Back
2012 Supreme(AP) 32
High Court of Andhra Pradesh
V.V.S. RAO & R. KANTHA RAO
M/s.Ramky Infrastructure Ltd., (Formerly known as Ramky Engineers Pvt. Ltd.,) & Another
Versus
State of Andhra Pradesh, rep. by its State Representatives, before Sales Tax Appellate Tribunal
TREVC.NOS.50 AND 92 OF 2011
Decided On : 06-01-2012
For the Petitioners:S. Dwarakanath, Advocate.
For the Respondent:A.V. Krishna Koundinya, Advocates.
Headnote:
Andhra Pradesh General Sales Tax Act, 1957 - Section 22 (1) ,, 20(2) , 19(1) , 20(2)(a), 5F , 2 (n) and 2 (t) - Andhra Pradesh General Sales Tax Rules 1957 - Rule 6(2) or Rule 6(3) – Common issue would arise for consideration in these revision cases filed under Section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957 Therefore, they are being disposed of by a common order. Court may also mention that when TREVC.No.92 of 2011 was listed before this Court, we were informed that the other case being TREVC.No.50 of 2011 also involves the same question. Though cases are listed before this Court submissions are made by the counsel in the second case and none appeared for the petitioner in the first case. For appreciation of the points for consideration, it is necessary to notice the facts in TREVC.No.92 of 2011 petitioner is an incorporated entity engaged in execution of the works contract. They are registered on the rolls of the Commercial Tax Officer, for the assessment CTO completed assessment taxable turnover was computed under Section 5G of the Act at Rs.90,71,616/-. petitioner contended that tax has to be computed under Section 5F of the Act, which was not accepted. Assailing the assessment order, the petitioner filed appeal before the Appellate Deputy Commissioner (CT), Appeal was allowed relying on the decision of this Court in Communications v Government of Andhra Pradesh (105 STC 227)and the decision of the Karnataka High Court in Constructions Limited v State of Karnataka & Another (111 STC 322). The Additional Commissioner (CT) (Legal), exercise of powers under Section 20(2) of the Act proposed to revise the appellate order on the ground that the same is erroneous and prejudicial to the interests of the revenue –Held, Supreme Court considered the question as to whether a manufacturer, who exercised option to make payment of duty by composition under Rule 96ZO(3) of the Central Excise Rules, 1944, can revert to the regular method of determining the duty. Therein, the manufacturer was engaged in making metal castings and as per the option exercised under Rule 96ZO(3), the excise has to be paid based on the total furnace capacity installed in his factory. Having availed the procedure for payment of duty by composition, the manufacturer claimed benefit under Section 3A(4) of the Central Excises and Salt Act, 1944, which enabled the Central Government to charge excise duty on the basis of capacity of production in respect of certain notified goods. The appellate Tribunal held in favour of the manufacturer against which the Commissioner filed appeals under Section 35-L(b) of the Central Excise Act, 1944. After noticing the scheme in the relevant provisions and rules, the Apex Court observed that the two alternative procedures – under Section 3A(4) and Rule 96ZO(3) do not clash with each other; if the assessee opts for one procedure, he may opt out the same for a subsequent period and seek assessment based on annual production capacity. But he cannot have hybrid procedure combining both in the same year. It was also held that “any taxation measures composition schemes are not unknown and when such scheme was availed of by the assessee it is not at all permissible for him to turn around and ask for regular assessment”. The relevant observations are as follows –Revision cases are dismissed
V.V.S. Rao, J.
The common issue would arise for consideration in these revision cases filed under Section 22 (1) of the Andhra Pradesh General Sales Tax Act, 1957 (“the Act” for brevity). Therefore, they are being disposed of by a common order. We may also mention that when TREVC.No.92 of 2011 was listed before this Court, we were informed that the other case being TREVC.No.50 of 2011 also involves the same question. Though cases are listed before this Court on 22.12.2011, the submissions are made by the counsel in the second case and none appeared for the petitioner in the first case.
For appreciation of the points for consideration, it is necessary to notice the facts in TREVC.No.92 of 2011 (the background facts in the other revision are almost the same). The petitioner is an incorporated entity engaged in execution of the works contract. They are registered on the rolls of the Commercial Tax Officer, Hyderabad (CTO), for the assessment year 2000-01. The CTO completed assessment on 28.02.2002. The taxable turnover was computed under Section 5G of the Act at Rs.90,71,616/-. The petitioner contended that tax has to be computed under Section 5F of the Act, which was not accepted. Assailing the assessment order, the petitioner filed appeal before the Appellate Deputy Commissioner (CT), Panjagutta Division, Hyderabad. The appeal was allowed on 27.12.2002 relying on the decision of this Court in M/s.Media Communications v Government of Andhra Pradesh (105 STC 227)and the decision of the Karnataka High Court in M/s.Maycon Constructions Limited v State of Karnataka & Another (111 STC 322). The Additional Commissioner (CT) (Legal), Hyderabad, in exercise of powers under Section 20(2) of the Act proposed to revise the appellate order on the ground that the same is erroneous and prejudicial to the interests of the revenue. According to the revisional authority, a dealer, who obtains certificate in Form L-1 exercising option for composition of tax payable under Section 5F of the Act as per Section 5G of the Act cannot withdraw the option during the currency of L-1 certificate. A show cause notice was issued and the petitioner filed objections. After considering the objections, the revisional authority confirmed the proposal duly directing the CTO to revise the assessment on the gross and net turn over of Rs.92,28,290/-at 4% under Section 5G of the Act.
The dealer then filed further appeal under Section 19(1) of the Act. The petitioner contended that the exercise of revisional jurisdiction by the Additional Commissioner is barred by Section 20(2)(a) of the Act; there was no prohibition in the Act enabling withdrawal of option of composition of tax under Section 5F of the Act; there are valid reasons for the petitioner to withdraw option for composition though the contracts executed by the petitioner during 2000-01 involve more labour component than the goods and therefore, the composition is not beneficial to the assessee. Learned Tribunal relied on the decision of the Supreme Court in Commissioner of Central Excise & Customs v. M/s. Venus Castings (P) Ltd .(AIR 2000 SC 1568) and dismissed the appeal observing that once a dealer elects for composition at the end of the assessment order, he cannot be permitted to back out on the ground that the composition is not beneficial to him.
Mr. V.Bhaskar Reddy, counsel appearing for the petitioner in TREVC.No.92 of 2011 would submit that there is no express prohibition barring the dealer to revert to the assessment under Section 5F of the Act even though earlier had opted earlier for composition of tax under Section 5G of the Act. He would urge that the decision in Venus Castings is distinguishable as there was a specific provision prohibiting such opting duty of a composition as method of assessing the tax.
The issue that would arise for consideration is whether a dealer, who elects for composition of the tax under Section 5G of the Act for particular assessment year 20001 can withdraw
