HONOURABLE SRI JUSTICE P.SAM KOSHY AND HON’BLE SRI JUSTICE SUDDALA CHALAPATHI RAO TAX REVISION CASE Nos.115 and 138 of 2009 COMMON ORDER: (per Hon’ble Sri Justice P.Sam Koshy)

Heard Mr.T.Chaitanya Kiran, learned Assistant Government Pleader representing Sri Swaroop Oorilla, learned Special Government Pleader for State Tax, for the petitioner and Mr.Karthik Ramana Puttamreddy, learned counsel for the respondent and perused the record. 2. The instant are the two Tax Revision Cases preferred by the State Government challenging the order passed by the Sales Tax Appellate Tribunal (for short “the Tribunal”) in T.A.Nos.839 and 840 of 2002 decided on 31.12.2008. Vide the impugned order, the learned Tribunal has reversed the order passed by the revisional authority i.e. Deputy Commissioner (Commercial Tax), dated 19.03.2002, holding the petitioner liable to pay tax treating as last sale under Section 5 of the Andhra Pradesh General Sales Tax Act, 1957 (for short the “GST Act”). 3. Considering the factual matrix in both the Tax Revision Cases in respect of the same assessee and the point for consideration also being identical, we will proceed to decide both the cases by this common order.

4. The Commercial Tax Officer at the first instance of passing the assessment order dated 31.07.2001 had accepted the contention of the respondent/assessee that he was a sub-contractor and that they cannot be subjected to levy of turnover tax under Section 5-A of the GST Act, as the goods involved in the execution of works contract had already suffered tax and that the respondent-assessee was liable to pay tax only in terms of Section 5 (F) of the GST Act. The said order was reversed by the Deputy Commissioner (Commercial Tax) holding that the assessing authority has erroneously not levied tax on the turnover of Rs.3,67,55,992/- relating to last sales of stone chips effected by the dealer. The Revisional Authority called for the assessment records and thereafter, reached to the conclusion that the assessee has not disclosed details of the stone chips turnovers so supplied from their quarry to the joint venture of Madhucon Binapuri for the road works executed.

5. According to the Revisional Authority, the assessing authority has erroneously assessed the respondent-assessee of tax at the rate of 6% to 1% under Sections 5(F) and 5(A) of the GST Act. In fact, the Revisional Authority was of the view that the respondent-assessee was liable to pay sales tax at the rate of 9% as per Section 5. Thus, the Revisional Authority in the process had also reversed the order of the Commercial Tax Officer. However, upon the respondent-assessee assailing the same before the learned Tribunal vide aforesaid T.As. for the assessment years 1998-99 and 1999-2000, the Tribunal found that infact the Revisional Authority could not gather any material to substantiate sale between the respondents M/s Madhucon Projects Limited and Madhucon Binapuri Joint Venture. The Tribunal further was of the view that for the purpose of fixing the tax liability, there has to be strong materials available on record. The levy of tax, particularly, in the process of exercising revisional powers cannot be done by drawing inference. The Tribunal held that inferring sale is not sufficient in order to fix up tax liability. The sale between two entities has to be clearly established. The Tribunal found that such materials were not either available before the Revisional Authority, nor was it been able to produce by the Department counsel before the learned Tribunal, so as to hold the finding of the Revisional Authority to be proper. The Tribunal took into consideration the legal position as it stood so far as establishing sale is concerned, in the case of Larsen and Tourbo Limited v. State of Andhra Pradesh, [2006] 148 STC 616which further stood confirmed by the Hon’ble Supreme Court in Civil Appeal

No.5239 of 2008, dated 26.08.2008. It is also found that the view taken by the learned Tribunal was also t