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CASE NO.:

Appeal (civil) 1148 of 2006

PETITIONER:

M/s Gammon India Ltd.

RESPONDENT:

Spl. Chief Secretary & Ors

DATE OF JUDGMENT: 16/02/2006

BENCH:

RUMA PAL, DR. AR. LAKSHMANAN & DALVEER BHANDARI

JUDGMENT:

J U D G M E N T

(Arising out of SLP(C) Nos. 20487-20488/05)

WITH

C.A. No.1149/2006

(Arising out of SLP(C) Nos.22994-22995 of 2005)

Dalveer Bhandari, J

Leave granted.

The principal question which falls for adjudication

in these appeals is regarding the jurisdiction of the

Assistant Commissioner of Commercial Taxes, Warangal

Division, Andhra Pradesh in initiating and completing

penalty proceedings under the Andhra Pradesh General

Sales Tax Act, 1957 (for short A.P.G.S. Tax Act) after its

repeal.

We are not adjudicating the merits of the

controversy involved in these appeals but are confining

our judgment to the limited question of the jurisdiction of

the Assistant Commissioner in initiating proceedings

under the said A.P.G.S. Tax Act after its repeal. The brief

facts which are imperative to dispose of these appeals

are as under:

The appellant, M/s Gammon India Ltd. is a

construction company. The appellant after obtaining

construction contract in the State of Andhra Pradesh

applied to a registered dealer for the purposes of Section

5B of the A.P.G.S. Tax Act for concessional tax available

to the registered dealers, purchasing from other

registered dealers in the State of Andhra Pradesh.

According to the respondents, the appellant had falsely

issued Form G and claimed reduced rates of tax from the

sellers whereas according to the appellant, G-2 Form was

issued by the Sales Tax authorities and the form

specifically enumerated commodities/items which were

entitled to a concessional tax. One of the items

specifically enumerated therein was ’cement’. Relying on

the said G-2 Form, as was also the case with all other

construction companies in the State, the appellant while

purchasing ’cement’ for manufacture of ready mix

concrete, obtained the benefit of a lower tax.

On 26.2.2005, two show cause notices, being PR

No.6/2004-05 and PR No. 7/2004-2005, were issued by

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the Assistant Commissioner, Commercial Taxes. In order

to properly comprehend the controversy involved in this

case one such notice PR No. 6/2004-2005 is set out as

under:

"GOVERNMNT OF ANDHRA PRADESH

COMMERCIAL TAXES DEPARTMENT

Office of the Deputy

Commissioner (CT)

Warangal Division,

Warangal

P.R. No.6/2004-05, Dated: 26.02.2005

NOTICE

Please take notice that M/s Gammon

India Limited. Paloncha a registered dealer

vide RC. No. WGL/09/1/2440/95-96 under

APGST Act and assesses on the rolls of

Commercial Tax Officer, Kothagudem.

They obtained G2 license vide G2

WGL/09/1/23/2001-02 from Commercial Tax

Officer, Kothagudem to purchase raw

materials, consumable, sub-assembly parts

and packing materials at concessional rates for

use in the manufacture or processing the

goods in side the state under Section 5B of the

APGST Act.

In terms of G. O. Ms. No. 496, Rev.(CT-II)

Dept., 17.07.2001, the commodity "CEMENT"

was made ineligible to purchase within the

state of AP at concessional rate of tax against

Form-G under Section 5B of the APGST Act.

In spite of the fact that M/s. Gammon

India Limited, Paloncha had effected

purchases of CEMENT from local registered

dealers at concessional rate of tax against

Form-G as ascertained from the Deputy

Commissioner (CT), Nalgonda for the year

2002-03 as detailed below.

Name of the Seller : Sugar Cement

Ltd., Matampally

Amount : Rs.29,26,200.00

Thus, it is proved beyond doubt that M/s.

Gammon India Limited, Paloncha had falsely

issued Form-G and claimed reduced rate o