THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN W.P.NO.23894 of 2009 06-11-2009 BETWEEN; M/s.Venkatesh Industries, rep. By its proprietrix S.Savitri ...Petitioner vs. The Assistant Commissioner(CT) Warangal Division and two others ...Respondents THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN W.P.NOs.23894 of 2009 ORAL ORDER: (Per RR,J) The petitioner, a registered dealer on the rolls of the 1s respondent, claims to be executing job works of pressing and ginning o cotton lint, and to have merely received job work charges from the customers. The 1st respondent, while finalizing the assessment for th year 2004-05 under the A.P.G.S.T. Act,1957 (for short “the Act”), allowe exemption on receipts relating to ginning, pressing and driage charge holding that there was no transfer of property. The 2nd respondent, in exercise of his powers under Section 20(2 of the Act, proposed to revise the assessment order, levying tax on jo work receipts treating them as works contract under Section 5-F of the Ac In the show cause notice dated 29.11.2008 the 2nd respondent propose to levy tax at 8% on a turnover of Rs.55,63,374/- after deducting 30% towards labour charges. The net turnover subjected to tax under Section 5-F of the Act, after deducting 30% towards labour charges, wa Rs.38,94,362/-. In addition thereto, the 2nd respondent proposed to levy ta on a turnover of Rs.26,22,966/- representing loss of weight of 1268.2 quintals during drying of cotton. The petitioner filed their objections dated 31-12-2008 contendin that cotton brought by customers was fed into the ginning machine whic separated seed from cotton fibre resulting in the yield of lint and cotto seed, that the charges received, towards the job work of ginning cotton was not a works contract and was not liable to tax under Section 5-F of th Act as no transfer of property was involved in such transactions. Wit regards levy of tax on pressing charges, the petitioner contended that the had paid tax on the entire material used for pressing and that the gre fabric used in the works was not liable to tax as it was covered under th Fourth schedule to the Act. With regards driage/shortage, the petitione contended that cotton was not reduced or deducted from the raw materia account and that only the quantity lost in driage, and removal of othe waste material sticking to the cotton fibre, alone was considered. The relied on the orders of the Tribunal in Jagadguru Cotton Industries (3 APSTJ 200) and Srinivasa Industries (13 APSTJ 31). The 1st respondent passed order dated 30-04-2003 raising demand of Rs.4,25,753/-. Aggrieved thereby, the petitioner preferred a appeal to the Sales Tax Appellate Tribunal (STAT), Hyderabad i T.A.No.399 of 2009 and claims to have paid 25% of the disputed tax a pre-deposit. The petitioner filed an application before the 3rd responden seeking stay of collection of the balance disputed tax. The 3rd responden by order dated 29.09.2009, dismissed the stay petition and, thereafter, th 1st respondent issued notice dated 09.10.2009 demanding payment of th balance disputed tax. Aggrieved thereby, the present writ petition. Sri S.Dwarakanath, learned counsel for the petitioner, would subm that the petitioner merely executes job works and that it is the customer who bring cotton for ginning and thereafter take the ginned cotton bac with them. Learned counsel would submit that, since the petitioner doe not purchase cotton, even if it were to be held that they execute work contracts, cotton, not used by them in the alleged works contract, canno be subjected to tax in their hands. Learned counsel would submit that th job work carried on by the petitioner had merely resulted in receipt o labour charges and that no tax can be levied thereupon. The petitioner has an arguable case on merits in the appeal filed b them before the STAT. Their contention that, since cotton ginned and drie by them was not their purchases and was brought by customers only fo the purpose of ginning, its cost cannot be included in their turnover and b subjected to tax cannot be said to be without merit. We do not, howeve propose to record any finding on this aspect since the appeal preferred b them is pending adjudication before the STAT. Ends of justice would b met if, pending disposal of the appeal before the STAT, the respondent are directed not to take any coercive steps for recovery of the disputed ta subject to the condition that the petitioner deposits 50% of the disputed ta within a period of four(4) weeks from today. Amount, if any, already paid b the petitioner towards the disputed tax shall be given credit to. The writ petition is, accordingly, disposed of at the stage of admissio after hearing Sri S.Dwarakanath, learned counsel for the petitioner, and S P.Balaji Varma, learned special standing counsel for commercial taxes No costs. ______________ GODA RAGHURAM,J __________________ RAMESH RANGANATHAN,J 6th NOVEMBER 2009. TSNR