Decided on June 30,2010



J. Shyam Sundar Rao, Chairman - (1.) THIS is an appeal filed against the Revisional orders of Joint Commissioner (CT) (Legal), O/o The Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad in CCTs Ref. No. L -V(1)/670/2008, dated 29 -11 -2008. The appellant is M/s. Patel Engineering Limited, Banjara Hills, Hyderabad. It is on the rolls of Commercial Tax Officer, Hyderguda Circle, Abids Division, Hyderabad. The Commercial Tax Officer, Enforcement Wing, O/o. Joint Commissioner (CT) Enforcement Wing, Hyderabad upon examination of the records of the appellant on 24 -10 -2007 issued Form VAT 305 on 2 -12 -2007 under the provisions of APVAT Act, 2005. The appellants are registered dealers in Hyderguda Circle. They are doing business in works contracts. The business premises were inspected by the Commercial Tax Officer -1, Enforcement Wing on 24 -10 -2007. The Commercial Tax Officer, Enforcement Wing found on inspection that the appellant had been executing lift irrigation works for Government of Andhra Pradesh. A show cause notice was issued by the Commercial Tax Officer calling for the objections of the assessee. The assessee filed its objections. The Commercial Tax Officer after elaborately discussing the objections, levied tax @ 12.5% as shown below: Hence the total taxable turnovers for the above tax periods are as under: (I) Goods obtained from Out side the State and Out side the Country: (II) Turnover Works executed under Non Composition (III) Turnover on which tax deducted from subcontractors work bills: Total tax due to the Department is (I+II+III) of Rs. 83,70,206.
(2.) AGGRIEVED by the above order, appeal was preferred before the Appellate Deputy Commissioner (CT), Secunderabad Division, Hyderabad. The ADC allowed the appeal by order dated 7 -6 -2008. The Joint Commissioner (CT) (Legal), Andhra Pradesh, Hyderabad by virtue of powers conferred under Section 20(2) of the APGST Act, having observed that the orders passed by the Appellate Deputy Commissioner are prejudicial to the interests of revenue, issued pre -revision show cause notice proposing to restore the order passed by the Commercial Tax Officer calling for the objections of the assessee. The assessee filed objections stating that the goods purchased from outside the State and used in Works Contract in the State are not taxable under the APVAT Act because such transactions representing inter -State transactions are beyond the purview of APVAT Act it is also contended before the Revisional Authority that the goods purchased from outside the State were specifically designed and brought into the State only to incorporate them in the works contracts executed by them. It is finally contended that it is not an intrastate transaction but it is inter -State transaction not exigible to tax. The Revisional Authority relying on the decision of M/s. Gannon Dunkerly reported in 23 APSTJ 195 observed that though the goods were purchased out side the State, there are two taxable events and the goods at the time of incorporation are exigible to tax and it is purely an intra State sale transaction taxable under APVAT Act. The Revisional Authority also relied upon the decision of this Tribunal in M/s. KMC Constructions Limited Vs. State of Andhra Pradesh in TA Nos.714/2008 & 935/2008, dated 15 -10 -2008. Aggrieved by the above order, the present appeal is preferred, contending in the appeal grounds as follows:
(3.) THE appellant has been awarded a contract by the Government of Andhra Pradesh. The scope of contract according to the appellant reads as hereunder: "The work includes Design and execution of all civil works like, Pump house, surge pool, delivery mains, cistern etc., and Design Manufacture, testing at Manufacturer's works, Inspection, Packing, Supply and delivery at site, erection, testing and commissioning of 5 nos. pump -Motors of 30MW each and associated Electro Mechanical and Hydro Mechanical works on EPC basis as per the scope of the work set forth in the bid documents and also operation and maintenance of the plant for three (3) years, after successful Commissioning of the project All Bids shall be prepared and submitted in accordance with the terms and conditions of the bid Document.";

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