M. Seetharama Murti, J. -
(1.)This writ petition, under Article 226 of the Constitution of India, is filed seeking verbatim the following relief:
'...to issue a Writ or order or direction particularly one in the nature of Writ of Mandamus setting aside the impugned assessment order passed by the first respondent in A.A.O.no.158399, dated 06.05.2019, for the tax period April, 2014 to March, 2015, in seeking to levy tax on the transactions of the petitioner under Section 4(7)(a) of the APVAT Act, 2005 as illegal, arbitrary, barred by limitation and without jurisdiction, or to pass such further or order orders as this Hon'ble Court may deem fit and proper in the circumstances of the case.'
(2.)We have heard the submissions of Sri S.Krishna Murthy, learned counsel appearing for the writ petitioner; and, of the learned Government Pleader for Commercial Taxes appearing for the respondents. We have perused the material record.
(3.)The case of the petitioner is this: 'The petitioner is a Private Limited Company registered under the Companies Act, 1956. It is engaged in the business of construction of flats and apartments. It is an assesse under the A.P. Value Added Tax Act, 2005 ['the Act', for short] on the rolls of the first respondent. B.Vijaya Bhaskar, a resident of Tirupathi, Andhra Pradesh, and M/s. Green Mango Infratech Private Limited, Bangalore, are co-owners of Ac.12.05 cents of land at Tirupathi. They have entered into Joint Development agreement with M/s. Chakra Eden Greens, which is a partnership firm, for construction of 140 flats in four blocks. The said partnership firm has constructed and discharged its tax liability on 35 flats in Block no.2. The said Firm has expressed its inability to complete the remaining blocks. Thereupon, a separate Development Agreement-cum-General Power of Attorney was entered into, on 31.01.2012, for completion/construction of the remaining flats. Basing on the information issued by the Regional and Vigilance & Enforcement Officer, Tirupathi, the 1st respondent passed an assessment order, dated 22.03.2018, holding that the said individual, namely, B.Vijaya Bhaskar, has failed to get registered under the APVAT Act, 2005. Questioning the same, the petitioner filed W.P.no.26239 of 2018 and the same was disposed of directing the assessing authority to pass orders afresh after giving an opportunity to the petitioner to file objections. Thereafter, the said B.Vijaya Bhaskar, has filed reply, dated 05.06.2018, before the assessing authority. The 1st respondent issued a show-cause notice, dated 29.03.2019. Since the wife of the Managing Director of the petitioner company fell seriously ill, on account of failure of her two kidneys, the reply could not be filed before the assessing authority. While so, the 1st respondent passed assessment order, dated 06.05.2019, confirming the proposals contained in the show cause notice.'
3.1 Learned counsel for the petitioner further submits as follows: 'The petitioner sought time for filing objections on the ground that the Managing Director's wife was seriously ill and that attempts are being made to identify a donor of a kidney for transplantation. In the said circumstances, the petitioner was disabled to file the objections to the Show-Cause notice issued by the 1st respondent. The impugned assessment order is bared by limitation. Though the 1st respondent invoked the jurisdiction under Section 21(5) of the Act and had stated that the petitioner had wilfully suppressed the turnover with an intention to evade legitimate payment of the tax disrespecting various provisions of the Act, the 1st respondent has not given any specific finding as to how and why the petitioner had evaded payment of tax. The 1st respondent stated that the petitioner declared a turnover of Rs.4,61,44,500/- as against the mirrored turnover as per the sale deeds amounting to Rs.5,30,46,000/-. The next reason assigned by the 1st respondent for invoking Section 21(5) of the Act is non-filing of Form VAT 250 and the change in the methodology of assessment. The turnover declared by the petitioner in its monthly VAT 200 returns is as per the sale deeds effected by it. At the time of registration of the flats, the petitioner had filed Demand Drafts indicating the payment of tax. In the show cause notice, the dates of sale deeds are not specifically mentioned as certain sale deeds were taken into consideration by the petitioner in the subsequent year. By bringing the subsequent year's transactions to the transactions pertaining to the present assessment period, the 1st respondent cannot assume jurisdiction invoking Section 21(5) of the Act.
3.2 Section 4(7)(d) of the Act deals with composition of tax. The said Section reads as under:
4(7)(d): Any dealer engaged in construction and selling of residential apartments, houses, buildings or commercial complexes may opt to pay tax by way of composition at the rate of 4% of twenty-five percent (25%) of the consideration received or receivable or the market value fixed for the purpose of stamp duty whichever is higher subject to such conditions as may be prescribed.'
Rule 17(4) of the APVAT Act Rules, 2017 ('the Rules', for brevity) prescribes the procedure enabling dealers, who are constructing apartments as builders and developers, to opt for composition of tax. Sub-rule 4(a) of the Rules stipulates that where a dealer executes a contract for construction and selling of residential apartments, houses, buildings, or commercial complexes, and opts to pay tax by way of composition under clause (d) of Sub-section (7) of Section 4 of the Act, he must register himself as a VAT dealer. Sub-clause 4(b) of Section 4 of the Act stipulates that before the commencement of the execution of the work, the VAT dealer shall notify the prescribed authority, on Form VAT 250, of his intention to avail composition for all works specified in clause (a) above, undertaken by him. As stated supra, the project was initially developed by M/s. Sri Chakra Eden Greens, Tirupathi, who is a registered dealer under the APVAT Act, and is an assessee on the rolls of the first respondent. The petitioner understands and believes that the said firm has opted for payment of tax under composition for the construction of all the 140 flats proposed to be built in Blocks 1 to 4. However, after completing Block 2 of 35 flats, the said firm expressed its inability to construct the balance flats and thereupon, the petitioner had stepped into the shoes of the said firm as a developer. It is not a new project, which has been developed by the petitioner company. It is only an ongoing work, which was left out by the original developer. As stated above, Rule 17(4)(b) of the Rules stipulates that the application for composition of tax in Form VAT 250 has to be applied by the said dealer before the commencement of the work. When the first developer has opted for composition, it is not open to the second developer, who has stepped into the shoes of the first developer, to file form VAT 250 afresh. The rule contemplates filing of Form VAT 250 before commencement of work. As the petitioner had stepped in after the commencement of the work, it is not open to the petitioner to file form VAT 250 afresh before the first respondent. The ratio in the decision in M/s. Sabir Dam Water Works, Kurnool, vs. Commercial tax Officer, Nandyal & others, W.P.no.32981 of 2017, dated 28.08.2018 , amply supports the case of the petitioner. Further, as the contract is an ongoing contract, the petitioner need not file form VAT 250 afresh. The petitioner also filed manually, Form VAT 250 at the time of obtaining the registration. At any rate, the petitioner is entitled for the benefit of concessional rate of tax of 5%. The 1st respondent requested the personnel of the petitioner company to visit their office along with the copies of the sale deeds for re-conciliation purposes. The petitioner also deputed its person to the office of the 1st respondent on various occasions. The sale deeds were reconciled with the information obtained by the 1st respondent periodically. The impugned order is barred by law of limitation as the law of limitation prescribes four-year period and not five-year period as the period of limitation. The period of limitation expired by 20.04.2018. The impugned order was passed on 06.05.2019. To get over the bar of limitation, Section 21(5) of the Act was invoked though there are no jurisdictional facts for invoking the said provision of law. Hence, the writ petition is filed.'