THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN W.P. 29191 of 2009 Dated. 18–01-2010 Between: M/s. Ramadevi Construction Company, M.V.P. Colony, Visakhapatnam, Rep., by its Managing Partner, Mr. Y. Dhanunjaya Rao. …Petitioner Vs. The Commercial Tax Officer, China Waltair Circle, Visakhapatnam and others. …Respondent THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN W.P. 29191 of 2009 Oral order: (Per THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN The petitioner, a registered dealer engaged in execution of ‘works contracts’ under the provisions of the Andhra Pradesh General Sales Tax Act, 1957 (for short ‘the Act’) on the rolls of the 1st respondent, was subjected to tax for the assessment year 2004-05 by the 1st respondent by order dated 28-04-2006 and their net turnover was determined as Rs.1,41,55,296-00. The assessment order was revised by the 2nd respondent on 11-05-2009 on the ground that the quantum of deductions permitted by the 1st respondent was not correct. The 2nd respondent held that the petitioner was entitled only for deduction of Rs.1.48 crores as against Rs.2.02 crores granted by the 1st respondent. The deductions claimed by the petitioner under various heads was disallowed by the 2nd respondent. Aggrieved thereby the petitioner preferred an appeal to the Sales Tax Appellate Tribunal, Additional Bench at Visakhapatnam on 13-07-2009 which appeal is said to be pending as on date. The petitioner approached the 3rd respondent seeking stay of recovery of the disputed tax of Rs.4,34,870-00 pending disposal of the appeal by the Sales Tax Appellate Tribunal. The 3rd respondent, by order dated 13-11-2009, held that the petitioner was eligible for exemption only for those expenses directly related to labour and other related expenses under Rule 6 (2) of the Andhra Pradesh General Sales Tax Rules, 1957 (for short ‘the Rules’) and was not eligible for exemption on those expenses which were not mentioned in Rule 6 (2) of the Rules. The stay petition filed by the petitioner was rejected. Aggrieved thereby the present writ petition. Smt. K. Uma, learned counsel for the petitioner, would contend that under Section 2 (1)(s) of the Act ‘turnover’ excludes the tax component; that under Rule 6 (2) of the Rules among the expenses for which the petitioner was entitled for exemption included under clause (f) the cost of establishment of the contractor to the extent it was relatable to supply of labour and services and under clause (g) other similar expenses relatable to supply of labour and services and as such the expenses incurred by the petitioner towards salary, vehicle maintenance, staff welfare, provident fund etc., were liable to be exempted as ‘eligible expenditure’ under Rule 6 (2) of the Rules. While this submission of the learned counsel for the petitioner cannot be said to be without merit, we do not propose to examine these contentions on merits since the substantive appeal is pending adjudication before the Sales Tax Appellate Tribunal. Suffice it to direct the respondents not to take coercive steps for recovery of the disputed tax pending disposal of the appeal by the Sales Tax Appellate Tribunal, on condition that the petitioner deposits 50% (fifty per cent) of the disputed tax with the 1st respondent within a period of four (4) weeks from today. The amount, if any already paid towards the disputed tax, shall be given credit to. The writ petition is disposed of accordingly after hearing both Smt. K. Uma, the learned counsel for the petitioner and Sri A.V. Kishna Kaundinya, the learned special Standing Counsel for Commercial Taxes. No costs. JUSTICE GODA RAGHURAM JUSTICE RAMESH RANGANATHAN Dated: 18-01-2010 Pvks/* Nb: Furnish c.c. in two days. B/o pvks/*