APHC010092112007 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3525] WEDNESDAY, THE SECOND 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: 7266/2007 Between: M/s.gimpex Limited, Opp:kodur Railway Station ...PETITIONER AND The Commercial Tax Officer Rajampet and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. S KRISHNA MURTHY Counsel for the Respondent(S): 1. GP FOR COMMERCIAL TAX 2. 9459/DANTU SRINIVAS( SPL SC FOR CT) 3. P PAVAN KUMAR RAO The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner, was in the business of export of minerals. It was exporting feldspar also. The petitioner company, which is a company incorporated under the Companies Act, 1951, had entered into a scheme of arrangement with the 3rd respondent for the purpose of demerging its feldspar business unit and to merge the same with the 3rd respondent - company. 2 RRR,J & Dr.KMR,J W.P.No.7266 of 2007 2. The petitioner and the 3rd respondent for the purpose of completing this demerger process, had approached the Hon’ble High Court of Judicature at Madras, by way of Company Petition Nos.227 & 228 of 2002. The Hon’ble High Court of Madras, by an order, dated 23.01.2003, allowed the petitions by sanctioning the scheme of arrangement between the two companies w.e.f. 01.04.2002. The said order specifically observed that the said scheme would be binding on the shareholders and the creditors of the company. 3. The 1st respondent, who was the Assessing Officer of the petitioner sought to levy the tax, under the Central Sales Tax Act, 1956, (herein referred to as ‘C.S.T. Act’), on the sale of feldspar, for the assessment year 2002-2003. The 1st respondent, issued show-cause notices, contending a turnover of Rs.20,22,43,632/- relating to the sale of feldspar and quartz requires to be taxed in as much as the said turnover relates to sales, which are not supported by any documents to show that they are export sales. It appears that the petitioner objected to the said assessment, contending that, there was demerger of the feldspar unit with effect from 01.04.2002 and the turnover relating to such sales, thereafter would have to be treated as turnover of the 3rd respondent. 4. The 1st respondent, held that, such an objection is not maintainable in as much as the scheme of the arrangement did not absolve the petitioner from the liability that would arise for the assessment year 2002-2003. On this basis, the 1st respondent, passed an assessment order, dated 31.03.2006, levying 3 RRR,J & Dr.KMR,J W.P.No.7266 of 2007 tax @ 10%, on the sale of feldspar and other products of the petitioner for the assessment year 2002-2003. 5. Aggrieved by this order, the petitioner has approached this Court, raising two contentions. Firstly, the order of assessment was beyond limitation and secondly, the turnover, which has been taxed, under the impugned assessment order, cannot be taxed in the hands of the petitioner. 6. All the respondents have filed counter-affidavits. It may also be noted that the 2nd respondent is the Assessing Officer of the 3rd respondent. The counter-affidavit of the 2nd respondent, specifically states that, the turnover under dispute, was assessed in the hands of the 3rd respondent and exemption was granted on such sales as necessary documents demonstrating export had been filed before the 2nd respondent. 7. In these circumstances, this Court, does not propose to go into the question of the legal effect of the demerger with effect from 01.04.2002. 8. This Writ Petition can be disposed of, on the same ground that, the turnover, which was proposed to be taxed by the 1st respondent, has already been dealt with by the 2nd respondent in the assessment carried out against the 3rd respondent. As there cannot be double taxation of the same turnover and as the assessment had already been completed, in relation to the said turnover in the hands of the 2nd respondent, it would not be permissible to the 1st respondent to tax the same turnover in the hands of the petitioner. 4 RRR,J & Dr.KMR,J W.P.No.7266 of 2007 9. For these reasons, this Writ Petition is allowed, setting aside the assessment order, dated 31.03.2006, passed by the 1st respondent. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed. ________________________ R. RAGHUNANDAN RAO, J _______________________ Dr. K. MANMADHA RAO, J Date: 02.04.2025 KPV 5 RRR,J & Dr.KMR,J W.P.No.7266 of 2007 136 THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO AND THE HON’BLE DR. JUSTICE K. MANMADHA RAO WRIT PETITION No:7266 of 2007 (per Hon’ble Sri Justice R. Raghunandan Rao) 02.04.2025 KPV