THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.18255 of 2011 Dated:25.07.2011 Between: M/s.M.V.Nagasekhar Naidu. .. Petitioner And The Asst.Commissioner (CT) Audit, Kurnool, And another. .. Respondents THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.18255 of 2011 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The order of the first respondent dated 05.05.2011, levying tax under the Andhra Pradesh Value Added Tax Act, 2005 (the Act, for brevity), is under challenge in this writ petition. The petitioner, who executed the works contract, is not a registered dealer under the Act. He submits that he applied for registration recently under the provisions of the Act. The petitioner contends that the second respondent is the territorial assessing authority and that the first respondent issued notice dated 09.02.2011 stating that the petitioner executed the works in the jurisdiction of the Executive Engineer, RWS & S(R) Division, Adoni, during the years 2009-2010 and 2010-2011 as per the reports furnished by the Executive Engineer. It was also observed that, during the year 2008- 2009, the petitioner had executed works of Rs.30,82,889/- and, as per Section 4(7)(a) of the Act read with Rule 17(1)(g) of the Andhra Pradesh Value Added Tax Rules, 2005, every dealer executing works contract shall pay tax on the value of the goods, at the time of incorporation of such goods in the works executed, at the rates applicable to the goods under the Act. Petitioner sought time and, accordingly, the first respondent issued another notice dated 18.03.2011 directing the petitioner to file objections on or before 30.04.2011. Petitioner contends that he filed objections, but without considering the same, the impugned order was passed by the first respondent. The petitioner also questions the jurisdiction of the assessing authority in assessing the petitioner to tax on the ground that he is not the jurisdictional assessing officer, to assess the petitioner to tax. Counsel for the petitioner submits that, after receiving the notice of assessment, the petitioner sent objections which were acknowledged by the first respondent on 02.05.2011, but the impugned order was passed without considering the same. In view of the order we propose to pass, we refrain from making any observations on this aspect. This Bench in Balaji Flour Mills v. the Commercial Tax Officer-II, Chittoor, Chittoor District[1] has considered the validity of the self same rule, as well as the question whether the authorization for audit given by the Deputy Commissioner under Rule 59(1)(7) of the Andhra Pradesh Value Added Tax Rules, 2005 (the Rules) read with Section 43 of the Act enables the Audit Officer to also undertake assessment for the relevant period. The question was answered in the negative. The conclusions in the judgment dated 30.12.2010 are as follows. (a) In the result, in the analysis and for the reasons as above, we reject the relief to declare Rule 59(1)(4)(ii)(b) and (d) of the VAT Rules as ultra vires. We also declare that sub- sections (3) and (4) of Section 17 do not suffer from any constitutional infirmity and are valid. We also reject all other prayers for declaring the impugned rule and impugned assessment orders as ultra vires or invalid except to the extent indicated in (b) and (c) below; (b) In view of our holding that the authorisation to audit under Section 43 read with Rule 59(1)(7) by itself does not enable audit officer to undertake assessment, we set aside all the assessment orders and consequential orders, if any under Section 53 of the VAT Act, in all the writ petitions; (c) All the impugned assessment orders shall stand remitted to the respective audit officers who shall submit audit reports as contemplated under Chapter VII of the VAT Audit Manual for appropriate Post Audit Action. If the competent controlling and/or supervising authority like Deputy Commissioner issues separate orders authorizing assessment, it shall be open to such authorizing officer or authority prescribed, as the case may be, to undertake assessment in accordance with law. Following the same, the impugned assessment order is set aside, and the writ petition stands disposed of without any order as to costs. _______________ (V.V.S. RAO, J) ____________________________ (RAMESH RANGANATHAN, J) 25.07.2011 vs [1] (2011) VST 40 150 (A.P.)