V.V.S. Rao, J.

The petitioner company is engaged in the business of manufacture of cotton terry toweling fabrics. It is registered on the rolls of the first respondent under the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act). For the year 2006-2007, the petitioner filed returns in VAT Form 200 disclosing purchases, sales and input tax credit availed and output tax payable. The petitioner claims that he is entitled for tax refund of Rs.4,09,427/-. The returns under Central Sales Tax Act, 1956 (CST Act) were also filed in CST VI Forms for 2006-07 disclosing export sales of terry towels, taxable at zero rate. They claimed exemption of interstate sales as falling under Entry 45 of I Schedule to the VAT Act.

2. In pursuance of authorization issued by the second respondent, the Deputy Commercial Tax Officer (DCTO), Benz Circle, Vijayawada, conducted audit of the accounts of the petitioner on 20.01.2009 for the periods from 01.04.2006 to 30.11.2008. By order dated 27.02.2009, the DCTO disallowed the input tax credit on the goods for which exemption was claimed and by applying formula AXB/C as per Rule 20 of the Andhra Pradesh Value Added Tax Rules, 2005 (the VAT Rules) disallowed the input tax credit for an amount of Rs.2,73,966/-. Thereafter, in exercise of powers under Section 32 of the VAT Act, the second respondent issued a show cause notice proposing to revise the order of the DCTO, dated 27.02.2009. He proposed to levy tax on the sales turnover of cotton terry toweling fabrics on the premise that the petitioner claimed exemption on the sales turnover on the terry towels in the guise of terry toweling fabrics. The petitioner submitted objections to the show cause notice on 23.06.2010. While the matter is pending, at that stage, the first respondent issued show cause notice dated 23.11.2009 under CST Act for the year 2006-07; petitioner filed objections on 16.12.2009 and thereafter first respondent passed the assessment order dated 30.03.2011 demanding Rs.1,97,065/-towards CST duly giving credit to the tax paid. Assailing the same, the dealer has filed the instant writ petition.

3. It is contended by the dealer that the impugned order dated 30.03.2011 was served on the petitioner on 29.06.2011 and that the same is antedated. The impugned order is beyond the period of limitation prescribed under Section 21(3) of the VAT Act and it was passed only to deny the refund claim made by the petitioner. It is further contended that the first respondent did not establish the fact that the petitioner sold the cotton terry towels in the guise of cotton terry toweling fabrics and the fabrics sold by the petitioner falls under Entry 45 of I Schedule to the VAT Act and therefore exempted from VAT. The order was passed without verifying the record and without considering the issues raised by the petitioner. The impugned order is contrary to the circular issued by the Commissioner of Commercial Taxes, whereunder the interstate sales of textiles will be treated as exempted under the VAT Act even if the buying dealers are not able to produce “C” Forms.

4. At the state of admission itself, the first respondent has filed counter affidavit opposing the writ petition. It is submitted that the petitioner has effective alternative remedy and the writ petition is filed without availing the remedy which is not maintainable. The first respondent would further submit that the petitioner claimed exemption for the goods “cotton terry toweling fabrics” falling under Entry 45 of the I Schedule to the VAT Act and also on the input tax credit on the purchase of value of the cone cotton yarn (raw material) purchased within the State from the registered dealers. They also claimed refund of tax in VAT 200 return filed for the month of March, 2009. During the audit, it was noticed that the assessment for the year 2006-2007 under the CST Act was not finalized. Therefore, a show cause notice was issued on 23.06.2010 proposing to levy tax @ 10% on the i