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(Per Honble Ms. Justice G. Rohini)) The petitioner company is engaged in the business of Computer Education and Training and providing Information Technology Solutions. The petitioner is also engaged in trading in software and it has registered itself under the provisions of the A.P. General Sales Tax Act, 1957 (for short, APGST Act) and is being assessed to sales tax under the said Act for its sales of computers and software.

In pursuance of the Tender Notice, dated 16.06.2001, issued by the Government of Andhra Pradesh through the State Project Director, District Primary Education Programme (DPEP) inviting tenders for imparting computer education in High Schools in the State of Andhra Pradesh, including leasing of computer hardware, software and connected accessories on Build Own Operate Transfer (BOOT) basis, the petitioner company was selected and awarded the contract for execution of the said contract in 105 schools. Accordingly, the 4th respondent State Project Director, District Primary Education Programme (DPEP), Government of A.P. executed an agreement dated 29.6.2002 in favour of the petitioner which shall be in force for a period of five years and the petitioner company commenced the work.

On the other hand, the contention of the respondents is that since the contract is on BOOT basis and it includes providing computers, hardware and software and connected accessories apart from transferring the equipment to the department in good working condition, there is transfer of property from the petitioner to the Government. It is also pointed out that the petitioner who is being paid fees by the Government on instalment basis both for imparting computer education and for subsequent transfer of the equipment, is not doing any free service and therefore it is nothing but a works contract.
Government of Andhra Pradesh as part of its IT vision to harness the potential of IT in improving the quality services to citizens has decided to impart computer education in 1000 schools in the State. To achieve this objective, Government of Andhra Pradesh decided to select agencies for imparting computer education in the schools including leasing of computer hardware, software and connected accessories on Build Own Operate Transfer basis.
The clauses 3, 4, 5, 6, 7, 9 & 14 of the Agreement are also relevant to ascertain the nature of the contract and the same may be extracted hereunder: