THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.5361 of 2011 ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) The proceedings of assessment of VAT, and levy of penalty and interest in Form VAT 305 dated 20.01.2011 issued by the 2nd respondent, is under challenge in this Writ Petition as illegal, without authority of law and in violation of principles of natural justice. The petitioner, a public limited company incorporated under the Companies Act, 1956, is engaged in Information Technological Services. It is a registered dealer under the A.P. VAT Act, 2005 and the CST Act, 1956. The main activity of the petitioner is to receive various designs, signals and symbols relating to technology from M/s. Apex Covantage, Virginia, USA through online for transformation into english software technological language, and retransfer it back to the foreign based company through online transmission. It is their case that what they have rendered are only services, and there is no sale of goods. The 2nd respondent visited the petitioner’s premises on 08.10.2010 and, thereafter, examined their records on 27.10.2010. On the basis of the audit and examination of records, a notice in Form VAT 305 was issued on 18.11.2005, proposing to levy tax of Rs.16,35,64,671/- for the tax period 2006-2007 to 2009-2010. The petitioner filed certain documents and their representation on 29.12.2010. The 2nd respondent, however, assessed the petitioner to tax by order of assessment dated 20.01.2011 levying tax of Rs.7,19,451/- along with interest and penalty. Aggrieved thereby, the present Writ Petition. The said order is under challenge, among others, on the ground that it is without jurisdiction, and the first respondent was merely authorized to carry out audit and not to assess the petitioner to tax under the provisions of the VAT Act. Sri P. Balaji Verma, Learned Standing Counsel for Commercial Taxes, would fairly state that the first respondent was merely authorized to conduct an audit, and not to assess the petitioner to tax. The Division bench of this Court, in M/s. Sri Balaji Flour Mills v. The Commercial Tax Officer-II, Chittoor, Chittor District[1] held that, in the absence of an authorisation to assess a dealer to tax, an audit officer was only entitled to carry out audit, and the assessment order passed by him without necessary authorization was beyond his jurisdiction. Following the said judgment, this Writ Petition is also allowed in terms thereof. The impugned order of assessment is set aside, and the matter is 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 the Deputy Commissioner, issues separate orders authorizing assessment, it shall be open to such authorized officer or authority prescribed, as the case may be, to undertake assessment in accordance with law. The Writ Petition is allowed to the extent indicated hereinabove. However, in the circumstances, without costs. _____________ V.V.S.RAO, J ___________________________ RAMESH RANGANATHAN, J 18.03.2011 MRKR [1] Judgment in W.P. Nos.855 of 2008 & batch, dated 31.12.2010