Andhra HC (Pre-Telangana)
Mukand Engineers Limited vs State Of Andhra Pradesh on 16 July, 2007
Equivalent citations: (2007)10VST588(AP)
Author: Bilal Nazki
Bench: Bilal Nazki
JUDGMENT Bilal Nazki, J.
1. Heard the learned Counsel for the parties.
2. The revision petitioner is the dealer in works contracts and on the roles of the Commercial Tax Officer, Dwarakanagar Circle, Visakhapatnam. The petitioner was finally assessed on gross and net turnover of Rs. 11,15,77,800 and Rs. 1,31,93,850 respectively for the assessment year 2000-2001 by the Commercial Tax Officer. On examination of the assessment record, the Deputy Commissioner noticed that the assessing authority has erroneously allowed the exemption of turnover of Rs. 9,83,83,950 being second purchase of iron and steel and M.S. plates. So, the Deputy Commissioner (CT) has taken up the revision and issued show cause notice dated February 27, 2004. Objections were filed by the assessee, and the Deputy Commissioner passed an order. Aggrieved by the said order, the petitioner went to the Tribunal and filed an appeal before the Sales Tax Appellate Tribunal, Hyderabad, which had dismissed the appeal. Therefore, the petitioner has come up with the present tax revision case.
3. The undisputed facts are that the petitioner is a works contractor. He purchased iron and steel and before applying the iron and steel to his works contract, the petitioner fabricated the same into some structures. The question which falls for consideration before the Deputy Commissioner and also the Tribunal was "whether the fabricated structures made from iron and steel, which had suffered tax, were to be assessed under Section 5F of the Andhra Pradesh General Sales Tax Act, 1957 (hereinafter referred to 'the Act') or they have to be excluded from application of Section 5F under the first proviso". This question has been decided against the petitioner. The Tribunal and the Deputy Commissioner were of the view that they were free to come to their own conclusions as to whether the iron and steel and the goods fabricated from iron and steel were the same products or were different products. In this connection, they relied on various judgments of the Supreme Court and this Court to come to the conclusion that iron and steel products were different from the fabricated structures made out of iron and steel.
4. But, in our view, a mistake was committed by the Deputy Commissioner as well as by the Tribunal. Inasmuch as the proviso to Section 5F as it appears in the Act, does not survive in its original form, because of the case of Media Communications v. Government of Andhra Pradesh , the legality of the proviso to the extent places a restriction on the benefit under Section 5F to the extent "in the same form in which they were purchased by the contractor" had been removed by this judgment. Therefore, the first proviso to Section 5F has to be read without the words, "in the same form in which they were purchased by the contractor". The judgment was very clear in view of the last lines at para 18. We therefore, struck down the words "in the same form in which they were purchased by the contractor" to this proviso as void. The effect of the judgment was that these words are not read into the proviso. It clearly makes out no difference, whether iron and steel after fabrication into structures was a different product or the same product. Therefore, the application of the judgment of the Supreme Court or this Court to come to a conclusion that fabricated structures made out of the iron and steel were different products, is of no consequence. Even if it is accepted that the fabricated structures were different products, than iron and steel, even then they were covered by proviso to Section 5F in view of the law laid down in the case of Media Communications . That judgment has become final, and therefore, the same is binding on the Deputy Commissioner as well as the Tribunal. To that extent, the judgment of the Tribunal and the order of the Deputy Commissioner is set aside.
5. Another question raised before us is with regard to the rate of tax at which the goods were taxed. Although there are no sufficient pleadings either in the memo of appeal before the Tribunal or before this court, but from the record it appears that the goods have been taxed at eight per cent where ex facie the goods have to be taxed at only four per cent because of the applicability of the first proviso of Section 5F. Since the earlier authorities and the Tribunal treated the goods to be different than iron and steel, they might not have gone into the question whether the goods were taxed at four per cent or eight per cent. Besides coming to the correct conclusion on this question, some factual aspects of the matter might have also to be considered. Therefore, on this question as to whether the goods had to be taxed at four per cent or eight per cent and whether the goods in reality have been taxed at four per cent or eight per cent, we remit the case back to the Tribunal, who may decide the matter, after hearing the parties.
6. The tax revision case is accordingly allowed in part. No costs.