I N THE HI GH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HONOURABLE SRI JUSTI CE P.SAM KOSHY AND THE HONOURABLE SRI JUSTI CE SUDDALA CHALAPATHI RAO WRI T PETI TI ON No.28438 of 2007 DATE: 06.02.2026 Between:

M/s. Maytas Hill County Pvt. Ltd.

…Petitioner AND Sate of Andhra Pradesh, Rep. by its Secretary Revenue, Secretariat, Hyderabad and 1 other.

…Respondents

ORDER:

(per the Hon’ble Sri Justice P.Sam Koshy)

Heard Mr. A.V.A. Siva Kartikeya, learned counsel appearing on behalf of Mr. S.Chakrapani, learned counsel for the petitioner; and Mr. T.Chaitanya Kiran, learned Additional Government Pleader appearing on behalf of Mr. Swaroop Oorilla, learned Special Government Pleader for the respondents.

2. The instant writ petition has been filed by the petitioner under Article 226 of the Constitution of India seeking the following relief/s, viz., “……to issue an appropriate writ, order or direction, more particularly in the nature of Writ of Mandamus, declaring the Assessment Order of 2^nd Respondent in CCT's Enft.AC.III/Casc No.31/2007-08 dt.01-12-2007 as illegal arbitrary and set aside the same or in the alternative declare Section 4(7)(d) to the extent it authorizes the levy of VAT on amounts received prior to execution of sale deed as ultra vires Entry 54 of List II of the 7th Schedule to the Constitution of India and strike down the same and pass such other order or orders as this Hon'ble High Court deem fit and proper in the circumstances of the case.”

3. The facts of the case are that the petitioner is a real estate developer engaged in the construction and sale of residential apartments. Prior to the enactment of the Andhra Pradesh Value Added Tax, 2005 (for short the ‘APVAT Act’), the petitioner sought clarification from the Authority for Clarification and Advance Ruling regarding the applicability of VAT on its business transactions, particularly concerning the timing of tax liability on property sales. On 30.07.2006, the Advance Ruling Authority issued its order vide C.C.Ts. Ref.No.PMT/P & L/A.R.COM/80/2006 clarifying that in cases where property is initially registered only as land through a sale deed and there is no subsequent registration after completion of construction, the petitioner should pay VAT at the rate of 1% of the total consideration received or receivable at the time of execution of the sale deed before the Sub-Registrar. This ruling was issued under Section 67(4) of the APVAT Act, which makes such advance rulings binding on all authorities of the Commercial Tax Department within the state. The petitioner relied on this ruling and structured its tax compliance accordingly believing that VAT would be payable only upon registration of sale deeds and not on advance amounts received from prospective buyers during the construction phase.

4. Despite the binding nature of the Advance Ruling, the respondent No.2 issued a notice dated 05.11.2007 proposing to levy VAT on advance amounts received by the petitioner from prospective buyers, irrespective of whether the sale deeds had been registered or title had been conveyed. However, the respondent No.2 levied tax on advance payment by interpreting Section 4(7)(d) of the APVAT Act encompassing all amounts received at any stage of the transaction, including advances paid before registration of sale deeds. The petitioner objected to this interpretation through a communication dated 16.11.2007 contending that the taxable event under Section 4(7)(d) of the APVAT Act occurs only upon registration of the sale deed, as explicitly stated in the Advance Ruling.

5. The respondent No.2, however, overruled the petitioner's objections and proceeded to pass an assessment order dated 01.12.2007, levying VAT on advance amounts and raising a demand of Rs.3,48,36,569/-. The petitioner submitted that this order is illegal, arbitrary, and without jurisdiction, as it disregards the binding Advance Ruling and misinterprets the legislative mandate of Section 4(7)(d) of the APVAT Act. Additionally