1 APHC010079582006 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3525] WEDNESDAY,THE NINTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE DR JUSTICE K MANMADHA RAO WRIT PETITION NO: 17313/2006 Between: M/s.prakash Exports, Tuni. ...PETITIONER AND Asst Commissioner Ct Ltu Kakinada ...RESPONDENT Counsel for the Petitioner: 1. Phani Viswanath Challa Counsel for the Respondent: 1. 9460/SURIBABU S(SPL SC FOR CT AP) 2. GP FOR COMMERCIAL TAX The Court made the following order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner is a proprietary concern having it’s principal place of business at Kollam in Kerala State. It was registered under the A.P VAT Act as well as the CST Act as the petitioner had established a branch in Tuni in East Godavari District of Andhra Pradesh and was exporting Cashew nut and Kernel from Tuni. 2 2. The assessment of the petitioner for the year 2005-2006 was undertaken by the 1st respondent, culminating in an order of assessment, dated 29.07.2006. 3. The petitioner had claimed exemption on the turnover of Rs.12,42,84,516/- on the ground that the said turnover related to export sales covered under Section 5(1) of the CST Act or sales in the course of export, covered under Section 5(3) of the CST Act. 4. The 1st respondent split the above turnover into two parts namely, Rs.4,34,60,582/- relating to the export sales claimed under Section 5(1) and Rs.8,08,23,934/- falling under Section 5(3) of the CST Act. 5. The 1st respondent, after going through the documents submitted by the petitioner, stated that the petitioner which is M/s.Prakash Exports, Tuni had purchased Cashewnut and Kernel from unregistered dealers within the State of Andhra Pradesh. However, the Cashewnut purchased was exported by M/s. Prakash Exports, Kollam. The 1st respondent took the view that though M/s. Prakash Exports, Kollam is the Head Office of the petitioner and M/s.Prakash Exports, Tuni was a Branch Office of the petitioner, they would have to be treated as two separate entities and consequently the exports made by M/s.Prakash Exports, Kollam cannot be taken as export sales made by M/s.Prakash Exports, Tuni. The 1st respondent, on this basis, held that there was a notional branch transfer from M/s.Prakash Exports, Tuni to M/s. Prakash Exports, Kollam. Due to this transfer, there was no sale, by M/s. 3 Prakash Exports, Tuni under Section 5(1) of CST Act and the purchase of the said Cashewnut and Kernel would be taxable under Section 4(4) of the A.P VAT Act, 2005. 6. Similarly, the 1st respondent while verifying the sales claimed by the petitioner under Section 5(3) of the CST Act, had held that the petitioner had sold the Cashewnut and Kernel to M/s.Vijayalaxmi Cashew Company, Kasibugga, Sun Food Corporation, Narsingapallyand M/s.Nut Product Company, Tuni but the cashew, which was sold to these organizations was not exported by them directly. The 1st respondent held that the exports made by these purchasers were by the Head Offices of the purchasers and not by the Branch Office which had purchased the Cashewnut and Kernel. 7. Learned counsel for the petitioner would contend that the turnovers, in both categories, are sought to be taxed on the ground that the Head Office of the petitioner and the Branch Office of the purchasers are different entities due to which benefits under Section5(1) and 5(3) of the GST Act cannot be granted. The learned counsel submits that the said view is not in accordance with law. 8. Aggrieved by the said order of assessment, dated 29.07.2006, the petitioner had approached this Court, by way of the present Writ Petition. 9. Learned counsel for the petitioner would submit that the petitioner as well as the purchasers who had exported Cashewnut and Kernel under Section 5(1) of CST Act are individual juristic entities and they cannot be split 4 into two separate personalities of Head Office and Branch Office. Learned counsel for the petitioner would also submit that the same view was taken in relation to another assessment order passed against the petitioner. The Appellate Authority in the appeal filed by the petitioner against such an order, had referred to variousjudgments of this Court as well as the Hon’ble Supreme Court and had held that there cannot be any division or bifurcation of a dealer into Head Office and dealer at the Branch Office and consequently set aside the order passed by the assessing officer in that assessment order. 10. Learned counsel would submit that the judgments cited by the Appellate Authority as still authority for the proposition that the petitioner cannot be separated into a Head Office and Branch Office whereby the claim of the petitioner can be rejected. 11. The erstwhile High Court of Andhra Pradesh in the case of The KCP Limited vs. State of A.P (1993) 88 STC 374(AP) had held that a limited company is one juristic entity and the same cannot be split into separate juristic entities of Head Office and Branch Office. A similar view was taken by the Hon’ble Supreme Court in the case of English Electrical Company of India Limited., vs. DeputyCommercial Tax Officer (38 STC 475) and Sahnev Steel and Press Works Limited., vs. Commercial Tax Officer (60 STC 301). 12. In the present case, the petitioner is a proprietary concern and not a company. However, this difference would not take away the effect of the aforesaid judgments. In the present case, the petitioner is separated into a 5 Head Office and a Branch Office and neither the provisions of the CST nor the A.P VAT Act make any such distinction. 13. In such circumstances, it would be necessary to set aside the order of Assistant Commissioner (CT) (LTU), Kakinada in Ref:TIN No:28280196028/05-06, dated 29.07.2006. 14. Accordingly, this Writ Petition is allowed. There shall be no order as to costs. As a sequel, miscellaneous petitions, if any, shall stand closed. ______________________________ R. RAGHUNANDAN RAO,J _______________________ DR. K. MANMADHA RAO,J RJS 6 HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO & HON’BLE DR. JUSTICE K. MANMADHA RAO WRIT PETITION NO: 17313/2006 (per Hon’ble Sri Justice R Raghunandan Rao) 09.04.2025 RJS