APHC010524612009 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3529] MONDAY, THE THIRTIETH DAY OF MARCH TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION NO: 10233/2009 Between: 1. V. RAM MOHAN RAO,, S/O. SEETHARAMAIAH, PLOT NO. 31, KALYAN NAGAR PHASE-I, HYDERABAD. ...PETITIONER AND 1. THE COMMERCIAL TAX OFFICER, GOVERNOR PET, VIJAYAWADA. 2. THE APPELLATE DEPUTY COMMISSIONER CT, D.NO. 40-5-19/9B, MOGALRAJAPURAM, VIJAYAWADA. 3. THE JOINT COMMISSIONER CT LEGAL, O/O. THE COMMISSIONER OF COMMERCIAL TAXES, ANDHRA PRADESH, HYDERABAD. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased toto issue a writ of mandamus or any other approopriate writ or order or direction decalring the action of the 3rd Respondent in passing the impunged order dated 24-03-2009 revising the remand order of the 2nd respondent dated 22-05-2007 for the year 2003-04 as arbitrary, illegal, contrary to the provisions of the Act, settled legal position, and without jurisdiction and consequently set aside the same and to pass 2 RRR,J & TCDS,J W.P.No.10233 of 2009 IA NO: 1 OF 2009(WVMP 2883 OF 2009 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased vacate the Interim stay dt. 20.5.2009 granted in W.P.M.P.No.13192 of 2009 in W.P.No.10233 of 2009. IA NO: 2 OF 2009(WPMP 13192 OF 2009 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of all further proceedings pursuant to the impugned order dated 24- 03-2009 of the 3rd Respondent for the year 2002-03, in the interest of justice. Counsel for the Petitioner: 1. DANTU SRINIVAS( SPL SC FOR CT) 2. GUDURI VENKATESWARA RAO Counsel for the Respondent(S): 1. GP FOR COMMERCIAL TAX (AP) 3 RRR,J & TCDS,J W.P.No.10233 of 2009 The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner is a contractor undertaking works contracts on his own or as a sub-contractor to other main contractors. 2. The assessment, of the petitioner, for the assessment year, 2003-2004, was taken up by the Commercial Tax Officer, Governorpet Circle and an order of assessment, dated 09.01.2006, came to be passed. In these assessment proceedings, the Commercial Tax Officer, had rejected the contention of the petitioner that, a turnover of Rs.3,71,68,351/-, would be exempted as the said turnover, relates to works contracts executed, in the State of Madhya Pradesh and outside the State of Andhra Pradesh. Similarly, the contention of the petitioner that, a turnover of Rs.4,36,64,734/-, is not taxable as the tax, on the said turnover was already paid by the main Contractors, who had sub contracted the said works to the petitioner, had also been rejected. 3. Aggrieved by this order of assessment, the petitioner had approached the Appellate Deputy Commissioner, who disposed of the Appeal, by an order, dated 22.05.2007, remanding the matter back to the Assessing Officer, for ascertaining whether the petitioner was entitled to an exemption, in relation to the turnovers claimed to have been executed, in the State of Madhya Pradesh and whether the main Contractors had paid tax on the turnover, relating to the sub-contract work executed by the petitioner. 4. The Revisional Authority, set aside the order of the Appellate Deputy Commissioner, by a revisional order, dated 24.03.2009. Aggrieved by this 4 RRR,J & TCDS,J W.P.No.10233 of 2009 order of revision, the petitioner has approached this Court, by way of the present Writ Petition. 5. The petitioner, in response to the show-cause notice, issued by the Revisional Authority, had claimed that the turnover of Rs.3,71,68,351/-, had already been assessed by the Tax Authorities, in the State of Madhya Pradesh and produced an order of assessment, before the Revisional Authority. However, the Revisional Authority, rejected this order of assessment, on the ground that, a mere order of assessment, in the State of Madhya Pradesh, was not sufficient to grant such exemption and it was necessary for the petitioner to produce various records, including contract agreements, bills raised on the contractee etc., to demonstrate that the works were executed in the State of Madhya Pradesh and to show that goods used in the works in the State of Madhya Pradesh moved from the State of Andhra Pradesh or were purchased in the State of Madhya Pradesh. On this basis, the Revisional Authority held that, the Appellate Deputy Commissioner ought not to have remanded the matter back, in relation to this turnover. 6. The Revisional Authority, while considering the claim of the petitioner that, tax on a turnover of Rs.4,36,64,734/-, had already been paid by the main Contractees and no tax would be payable by the petitioner, had rejected the said contention, on the basis of a judgment of a Division Bench of the erstwhile High Court of Andhra Pradesh in the case of M/s.Larsen & Toubro 5 RRR,J & TCDS,J W.P.No.10233 of 2009 Limited & anr Vs. State of Andhra Pradesh & Ors.1 as well as the judgment of Hon’ble Supreme Court in the case of State of Andhra Pradesh & Ors Vs. M/s.Larsen & Toubro Limited & anr2. 