THE HON’BLE SRI JUSTICE P.SAM KOSHY AND THE HON’BLE SRI JUSTICE SUDDALA CHALAPATHI RAO TREVC No.177 of 2009 O R D E R: (Per the Hon’ble Sri Justice Suddala Chalapathi Rao)

The present Tax Revision Case is filed by the petitioner/Revenue assailing the orders passed by the learned Sales Tax Appellate Tribunal, Andhra Pradesh, Hyderabad (for short ‘the learned STAT’) in T.A.No.328 of 2006 dt.18.02.2009, whereby the said appeal preferred by the respondent/assessee was allowed by setting aside the order of revision passed under Section 20(2) of APGST Act by the Deputy Commissioner(CT), Warangal Division, Warangal for the assessment year 2000-01

2. The brief facts of the case are that, the respondent/assessee namely M/s Bharat Heavy Electricals Limited, Paloncha, Khammam District Palvancha Khammam District, is a Government of India undertaking engaged in executing works. It is a registered dealer under the provisions of APGST Act, 1957 (for short ‘the Act’) and is on the rolls of the Commercial Tax Officer, Kothagudem. For the assessment year 2000-01, the Assessing Authority granted exemption to the respondent/assessee treating the transactions as labour contracts, as there is no transfer of goods.

3. The Deputy Commissioner(CT) Warangal Division, Warangal (for short ‘the revisional authority’) revised the said assessment under Section 20(2) of the Act vide order dt.10.04.2006, alleging that the assessing authority had erroneously exempted the value of materials supplied in the works undertaken by the assessee.

4. Challenging the said order, the respondent/assessee filed appeal before the learned STAT in TA.No.328/2006.

5. The learned STAT while examining the issue of limitation, held that the revision order dated 10.04.2006 was passed within the prescribed period of limitation u/s.20(2) of the Act. The learned STAT however, held that the Revisional Authority had failed to discharge the burden of proving that there was transfer of goods in the execution of works by the assessee, and consequently, set aside the revisional order and restored the order of the Assessing Authority, dt.10.04.2002.

6. Aggrieved by the order of restoration passed by the learned STAT, the petitioner/Revenue has filed the present Tax Revision Case.

7. The present Tax Revision Case is admitted to consider the following questions of law:

1. Whether STAT is right in setting aside the order of the Deputy Commissioner, Warangal?

2. Whether enquiry is necessary when revision was taken up by the revisional authority?

8. Heard Sri T.Chaitanya Kiran, learned Asst. Government Pleader representing the Special Government Pleader for State Tax appearing for petitioner/Revenue and Sri G.N.G.Shankar, learned counsel representing Sri G.Narendra Chetty, learned counsel for the respondent/assessee.

9. The learned Asst. Government Pleader for petitioner/Revenue would contend that the learned STAT grossly erred in holding that no transfer of material involved in the execution of works by the assessee, without appreciating the factual position and the evidence on record, which clearly established that materials were, in fact, transferred in the course of execution of the works by the assessee and hence, contended that the order of the learned STAT suffers from legal infirmity and is liable to be set aside.

10. Per contra, learned counsel for the respondent/assessee would submit that the assessee, being engaged in erection and commissioning of power plants, had executed only labour contracts and had not supplied any materials and the STAT, upon appreciation of several spiral binding volumes containing the erection invoices raised for the works of KTPS Units and supporting documents, rightly concluded that the payments received were towards labour and service charges, and there is no transfer of material involved in the works carried out by the assessee. He further contended that the assessing authority was justified in exempting the said amount and the revisional authority under erroneous v