:MR.BHASKAR REDDY VEMIREDDY

Counsel for the Respondent No.: GP FOR COMMERCIAL TAX

The Court made the following :

THE HON'BLE MR JUSTICE GODA RAGHURAM

and

THE HON'BLE MR JUSTICE SANJAY KUMAR

WRIT PETITION No.28003 of 2008

ORDER:(per the Hon’ble Sri Justice Goda Raghuram)

Heard the learned counsel for the petitioner and the learnedStanding Counsel for Commercial Tax for respondents.

The petitioner’s application under Rule 18(1)(f) of AP VAT Rules,2005 read with the relevant provisions of APVAT Act, 2005 in Form 501Cfor quantification of the tax deducted at source in relation to the worksexecuted by the petitioner for the 6[th] respondent has been rejected byorder of the 7[th] respondent, dated 20-11-2008, impugned herein. Therejection is ordered inter alia as the 7[th] respondent was satisfied that inview of the Advance Ruling issued by the Advance Ruling Committee inproceedings Ref.NoAR.Com./156/2007, dated 27-05-2008, in the case ofM/s.Navayuga Engineering Company Limited, Visakapatnam and thedecision of the STAT in the case of M/s.KMC Constructions Limited,Hyderabad, the goods involved in the execution of works contract, whichare purchased from out of the State dealers are liable to be assessed totax under the APVAT Act, 2005.

It is the grievance of the petitioner that the 7[th] respondent hasfailed to consider the decisions of this court reported in 39 APSTJ 23 and132 STC 272 as well as the provisions of Section 4(7)(g) of A.P.ValueAdded Tax Act, 2005 (added by Act 5 of 2007 with effect from 01-09-2006), which are clearly on the issue as to the liability of goods purchasedfrom outside the State dealers employed in the execution of workscontract and the liability to tax under the Act of such goods.

As the impugned order of the 7[th] respondent does not refer to theprovisions of Section 4(7)(g) of the Act nor does it take into considerationthe decisions of the jurisdictional High Court in the cases referred tosupra, which are directly on the issue, it is the considered view of thiscourt that the impugned order is unsustainable and is accordingly setaside. The application of the petitioner in Form 501C is also rejected bythe 7[th] respondent on the ground that the petitioner failed to enclose withthe application a copy of the agreement and the quantification of theestimation of the material required in the contract executed by the petitioner in favour of the 6[th] respondent. The petitioner’s counsel statesthat though this material was already appended to the application in Form501C, the petitioner would again furnish this material for consideration ofthe 7[th] respondent and will do so within a period of one week from thedate of receipt of a copy of this order. In the circumstances, it is herebydirected that the 7[th] respondent shall receive all the material produced bythe petitioner and pass an acknowledgment in receipt of the same.

The order of the 7[th] respondent, dated 20-11-2008, is accordinglyset aside and the 7[th] respondent is directed to pass an order afresh on thepetitioner’s application in Form 501C duly considering the provisions ofSection 4 (7)(g) of the Act and the judgments of this court reported in 39APSTJ 23, 132 STC 272 and 23 APSTJ 195 and any other provision orprecedent that may appear relevant and germane to the issue. The 7[th]respondent shall pass a reasoned order reflecting due consideration ofthe above statutory and precedential authorities afresh, within a period offour weeks from the date of receipt of a copy of this order.

The writ petition is disposed of as above, at the stage ofadmission. There shall be no order as to costs.

Date: 30-12-2008Note:Issue C.C. in three days (B/o) Prv ____________________

GODA RAGHURAM, J

__________________

SANJAY KUMAR, J