HONOURABLE SRI JUSTICE GODA RAGHURAM AND HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 21460 OF 2009 DATED 28TH OCTOBER, 2009. BETWEEN M/s. Blue Star Limited, No. 207, Sikh Road, Bantia Estate, Secunderabad, rep. By its Branch Manager Mr.V.Vijay Raghavan. …Petitioner and The Additional Commissioner (CT) Legal, AP, Hyderbad, and, ors. …Respondents. HONOURABLE SRI JUSTICE GODA RAGHURAM AND HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 21460 OF 2009. ORDER: (per RR.J.) Aggrieved by the order of the first respondent dated 18.09.2009 rejecting the petitioner’s application for stay pending disposal of the first appeal, the present Writ Petition is filed. The petitioner, a registered dealer on the rolls of the second respondent, has been executing central air conditioning contracts. For the assessment year 2007-2008, the third respondent issued notice dated 16.02.2009. On its receipt, the petitioner filed objections vide letter dated 02.03.2009. The third respondent thereafter assessed the petitioner to tax on the total turnover including the turnover relatable to the air conditioning works contracts. The third respondent relied on the judgments of the Supreme Court in Kone Elevator India Private Limited Vs. State of Tamil Nadu[1] and Hindustan Shipyard Limited Vs.State of A.P.[2] to hold that these transactions were sales and did not fall within the ambit of work contracts. Earlier when the petitioner’s application for stay was rejected by the second respondent, they had invoked the jurisdiction of this Court filing Writ Petition No.18393 of 2009. This Court by order dated 03-09-2009, while disposing of the said Writ Petition, directed the respondents not to take coercive steps including issuance of a garnishee order to the bank pending disposal of the revision by the first respondent. The second respondent therein i.e. third respondent herein, was further directed not to encash the cheque, if any, issued by the bank pursuant to the garnishee notice issued by the third respondent-assessing authority on 28.08.2009 till disposal of the revision petition and for a period of one week from the date of communication of the revisional order to the petitioner. This Court also directed the petitioner not to withdraw Rs.4,61,38,713/- from its account in HSBC bank. Sri R.L.Ramani, learned Senior Counsel appearing for the petitioner, submits that, despite the order of this Court dated 03.09.2009 being communicated to the third respondent on the very same day, the third respondent had encashed the cheque for Rs.4,61,38,713/- on 05.09.2009. The learned Senior Counsel, while stating that the action of the third respondent, in withdrawing the said amount amounted to a deliberate and wilful violation of the earlier order of this Court, would submit that it would suffice if this Court were to direct the third respondent to adjust the said sum recovered from the petitioner towards future monthly tax liabilities. According to the learned Senior Counsel, the nature of transactions entered into between the petitioner and its customers in execution of the air conditioning works contracts included design, supply, installation, testing, erection and commissioning of the air conditioning systems and that these were work contracts and not sale of air conditioning systems. He relies on several judgments of the Madras High Court in this regard. He further submits that, on identical facts, the Supreme Court and the Madras High Court had held that these type of transactions were not sales. While the petitioner has an arguable case on merits, as the appeal preferred by the petitioner is pending before the first respondent, we do not consider it appropriate to examine the contentions advanced by the learned Senior Counsel on merits. Ends of justice would be met if the petitioner is directed to deposit 1/3rd of the disputed tax of Rs.5,27,29,958/- to the credit of the third respondent pending disposal of the appeal by the second respondent, after taking credit for the amount, if any, already paid towards pre-deposit for filing the appeal. Since the third respondent has already encashed the cheque for Rs.4,61,38,713/- constituting the balance disputed tax in its entirety, the balance disputed tax, after adjusting the amounts aforementioned shall be adjusted against the petitioner’s monthly tax liabilities. The Writ Petition is allowed after hearing Sri C.L.Ramani, learned Senior Counsel appearing for the petitioner and Sri P.Balaji Varma, learned Government Pleader for Commercial Tax appearing for the respondents. No costs. ------------------------------ JUSTICE GODA RAGHURAM ------------------------------------ JUSTICE RAMESH RANGANATHAN Dated 28th October, 2009. Msnr. [1] 2008 INDLAW SC 1341 [2] 119 STC 533 SC