TREVC/43/2011 of M/S.K.KANTHA REDDY AND CO Vs THE SALES TAX APPELLATE TRIBUNAL on 7 January 2026

I3,189 I IN THE HIGH COURT FOR TI{E STATE OF TELANGANA AT WEDNESDAY, THE.SEVENTH DAY OF JANUMY TWO THOUSAND AND TWENTY SIX PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE SUDOALA CHALAPATHI RAO TAX REVIS CASE Nos: 38.43 55 ot 2O11 Case No.38 of 201 Tax Revision Case under Section 22{1) (see rule of 40) of the APGST Act' 1957 to revise the order dated O2-12-2O1O passbd in T.A.No.204 d 2OO7 on the file of the Sales Tax Appellate Tribunal, (STAT), Hyderabad. M/s. K.Kantha Reddy & Co., PWD (R & B) Contractors 4-1-100, Attapur, Bahadurpura, Hyderabad 5OO 264. ...AppellanUAppel{ant AND State of AP rep. by SR before STAT ll Floor, Commercial Taxes Complex

...RespondenURespondent Counsel for the Petitioner: Mr. S.R.R. Viswanath Counsel for the Respondent: Mr. Swaroop Oorilla, Special Government Pleader for State Tax Tax Retision Case No-43 of 2O11 Tax Revision Case under Section 22(1) (see rule of 4O) of the APGST Act' 1957 to revise the order dald 20-C,r',-ZJ'10 passed in T.A.No.166 ot 2OO7 on the file of the Sales Tax Appellate Tribunal, (STAT), Hyderabad. Between: M/s. K.Kantha Reddy & Co., PWD (R & B) Contractors 4-1-1OO' Attapur, Bahadurpura, Hyderabad 5O0 264. ...AppellanUAppellant AND State of AP rep. by SR before STAT ll Flnor, Commercial Taxes Complex

...RespondenURespondent

.t Counsel for the Petitioner: Mr. S.R.R. Viswanath Counsel for the Respondent: Mr. Swaroop Oorilla, Special Gdvernment pleader for State Tax No.

Tax Revision Case under Section 22(1) (see rule of 40) of the APGST Act, 1957 to revise the order dated o2-12-2o1o passed in T.A.No.740 of 2007 on the file of the Sales Tax Appellate Tribunal, (STAI), Hyderabad. M/s. K.Kantha Reddy & Co., PWD (R & B) Contractors 4-1-100, Attapur, Bahadurpura, Hyderabad 500 264. D .AppellanUAppellant 9tate of l\P rep. by .SR before STAT ll Floor, Commercial Taxes Complex

...RespondenURespond€nt Counsel for tfie Petitioner: Mr. S.R:R. Viswanath Counsel for t:he Respondent Mr. Swaroop Oorilla, Special Government pleader for State Tax The Court made the fotlowing: COMMON ORDER

i'i.. IN THE HIGH COI]RT FOR tHE STATE OF TELANGANA j AT YDERABAI) ii THE, IIONOT'RABLE SRI.TUSTICE P.SAIVI KOSHY axo i: THE HONOT'RABLE SRI JUSTICE SUDDALA CHALAPATHI RAO ,! Dated: 0.7,01.2026 - I TREVC No.38 of 2011: Between: ' , IWs.K.Kantha ReddY & Co. : PWD (R&B) Contractors, 4-1-100, Attapur, BahadurPura, , : Hyderabad - 500 264. , i Petitioner And : I The State of Andhra Pradesh Rep by SR before STAT, II Floor, Commercial Taxes ComPlex, .Respondent COMNION OINDDY ber Hon'bte Sri lustice P'SAM KoSHYt: ,: Heard Mr.s-R.R.Viswanath, learned counsel for the petitioner and Mr.Swaroop Ooril'la, leamed Special Governrnent ,1 Pleader for State Tax in all the three Tax Revision Cases' Perused the record.

