THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.11078 OF 2011 Date:27.04.2011 Between: M/s.Galaxy Auto Axle Private Limited, Gat No.323, Ambap Crossing, Vathur Turf, Vadgaon, Hatkanagale Tahasil, Kolhapur District, Maharastra State, represented by its Authorized Representative, Deepak Kadam, Aged 26 years S/o.Sri Sh.Sambhaji Kadam, Private Services, R/o.Kolhapur, Maharastra State .. Petitioner AND Assistant Commissioner (CT) (int) LTU, No.II Division, Viayawada, D.No.74-15-1, Yenamalakuduru Road, Krishna Nagar, Vijayawada, Krishna District and another .. Respondent THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.11078 OF 2011 ORDER: (Per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a registered dealer under the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act, for brevity) on the rolls of the first respondent. They are also dealers under the Central Sales Tax Act, 1956 (the CST Act, for brevity). Among others, they manufacture Axles and Shafts for motor vehicles. Under Section 14 of the CST Act, these are chargeable to tax at 4% as ‘declared goods’. Entry 70(xiii) of IV Schedule to VAT Act deals with “wheels, tyres, axies and wheel sets”. There was some controversy with regard to the question whether Entry 70(xiii) of IV Schedule to VAT Act also covers axles and shafts at 4% or they are to be taxed under the residuary entry under V Schedule thereto. The matter was considered by the Advance Ruling Authority (ARA) under Section 67 of the VAT Act. By their Ruling dated 27.05.2008, the ARA held that axle shafts meant for motor vehicles other than tractor fall under residuary entry of V Schedule to the VAT Act liable to tax at 12.5% (now 14.5%). It appears, this was applied to the assessment of the petitioner, and they were taxed at the rate of 12.5%. Aggrieved by the assessment order, the petitioner preferred an appeal before the second respondent. Pending the same, he invoked the departmental remedies seeking stay of collection of tax, in vain, and ultimately this Court in a series of orders stayed the collection of tax on certain conditions. As the basis for the assessment order is the Ruling of the ARA, the petitioner and two others sought a review of the Ruling. By proceedings/order being A.R.Com/49/2007 dated 24.11.2010, the ARA held that axles shafts made of iron and steel and sold in the same form are liable to tax as declared goods at 4% under Entry 70(xiii) of the VAT Act. About four months thereafter the Appellate Deputy Commissioner - the second respondent herein - passed an order in the petitioner’s appeal negativing their contentions. This is assailed in the present writ petition. The counsel for the petitioner submits that, as per the latest Ruling of the ARA, axles shafts are to be taxed at 4% under the Entry 70(xiii); inspite of bringing to the notice of the Appellate Deputy Commissioner, the Ruling was ignored which is binding on him; and, therefore, the impugned order is vitiated by illegality. As the issue is in a narrow compass, we directed the Special Counsel for Commercial Taxes to get instructions in the matter. He obtained instructions. He would submit that when the second respondent considered the appeal, the Ruling of the ARA was not placed before him and, therefore, he had proceeded on the basis of the earlier Ruling dated 27.05.2008 of the ARA. We have carefully perused the impugned order. We are, prima facie, convinced that the Ruling of the ARA on the review application filed by the petitioner and two others was not placed before the second respondent. But, for this, the order would have been different. In so far as this contention is concerned, we are inclined to accept the submission made on behalf of the petitioner. In this background, we deem it appropriate to set aside the impugned order and remit the matter to the second respondent to consider the appeal filed by the petitioner in the light of the Ruling of the ARA in A.R.Com/49/2007 dated 24.11.2010. This exercise may be completed within a period of four weeks from the date of receipt of a copy of this order. The writ petition shall stand disposed of accordingly. There shall be no order as to costs. _______________ (V.V.S.RAO, J) ______________________________ (RAMESH RANGANATHAN, J) 27.04.2011 KH