HYDERABAD ENGINEERING INDUSTRIES Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS is an appeal filed against the orders of the Deputy Commissioner (CT), Hyderabad Rural Division, Hyderabad, in proceedings RR. No. 24/96 -97 dated 31 -12 -1996 revising the orders of the Commercial Tax Officer, Ferozguda, in G.I. No. 3666/88/89/APGST dt. 12.3.1993. The appellant is a manufacturer and dealer of ceiling fans and was assessed on gross and net turnovers of Rs. 35,87,09,419.00 and Rs. 8,47,95,936.00 respectively. The appellant purchased Fans worth Rs. 2,42,70,677.00 from M/s. Minar Engineering Industries Limited and Electro Flame Ltd., Hyderabad and sold them for Rs. 4,43,52,670 which being second sales was claimed to be exempt and the claim was accepted by the C.T.O. The Deputy Commissioner found fault with such exemption as the quantum of the second sales was disproportionately high compared to the value of tax suffered purchases of Fans. Accordingly, he issued a show cause to the assessee and after hearing objections, carried out the revision. He restricted the exemption to a turnover of Rs. 2,91,24,813.00 arrived at by adding 20% gross profit to the local purchases as disclosed. Thus, the appellant lost exemption on secondary sales to a tune of Rs. 1,52,27,860. Therefore, it has filed the present appeal questioning the revision.

(2.) THE point to be considered is, whether the revising authority was justified in withdrawing exemption on a turnover of Rs. 1,52,27,860/ -?

(3.) COUNSEL for the appellant vehemently argued that the appellant had submitted various statements and invoices and other documents as can be seen even from the Deputy Commissioner's order itself there was compliance from the assessee and hence the proceedings may not be remanded once again to the Deputy Commissioner. The State Representative on the other hand, pointed out that the books and registers and documents which were called for were not submitted fully and under such circumstances, the Deputy Commissioner had no other alternative but to withdraw the exemption.