':.2 l'"r i':. 2' These are the three r* n"rririon cases fired by the same r,i: -;j petitioner assailing the three orders passed uv fir" hamed srAT in T'A'No'204 of zoo. for the *u"i**t year t rnrr-rrdecided on i: ' , -

- M IZS0J0++.ANo.740 of 20Ql:for tfe-assEsTment year l99g:99 _ :l' ji decirled on 02. r2.zoto and T.A.No;.r66 of zool for the assessmenr , ;: year 1999-2OOO decided on zOrOq.2OlO. Since, the substantial '.,' i questions of law contended by thq pedtioner in alt these three Tax Revision cases been identi"u J*""pt ro, tt " [r;;r, assessrnenr yearri and three independent oiders having been passed by the learned STAT, rhese three ."uirioi petitions stands decided by this comrnon order

3. The question of law to facts and law upholding of the 5-A of APGST Acr by the Today, when the maffer is Govemment pleader for Division Bench decision of question of law involved in Special Appeal No.9 of 2004 considerediwas wtrether on the of turnover tax under Section is proper, Iegal and justified. up for hearing, learned Special pnoduced before this Bench a .t this;:Courr directly dealing with the ,'i -t ': .L tne itnstant Tax Revision Cases i.e., ,ii i wtribh stood decided b):tnE Division :i, :: ! : .i .ir i ii. ' :ii ,ii 'l'iii :l' i:

Benctr of this Court on 30.04.2015. The Division Borch dealing with the statutory pmvision particularly Section 5-A of the APGST Act answEred the question of law in favour of Revenue. While dealing with the question, the Division Bench held as under:

7. (a) There is no dispute with ke faca, whic* are narrated supra. The AC (nt) who had initially made a provisianal assratsment had assessd the assessee for the year 1997-98 under the Act and hd levied tumover tax under Section 5-A of the Act on rte purchase htrnover of milk vtde his proceedings dated 26-06.1999. The aggrieved assess@ had preferred an appeal before the ADC disputing that the turnover sabjected to tax under Section 6-A is not tiable to turnover tax under Section 5-A. The ADC had allowed the appeal of the assessee upholding the said contention of the assessee. The CTO had passed the. consequential Jinal assessment orders of the assessee following the orders of the ADC and had thus not levied turnover tax on the purchase turnover of milk Finding the said orders of the ADC and the consequential final orders of the CTO prejudicial to the interests of the revenue of the Snte, the Commissioner having entertained a suo motu revision had issued a show cause notice and an opportunity of hearing and had finalty confirmed the proSal fn the

.chow cause notice and had auordingly set aside the ,ord*s of the ADC and revtsd theJinal ansquential asiesisment ordeis of tie CfO 7o, the year lggT-ga under the Act and had levied turaover tax at the rate of l% on purchase turnover of milk i.e., Rs.15,84,00,140/-. Ihus, the Commissioner had rearded a finding that turnover tax under Section 5-A is leviable and payable on taxable filmover under the charging Section 6A.

7. (b) lYe have given earnest consideration to the facx and the submissions. In view of the fac* and the contentions, it is necessary ta refer to infra, the provisions of law namely Sections 6A and 5A of the Act dealing respectively with leuy of tax on turnover relating to purchases of certain goods and l"uy of turnover tax. 6A Leuy of tax on turnover relating to purchase of certain goods: Every dealer, who in the course ofbusiness:

i. purchases any goods (the sale or purchase of which is liable to tax under this Ac| from a registered dealer in circutnstances in which no tax is payable under Section 5 or under Section 6, as the case may be, or ii- Purchases any goods (rte sale or purdtase of which is liable n ux under this Aa) fun a Person orter than a registerd detler;-snd

c. @nsum6 such goods in any manufrcure of other goods for sale or consumes them otherwise, or; a- disposes of such goods in the manner other than by way ofsale in the State, or

