THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.27560 OF 2007 and WRIT PETITION No.3789, 3790 and 9239 of 2008 Date:28.03.2011 Between: M/s.Ganesh Transporters, 64-9-14, Patamatalanka, Vijayawada, Krishna District, represented by its Proprietor Sri V.Chakradhara Rao, S/o.V.Subba Rao, Aged about 72 years and another .. Petitioners And The Government of Andhra Pradesh, represented by its Special Chief Secretary, Revenue Department, Secretariat Buildings, Hyderabad and others .. Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.27560 OF 2007 and WRIT PETITION No.3789, 3790 and 9239 of 2008 COMMON ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The common issue for consideration of this Court, though the factual background is little at variance, compels this Court to dispose of these matters by a common order. W.P.No.27560 of 2007 is filed against a show cause notice issued in Form 305-A, dated 30.08.2007 proposing to tax the lease amounts the petitioner received for leasing out oil tankers to M/s.Reliance Logistics Private Limited (RLL). The other three writ petitions are filed assailing the Value Added Tax (VAT) assessment orders in Form 305. Be it noted that in all the matters the petitioners, who are engaged in the business of transportation of petroleum products, such as highspeed diesel and petrol etc., entered into agreements with RLL for transporting petroleum products to various destinations as per the schedule given by RLL. The jurisdictional VAT assessing authority assessed the petitioners, who are the dealers on the rolls of the assessing authorities, treating the lease rentals under Section 4(8) of the Andhra Pradesh Value Added Tax Act, 2005 (the Act, for brevity). Be it noted, under Explanation IV to Section 2(28) read with Section 4(8) of the Act, the transfer of the right to use goods is a deemed sale and the total amount realized from such transfer of the right to use goods is chargeable to VAT. In all the matters, the petitioners would contend – the submission is reiterated by the learned counsel for the petitioners – that the agreements of sale between the petitioners and RLL was entered into at Mumbai and, therefore, the situs of sale being in Maharastra, the transaction is not chargeable to VAT. They would rely on 20th Century Finance Corporation Limited v. State of Maharastra[1] a n d Bharat Sanchar Nigam Limited v. Union of India[2]. The counsel for the petitioners also brought to our notice our order in an unreported judgment in M/s.Siri Transport v. the Government of Andhra Pradesh[3]. The Special Counsel for Commercial Taxes does not dispute the order passed by us. It is now settled that insofar as a deemed sale, as defined in Explanation IV to Section 2(28) of the Act, is concerned among others the place where the agreement is entered into between the lessor and lessee assumes importance while inferring a deemed sale from the transfer of the right to use goods. If the situs of such sale is not within the jurisdiction of the assessing authority, the agreement having been entered elsewhere outside Andhra Pradesh, the transaction is not chargeable to VAT in Andhra Pradesh. A perusal of the assessment order would show that the petitioners appear to have neither raised a similar objection nor had the assessing officer dealt with the same. Even if it is raised, it appears this aspect of the matter was not considered by the assessing officer. For this reason, we are inclined to remit the matters to the respective assessing officers to consider the issue of situs of sale with reference to the agreements. The petitioners are given liberty to produce copies of the agreements if not already produced. In W.P.No.27560 of 2007 the petitioners shall submit their objections, if not already submitted, within a period of two weeks from the date of receipt of this order and the same shall be considered by the concerned officer. In the result, these writ petitions are allowed and the matters are remanded to the concerned Commercial Tax Officers, who shall issue notice to the petitioners and decide the matters. It shall be open to the petitioners to specifically raise such an issue if not already raised and produce material in proof of their allegations that the situs of sale is at Mumbai. There shall be no order as to costs. ________________ (V.V.S. RAO, J) _____________________________ RAMESH RANGANATHAN, J 28.03.2011 KH [1] 2000 (6) SCC 12 : (2000) 119 STC 182 [2] (2006) 3 SCC 1 : (2006) 145 STC 91 [3] W.P.No.9278 of 2008, Dated 16.03.2011