J. Chelameswar, J.

The first petitioner is a limited company and the second petitioner is a shareholder thereof. The prayer in the writ petition is as follows :

"For the reasons and in the circumstances stated in the accompanying affidavit, the petitioners herein pray that this honourable court in the interests of justice be pleased to issue a writ of mandamus or any other appropriate writ, direction or order under article 226 of the Constitution of India, 1950 declaring that section 4(7), Explanation VI to section 2(28) of the Andhra Pradesh Value Added Tax Act, 2005, rules 17(1)(a) and 17(1)(c) read with rule 17(1)(e) made thereunder are repugnant to article 366(29A)(b) of the Constitution of India and the scheme of levy and recovery of taxes both at the hands of the nominated sub-contractors, who are registered dealers, remitting taxes as well as the main contractor like the petitioners, is beyond the legislative competence of the State Legislature under Serial No. 54 of List II of the Seventh Schedule to the Constitution of India and the resultant assessment and recovery is violative of articles 14, 19(1)(g) and 265 of the Constitution of India, and consequently to set aside the order of the third respondent in form VAT 305 dated May 31, 2006, or pass such further or other orders as it may deem fit and proper in the circumstances of the case."

The second petitioner, obviously, joined the first petitioner as the first petitioner cannot claim a fundamental right under article 19(1)(g) of the Constitution of India, in view of the decision of the Supreme Court in Rustom Cavasjee Cooper v. Union of India AIR 1970 SC 564. The first petitioner-company, inter alia, is engaged in the execution of civil, mechanical and other contracts throughout the territory of India. The first petitioner is a dealer registered under the APVAT Act, 2005 and the CST Act, 1956 on the rolls of the third respondent herein. The first petitioner entered into a number of contracts with various persons (hereinafter referred for the sake of convenience as "the employers"). All the employers, for the purpose of the present writ petition, happen to be limited companies either private or public. The details of these various contracts may not be necessary for the purpose of this writ petition, except that admittedly, all these contracts are "works contracts" within the meaning of the expression occurring under article 366(29A)(b) of the Constitution of India. During the period commencing from April 2005 to November 2005, the first petitioner, either wholly or partially, executed those various contracts numbering 108 and received certain payments from the employers, which constitute the turnover of the first petitioner for the said period.

The third respondent by his proceedings dated March 10, 2006 proposed to assess the first petitioner's liability for tax under the APVAT Act, for the period commencing from April 2005 to January 2006, at Rs. 13,30,99,589. The first petitioner replied to the same by its letter dated April 13, 2006. The third respondent by his proceedings dated May 31, 2006, ultimately, assessed the liability of the first petitioner under the APVAT Act for the abovementioned period at Rs. 9,75,89,261 and demanded payment of the same.

The substance of the petitioner's case is that the execution of the various contracts referred to above, was entrusted to various "sub-contractors" either wholly or partially. Wherever such execution was entrusted to a subcontractor, the State can either collect the tax under the APVAT Act, from the sub- contractor or from the petitioner and in the event of the State deciding to collect the tax from the petitioner, the amount of tax, if any, collected from the concerned sub-contractor, must be given credit to while determining the tax liability of the petitioner. This contention of the petitioner is on the legal premise that notwithstanding the fact that the works contract was executed by the petitioner through