b. despatches them to a pl.ace outside the Sute except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall pay nx on the turnover relating to purchase aforesaid at the same rate at which but for the existence of the aforementioned circamstances, the tax wouW have been leviable (on such goods under Section 5 or Section 6. 5-A Leuy of nx on tur over: (l) Notwith*anding anything contained in this Act, tax shall be levied at the rate of [one paise in every rupee ofa turnover ofa duler, other than the dealers mentiond in sub-sqtion (I-A)J whose total turnovq in a year exceeds ntpees ten lakhs; Providd that the tax shall not be levid under this section on that part of the turnover of any dealer on which the dealer is liable to Pay tax at the point of lery tspeAlied in the First Schedule, acept petrol, dicsel oil, aviation turbine fuel, engine oils, lubri@ting r7\ oils, greases bratre Jruids, furnace otr and ail kinds of motor vehiclesJ Second Schedule, Fifth Schedule and Seventh Schedule to the Act: Provided further that no tax under thts section shall be payable on that part of turnover which relatq to;

i. sale or purchase of goods specified in third Schedule; it. sale or purchase of gotods specified in Fourth Schedule;

iii. sale or purchase of goods specified in Sixth Schedule;

iv. sale or purchase of goods in the course of inter-State trade or commerce; v. sole or purchase of goods in the course of export out of the territory of India or sa.le or purchase in the course of tmport into the territory oflndia;

vi. sale or purchase of goods exempt from tax gmerally under sub-section (I) of section 9 of the satd Act; vii- ail amounts corected-b1tw-ayof tcix underthe provisions of the Central Sales Tax Act, tg\6. The turnover of the present assessee exceeded Rs.l0 lakhs during the subject year is not in dtspute. section 5A' which storts wtth a non-abstante crantse, clearly says that tav shall be levied at the rote of loh in \ \ \

every rury of a turnover of a dealer orter thur the dealers mentioned in sub-sution l'A whose nnl turnover in theyear exceeds Rs-10 taklts' Iltus' futton 5A specificatly mentions the turnovers which are not liable n tux and in that turrpvers mentioned therein' the transactions under Section 6A are not specifically mentiond. Further' the purchase of mtlk from unregistered dellers dles wt come under the points of leuy mentioned in the provision of low' It is also pertinent to note that by an amendment to Section 6A the words 'or Section 5A' were omitted from Sution 6A by Act 22 of 1995 with efea fron 0I'04'1995' Therefore, on a plain and harmonious reading ofboth the proisions, it appears that there is no prohibition from leuying turnover tax under Section 5A on the transactions covered by Sqtion 6A. Since the purchase turnover which is disputd turnover relatd n purchase of nitk made from unregisterd dealers' the same is not eltgible for uemption as no exemption was granted by the Govemment under Section 9(l) of the Act in respect of such turt overs- It is not in disputc that leuy of tax under Section 9(I) on sale of fresh milh curd and butter milk sold by the dealers exclusively dealing in them and also their products are uentPt from tax. Therefore, on a plain consideration of the provisions of law, we are ol the considered view that the orders of the Cbmmissioner leuytng tu of Ig4 on tne $lgyg! _t_yru_ouer tnvolvgt! _in _fke ruafier_ on .-a_ finding that turnover tax under Sectton 5A. is payable on taxable turnover under charging Section 6A js correct. Potnt is accordingly answerd. 4- Further it is refleted that the finding of the Division Benc.h stands further fortified from the two decisions which were also considered and reried upon by the Tribunal while dearing with the appeals, where under the Tribunal has reproduced the judgrnents of this High court in, the case of rw/s.spectro Bouring coru'oany Limited, Mourari & others u state of Andhra Pradeshtand arso ws-Nauyuga Engineering company Limited u state of Andhra pradesh2 wherein again similar issues were taken up ftrr consideration and High court has categorica,y held the turnover leviable under section 5-A of the APGST Act. It would be relev.nt at this juncture to reproduce the rerevant portion of the Tribunal's order with regard to these two aforesaid judgments are concerned: \ I tzoocl 38 ApsrJ 6 '1zooty45 ApsrJ pag

