IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON’BLE SRI JUSTICE P. SAM KOSHY AND THE HON’BLE SRI JUSTICE NARSING RAO NANDIKONDA TAX REVISION CASE No.162 of 2010 Date: 11.02.2026 Between M/s. Hansa Overseas Enterprises …Petitioner AND The State of Andhra Pradesh …Respondent O R D E R: (per the Hon’ble Sri Justice Narsing Rao Nandikonda)

Heard Sri P. Karthik Ramana, learned counsel representing Sri S. Dwaraknath, learned counsel for the petitioner and Sri Swaroop Oorilla, learned Special Government Pleader for the respondent. Perused the entire material on record.

2. This Tax Revision Case is filed under Section 22 (1) of the Andhra Pradesh General Sale Tax Act, 1957 (repealed by APVAT Act, 2005 read with Section 80 of the APVAT Act, 2005) assailing the impugned order, dated 03.08.2009 passed in T.A.No.1117 of 2003 by the Sales Tax Appellate Tribunal, Hyderabad (herein referred as ‘the Tribunal’).

3. The brief facts leading to filing of the present revision are that the petitioner/assessee is a partnership firm engaged in the business of manufacture and sale of leather garments, duly registered under the APGST Act and the CST Act. The petitioner is an assessee on the rolls of the Commercial Tax Officer (CTO), Mehdipatnam Circle, Hyderabad. During the assessment year 1997–1998 vide proceedings dated 20.02.2001, the Commercial Tax Officer assessed the petitioner’s firm gross turnover at Rs.14,10,69,050/- and exempted export sales under Section 5(1) of the Act for the leather garments amounting to Rs.13,80,89,419/- based on the documentary evidence produced by the petitioner. The Commercial Tax Officer has also granted exemption in respect of the sale of “Exim Scrips” valued at Rs.39,79,631/-, which was moved from the State of Andhra Pradesh to State of Gujarat.

4. Thereafter, Deputy Commissioner (CT), Charminar Division issued a show-cause notice dated 10.10.2002, proposing to revise the assessment order passed by the Commercial Tax Officer under Section 20(2) of the APGST Act on the ground that the exemption granted by the Commercial Tax Officer in respect of the turnover relating to Exim Scrips was erroneous and prejudicial to the interests of the revenue.

5. It was specifically alleged in the show cause notice that the turnover relating to Exim Scrips ought not to have been exempted from tax and shall be taxed by treating the sale transactions as inter-State sales. Subsequently, the petitioner submitted a detailed reply along with objections to the proposed revision, dated 23.12.2002, but the Deputy Commissioner (CT) without properly considering the explanations and material placed on record has proposed to levy tax on the Exim Scrips turnover by treating the said transactions as inter-State. Finally, Deputy Commissioner (CT) fixed the tax liability at the rate of 10% on the turnover of Rs.39,79,631/- holding that the said turnover constituted inter-State sales of Exim Scrips, falling under Entry 197 of the First Schedule to the Act and further held that the alleged transactions were not supported by ‘C’ Forms, therefore liable to tax. While arriving at the said conclusion, the revisional authority relied upon its own earlier order in POLISETTI SOMASUNDARAM, reported in

27 APSTJ page No.27.

6. Aggrieved by the said revisional order, the petitioner preferred an appeal before the Andhra Pradesh State Tax Appellate Tribunal (APSTAT), vide T.A.No.1117 of 2003. Before the learned Tribunal, petitioner contended that the Exim Scrips were physically taken to the State of Gujarat, where they were sold to identified parties. Therefore, the transactions were completed outside the State of Andhra Pradesh and the same are not liable to tax under both APGST and CST Acts.

7. The learned Tribunal having considered the arguments on both sides came to the conclusion that the assessee had failed to establish that the sales effected in the State of Gujarat were subjected to local sales tax in that State where they were taken to Gujar