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 SUDDALA CHALAPATHI RAO TREVC.Nos.24 and 38 of 2022 Dt.20.02.2026 Between:

The State of Telangana …. Petitioner and M/s Perfect Circle India Limited …Respondent COMMON ORDER: (Per the Hon’ble Sri Justice Suddala Chalapathi Rao

1. Both the Tax Revision Cases are filed by the State challenging the common order, dt.13.08.2019, passed by the Telangana VAT Appellate Tribunal, Hyderabad (for short ‘the Tribunal’) in TA Nos.154 and 155 of 2014.

2. Since the parties in both the revisions are one and the same, and the issue involved was common for the assessment years 2008-09 to 2011-12, both the revision cases were heard analogously and disposed of by this common order.

3. The brief facts of the case are that the respondent/assessee is a registered dealer on the rolls of the Commercial Tax Officer, Nampally Circle, Abids Division, and that it had a manufacturing facility at Nasik, Maharashtra, where they manufactured self- tensioned circular metal pieces made from pig iron, commonly known as ‘Piston Rings’, and that the goods were said to have been transferred from the Head Office at Nasik on stock transfer basis against Form-F declarations and were making local sales within the State of Andhra Pradesh(erstwhile) and were paying tax @ 4% on the said goods.

4. While so, the Assistant Commissioner (CT), VAT-I, Abids Division, Hyderabad (Assessing Authority), on authorization, conducted audit of the books of accounts of the respondent/assessee and issued notice of assessment in Form VAT 305A, dt.10.01.2012, proposing to levy VAT of Rs.44,46,351/- for the assessment years 2008-11 along with penalty equal to the tax proposed and interest @ 1% on the tax due for the delay, to which the assessee filed objections on 19.01.2012, and a personal hearing was granted on 24.01.2012. Thereafter, the Assessing Authority by order dt.15.02.2012, confirmed the levy of VAT @ 12.5%/14.5% on Piston rings and the Assessing Authority although withdrew the proposal to levy penalty and interest in the common order, imposed penalty by a separate order, dt.19.06.2012.

5. Aggrieved by the said orders of assessment and imposition of penalty and interest, the assessee filed the appeals before the Appellate Deputy Commissioner (CT), Hyderabad Rural Division, and the said appeals were dismissed confirming the orders of the Assistant Commissioner vide common order dt.05.01.2013. Aggrieved thereby, the assessee filed appeals before the learned Tribunal in TA.Nos.154/2014 and 155/2014, and the learned Tribunal, upon appreciation of the tax enquiry and after considering the statutory provisions and the case laws cited, had allowed the said appeals vide common order, dt.13.08.2019.

6. Challenging the said order, the present Tax Revisions are filed by the Revenue.

7. The instant revisions are filed to consider the following issues:

1. Whether, on the facts and in the circumstances of the case and in law, the Hon’ble Telangana VAT Appellate Tribunal is correct in holding that the piston rings manufactured by the respondents are classifiable under entry 70(viii) of Schedule IV of APVAT Act, 2005 but not under residuary entry Schedule V as assessed by the Audit Officer and affirmed by the Appellate Authority?

2. Whether, on the facts and in the circumstances of the case and in Law, the Hon’ble Telangana VAT Appellate Tribunal is failed to appreciate that the Piston Rings were classifiable under Chapter Heading 8409 9913 whereas iron and steel products would fall under Chapter 72, which cover goods in the nature of raw materials, intermediaries and that piston ring was a finished product?

8. Heard Mr. Swaroop Oorilla, learned Special Government Pleader for State Tax for revision petitioners and Sri Narendra Dave, learned counsel representing Sri Lakshmi Kumaran Sridharan, learned counsel for respondent/assessee.

9. The learned Special Government Pleader, Mr. Swaroop O