:rDl D oaln! ol Papafqns aq Pu pfoqs auos a,fl nt p ua1 alsDq o? yalca[qns s! raAou,n, aqt araqn s! xq ra^ount ary to a1mollor aqt Pt1l (!!) :sD^ouJnl qcns uo alqD! al s! xtl .o ouru ou 'm, pata[ns spoo8 gg uolroas PUD flg uopcas "DPun \floq aculs Puo r0o1to tulod o11toa tfuo to xtt paasns 4ou sDrl qztqtt't ralourt'l atltto Ttod tDW uo Quo a1qo1,o1 s, ml ta^ou)nt lo,tl (l) :?aPuaruoc sot^ 7t's1uo11addo ary lo t1oqaq uO 'uoaoraplsuoc n! dn auo) saq gS uolQas puD gg uollrllas Dpun xDt o7 pa\ca[qns sratourn, aqt uo salyoqtno puolswy/saltttoqlno Sulssassv a4l ,(q xol ntounl lo thal aq, 'qoaddo to qqDq slttt uI 'd9 wD gg suolcas u1 patolndl1s sta ou)n! aqt ub apo1rc1 s1 n)t JiriouJry 'antataql 'suolsqcra aql u! PqDraunua uaaq ,ou " oq 19 Puo gs uoltzas 'soslaotd arlt u! ,no qads tQ\ocyo*a\o" a D'l sl,/o!s?ll!cx,' Dq,o lll WD ralourrt, a1qoa&mtlc atq to uoltofidwoc tot rapl,to,td oqD flq aSnqc aql satDarz tluo lou t1c14ttt uolps &u1fuoqc patot&atut uo s! YS uolrns, :saqlot so Wq W p rasqo g tJSdY 8E (t00d u1 paltodat ttraryd ottlpuyto entg 'A eaqlo T 1PPoN 'PaUu!7 tuodtttoS t41nog o4tads's/n u! Punq14 s'W

i \) v uolrcas {o.uoltDtatdra?u, tol g uo11c)g u1 patoslaua sD m, fo apt lrs-Dq puo ha1 lo 7u1od lo tdaaua aqt Uodul ot t"artoc tou atolatarll n ry .p?ag[ pauhlsso q u1 to\d pnl uortcas olo yod Buucoua aql aalg o7 so os asnDlo aluolsqo_uou lo uolt"nporru, ,tq fio pauon uaag sDl auos aq, ,raqtouo tltltt Suolrcas asaq| lo tuo to sl.tod Sutcoua aql aaaa4J"q plbfuoc ,uatoddo awos s! ararfi .ta^oraq puo atn|op&zT atg t(g paToaullap so sp|agftuata[tp q arD]?do lg puo gg ,yg ,g uoucaS 'ttod Suncoua lo uoltotado aqt uto{ suol1dacra fio Salatoc suqslaotd uolto1ndwoc so lla.A so BwL.totlc aq, Woq not stt a!.filttl szlot ,! sollcnu so u1fiasg u1 apoc a|aldutoc D s! t! lDW raMasqo puo lg puo gg ,ys 'S uoltcas Sutztotlc atll pazeouo lDunqyJ a%[ ds PUD gs uolrcas ut p|o1dua|uoc )aloutn, ary uo a1qoalnqc s! xDl ra^outt4 atotataql puD yS uogcag lo uolgotado arfl wott woucas ayarfi pa?nqco {isnoosuoc tou sDq arryqqtql aqt puo looq afipts "rl, u!-a.bq, tryaqD 2ra04 ls puD gg aolpas ,uolrcnpo4u, sl, lo aup aq, ,o pao apoc faulntuoc 1[7as o s1 yS aolroas lor0 faPualuor satt4 t! ,anua^ay at17lofioqaq ug .tcy "loqtrr aq| to daaas n41c o a^Drt touuac ,, atotataql puD ary)aio o, spualal 1! ,12!qt^ uoltcas .m\nc1yod rfuo ol olat ,oq saop y -S uogras u! asnop aruotDqD_uou atfi Dql 6!l) \-'l OI

