IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE FOURTEENTH DAY OF AUGUST TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE P.V.SANJAY KUMAR WRIT PETITION NO : 17811 of 2008 Between: 1 M/s M.Buthchaiah & Company, Flat No.505, Yaganti Court, 2nd line, Rajendra nagar, Guntur, Guntur District, rep by its Managing partner Sri M.Butchaiah. 2 V.Jayaram, S/o. Parthasarathi, R/o. Chinaravuru, Tenali, Guntur District. 3 M.Murahari, S/o. Ramamurthy, R/o. Balakrispuram, Bapatla, Guntur District. ..... PETITIONERS AND 1 The Government of Andhra Pradesh, Rep by its Principal Secretary, Finance(Works & Projects) Department, Secretariat Buildings, Hyderabad. 2 The Engineer-in Chief(R&B), Administration & Roads, Erramanjil, Hyderabad. 3 The Superintendent Engineer(R&B), Guntur Guntur District. 4 The Executive Engineer(R&B), Guntur, Guntur District, 5 The Executive Engineer(R&B), Tenali, Guntur District, 6 The Superintendent Engineer, Panchayatraj Circle, Guntur, Guntur District. 7 The Executive Engineer, Panchayatraj Division, Guntur, Guntur District. 8 The Executive Engineer, panchayatraj Division, Tenali, Guntur District. 9 The Superintendent Engineer (R&B Circle), Ongole, Prakasam District. 10 The Executive Engineer(R&B Division), Ongole, Prakasam District. 11 The Pay and Accounts Officer (W&P), Guntur, Guntur District. 12 The Pay and Accounts Officer(W&P), Ongole, Prakasam District. 13 The Assistant Commissioner(CT), Guntur, Guntur District. 14 The Assistant Commissioner(CT), Ongole, Prakasam District. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Aﬃdavit ﬁled herein the High Court will be pleased to issue an appropriate writ, order or direction more particularly one in the nature of writ of mandamus, (i) Declaring that the Memo No.602/F8(1)/2006 dated 14-3-2007 issued by the 1st respondent is arbitrary, illegal and contrary to the provisions of A.P.Value Added Tax Act and Rules made there under; (ii) The Petitioners are entitled for addition of VAT component of 4% on the entire value of work done at the time of payment of each bill in terms of G.O.Ms.No.11 dated 29-07-2005 and G.O.Ms.No.141 dated 27-07-2006 and Section 22(3) of the A.P.VAT Act, (iii) Declaring the action of the respondents in adding only 1.45 at the time of payment of each bill i.e. less than 4% as arbitrary and illegal contrary to the provisions of the Act; and (iv) Direct the respondents to pay the diﬀerence of 2.6% amount on the total value of the work relating to the agreements entered into between the petitioners and the respondents 2 to 9. Counsel for the Petitioner:MR.PRABHU NATH VASIREDDY Counsel for the Respondents : SRI K. RAJI REDDY (SPL. STANDING COUNSEL FOR COMMERCIAL TAX); GP FOR FINANCE & PLANNING, GP FOR ROADS & BUILDINGS, & GP FOR PANCHAYATRAJ & RURAL DEVELOPMENT. The Court made the following : . THE HON'BLE SMT JUSTICE T.MEENA KUMARI & THE HON'BLE SRI JUSTICE P.V. SANJAY KUMAR WRIT PETITION NO : 17811 of 2008 ORDER: (Per Hon’ble Smt. Justice T. Meena Kumari) The writ petition is ﬁled seeking to declare that (1) the Memo No.602/F8(1)/2006 dated 14-3-2007 issued by the 1st respondent, as arbitrary, illegal and contrary to the provisions of A.P. Value Added Tax Act and Rules made there under; (2) the Petitioners are entitled for addition of VAT component of 4% on the entire value of work done at the time of payment of each bill in terms of G.O.Ms.No.11 dated 29.07.2005 and G.O.Ms.No.141 dated 27-07-2006 and Section 22(3) of the A.P.VAT Act, (3) the action of the respondents in adding only 1.4% at the time of payment of each bill i.e. less than 4% as arbitrary and illegal and (4) to direct the respondents to pay the difference of 2.6% amount on the total value of the work relating to the agreements entered into between the petitioners and respondents 2 to 9. The petitioners are registered dealers under the A.P. Value Added Tax Act, 2005 and they are the assessees on the rolls of the Commercial Tax Department. The petitioners are carrying on the business in execution of work contracts. It is submitted by the learned Counsel for the petitioners that the petitioners have already paid 1.4% on the total value to the department and hence, they are entitled for refund of 4% on total value from the respondents. But however, the learned Government Pleader and also the learned Counsel for the petitioners further submit that the balance of 1.4% has already been paid and they are entitled for refund from the respondents. The learned Government Pleader submits that the petitioners have paid 4% in total. Heard the learned Counsel for the petitioners, the learned Government Pleader for Finance and Planning, Special Standing Counsel for Commercial Taxes and the learned Government Pleader for Roads and Buildings. In view of the facts and circumstances of the case and also recording the submissions made by the learned Counsel for the petitioner and the learned Government Pleader, the Writ Petition is allowed. However, there shall be a direction to the respondents not to remit any further amount to the Commercial Tax Department in respect of the deductions already made pursuant to the Memo dated 14.3.2007 of the 1st respondent, while processing the final bill. The Writ Petition is allowed accordingly. No costs. ________________________ Justice T. Meena Kumari _________________________ Justice P.V. Sanjay Kumar Date: 14th August, 2008 nn/gurc. THE HON'BLE SMT JUSTICE T.MEENA KUMARI and THE HON'BLE SRI JUSTICE P.V. SANJAY KUMAR WRIT PETITION NO : 17811 of 2008 (Order delivered by the Hon’ble Smt. Justice T. Meena Kumari) 14/08/2008