7. Sri P. Girish Kumar, the learned Senior Counsel appearing for the petitioner, would contend that, the said order of revision, was without jurisdiction in as much as Section 20 of the A.P.G.S.T. Act, provides for a revision only, where there is a prejudice to the interest of revenue. He would submit that, a mere remand, for ascertaining the goods, cannot be treated to be an order, which cause prejudice to the interest of the revenue. For this proposition, he relies upon a judgment of the erstwhile High Court of Andhra Pradesh in the case of Bankatlal Satyanarayana Parikh & Co. Vs. Commissioner of Commercial Taxes, A.P. & anr3. The learned Senior Counsel would also contend that the finding of the Revisional Authority that the Hon’ble erstwhile High Court of Andhra Pradesh in the case of M/s.Larsen & Toubro Limited & anr Vs. State of Andhra Pradesh & Ors., had held that the levy of tax, would fall only on the petitioner as the sub-contractor is incorrect. He would submit that, in such circumstances, the order of revision, requires to be set aside. 8. In the case of Bankatlal Satyanarayana Parikh & Co. Vs. Commissioner of Commercial Taxes, A.P. & anr, a Division Bench of this erstwhile High Court of Andhra Pradesh went into the scope of Section 20 1 [2006] 148 STC 616 (AP) 2 (2008) 47 APSTJ 124 3 2001 (2) ALD 147, 2001 (2) ALT 151 6 RRR,J & TCDS,J W.P.No.10233 of 2009 of the A.P.G.S.T. Act. The Division Bench, after considering the language of Section 20 of the A.P.G.S.T. Act, had held that, a Revisional Authority would be entitled to invoke the powers of revision, under Section 20 only, if the order or proceeding against which such revision is to be invoked, was prejudicial to the interest of Revenue. The Division Bench, had also held that, unless such prejudice is shown, the powers of revision cannot be invoked. 9. In the present case, the Appellate Deputy Commissioner, had remanded the matter back to the Assessing Officer to ascertain the facts. The Appellate Deputy Commissioner has not given any findings, which would cause prejudice to the interest of revenue. In such circumstances, following the judgment of the Division Bench of the erstwhile High Court in the case of Bankatlal Satyanarayana Parikh & Co. Vs. Commissioner of Commercial Taxes, A.P. & anr, this Writ Petition would have to be allowed. 10. Though the Writ Petition can be allowed on this ground, it would only be appropriate to consider the issues raised against the turnovers mentioned above. 11. A Division Bench of the erstwhile High Court of Andhra Pradesh in the case of M/s.Larsen & Toubro Limited & anr Vs. State of Andhra Pradesh & Ors., considered the question of liability of payment of tax, in a works contract, where a sub-contractor is involved. In this case, the Authorities sought to tax both the main contractor as well as the sub-contractor, on the same turnovers. The contention raised by the revenue was that, there were 7 RRR,J & TCDS,J W.P.No.10233 of 2009 two sets of sales, namely a sale by the sub-contractor to the contractor and second sale by the main contractor to the contractee. This contention was rejected by the Division Bench, which held that, there would be only one sale and the tax on such sale can be collected either from the main contractor or the sub-contractor and that, such tax cannot be collected from both the main contractor as well as the sub-contractor. In such a situation, it would be very necessary to ascertain whether tax had already been collected from the main contractors as contended by the petitioner. To that extent, the remand of the matter to the Assessing Officer cannot be treated to be an order, which is prejudicial to the interest of the revenue. 12. The second turnover, relates to the turnover, which is claimed by the petitioner, to be related to works executed in the State of Madhya Pradesh. In support of his contention, the petitioner had also produced an order of assessment, passed by the Tax Authorities, in the State of Madhya Pradesh. However, the Revisional Authority refused to accept the said order of assessment, on the ground that, the petitioner would have to adduce further material to demonstrate that the works had been executed in the State of Madhya Pradesh and the goods used in execution to such contracts had either moved from the State of Andhra Pradesh to the State of Madhya Pradesh or that goods were purchased in the State of Madhya Pradesh itself. In such circumstances, the Revisional Authority, without giving such an opportunity to the petitioner could not have passed an order of revision. In any 8 RRR,J & TCDS,J W.P.No.10233 of 2009 event, the Appellate Deputy Commissioner, had remanded the matter for ascertainment of such facts itself. 13. In such circumstances, the remand, ordered by the Appellate Authority, in relation to this turnover, cannot be treated to be an order, which is prejudicial to the interest of revenue. 14. For all the aforesaid reasons, it would only be appropriate to allow this Writ Petition, setting aside the order of revision, dated 24.03.2009, with a further direction to the Assessing Officer to complete the enquiry within a period of six (06) months from the date of receipt of this order and to pass an order of assessment within the said time. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed. ________________________ R. RAGHUNANDAN RAO, J _________________ T.C.D. SEKHAR, J Date:30.03.2026 KPV 9 RRR,J & TCDS,J W.P.No.10233 of 2009 230 THE HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO AND THE HON'BLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION No.10233 of 2009 (per Hon’ble Sri Justice R. Raghunandan Rao) 30.03.2026 KPV