5E and 5F which are indeperdent charging sections. Sntion 5 spealrs about leuy of tax on sale or purchase ofgoods", wheieas Sectioi 5A speala about "leuy of tax on htmover". The field of operation of both srctions is diferent and it is not correct a hod rtat where basic tax is levied under Section 5 there could be no leuy of turnover tax as a general proposition applicable to all transactions. Since the turnover contemplated by Sution SE and 5F are special class by themselves, the concept of basic leuy on sale or purchase as per Schdules under Sution 5 cannot be imported and applied for levy of fiirnover tali on these lurnovers under Section 5A except those indicated in the first proviso for the scheduled goods. Accordingly held: "There is nothing in Section 5A to remotely indicate or even suggest that the charging section 54, although all other exclusions have categoricaAy spelt out in the provisos- On the fact of the clear langmge of Section 5A, it is not permissible to excfude the turnover pertaining to lease rental and worlcs antractfrom the purview of TOT by any implication or presumption". Dealtng with tle non-abstante clause in Section 5A, the Tribunal held that although Section 5A star* with a non-abstante clause, it was engrafted in the section by the legislature as a measure of abundant precaution so as to avoid any conJlict which may ensue while giving efect n the provistons of enacting part ofSection 54.

L? .. The sanc view was expressd by this Tribunaf in Ws Nawyuga Engineering Crglt_tpany Limited V* State ol Andhra pradqh reported in e007) 45 APSTI page I, which was affirmed by the Htgh Court of Atdhra Pradesh, wherein the High Court of Andhra Pradesh hetd asfollows: . _ t|ft" Division Bench endorsed the decision of the tulq TaxAppettate Tribunal that Sectioi-S)-i o, integrated charying section, untaining ade whic* not onb creot* the charge but also- provides for comtrrutation of the chargeable turniver for 'the p:rl:t" -{ iu- W. The turnovers peraining to Section 5E and 5F are also exigible ti the saita*. f:,!h:J,.Sectbn 5A_x specifrcitty **ot 1or--to,y o7 ror urat came on Stante later than Section 5E and SF which were already in the statute Ooo,t. f,ni ,oia Plluision reflects the latest will of l*gislature to leuy TOT even on turnovers under Seition'SE oni si".-

5. The aforesaid judicial precedents of this Court on the very same question of law has not been disputed by the teamed counsel for the petitioner and he fairly concedes to the fact that the aforesaid judgments squarely answers the questions of raw raised by the petitioner in these three Tax Revision Cases as well.

6. For the aforesaid rcasons, we do not find any merits in the present Tax Revision Cases filed by the petitioner. The questions of Iaw as has been decided by the judicial precedents stands answered r) \ \

in favourof revenue holding that the tur-novertax would be leviable on thecharges in terms of Section 5(0 as well.

7. Accordingly, these Tax Revisions Cases stand dismissed. There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any; shalt stand closed. -+/ SD/. K. SRINIVASA RAO JOINT REGISTRAR

To, //TRUE COPY// SECTION OFFICER

1. The Sales Tax Appellate Tribunal, (STAT), Hyderabad

2. One CC to Mr S.R.R. Viswanath, Advocate [OP UC]

3. Two CCs to GP FOR STATE TAX, High Court for the State of Telangana at I I

HIGH COURT DATED:07101t2O26 Ti"rE sh Y o () 0 I rt8 2S1$

COMMON ORDER

TREVC.Nos.38, 43 and 55 of 2011 .5,oArc DISMISSING THE TAX REVISION CASES * @ *