THE HON’BLE SRI JUSTICE D.S.R.VARMA AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA Writ Petition No.15849 of 2010 Date: 23-8-2010 Between M/s. C.S.R. Constructions, Rep. by its Managing Partner Challa Srinivasa Rao, Hyderabad … Petitioner and The Commercial Tax Officer, Srinagar Colony Circle, Hyderabad and 2 others … Respondents THE HON’BLE SRI JUSTICE D.S.R.VARMA AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA Writ Petition No.15849 of 2010 Oral Order: (per D.S.R.Varma, J.) Heard Dr. M.V.K. Moorthy, learned counsel, representing Sri M.V.J.K. Kumar, learned counsel for the petitioner and the learned Special Government Pleader for Taxes for the respondents 1 and 2. 2. The writ petition is filed for the following relief: “ … … … this Hon’ble Court may be pleased to issue an appropriate writ, order or direction particularly in the nature of Writ of Mandamus declaring the action of the 2nd Respondent in levying tax @ 8% on a turnover of Rs.1,20,57,999/- for the assessment year 2004-05 for second time inspite of the payment of tax by the 3rd Respondent relying upon the last proviso to Section 5F of the APGST Act, ’57 as illegal, arbitrary, unjust, violative of Article 14, 265 and also contrary to the law laid down by this Hon’ble Court reported in 43 APSTJ 50, 77, 32 APSTJ 73 as also the judgment of the Hon’ble apex court reported in 2007 (10) VST p.216 and consequently to set aside the order of the 2nd Respondent dated 17-05-2010 in R.R.No.2/09-10 and direct the Respondent to give credit to the amounts already paid and pass orders accordingly and grant such other relief or reliefs as are deemed to be fit and proper in the circumstances of the case.” 3. The facts, in nutshell, are that the petitioner is the Sub Contractor and the 3rd respondent is the Principal Contractor. Tax is to be deducted at source as postulated under sub-section (1) of Section 5-H of the Andhra Pradesh General Sales Tax Act, 1957 (‘APGST Act’ for brevity). 4. It is the contention of the learned counsel for the petitioner that as per the last proviso of Section 5-F of the APGST Act, no tax shall be payable on the turnover relating to the amounts paid to a Sub Contractor as consideration of the works done either partly or otherwise, however, subject to the condition that the said Sub Contractor shall be a registered dealer. 5. In other words, if the Sub Contractor is a registered dealer, no tax shall be payable by the said Principal Contractor on the turnover relating to the amounts paid to the Sub Contractor. 6. In the present case, the petitioner is a Sub Contractor and therefore, it is the contention of the learned counsel for the petitioner that no tax ought to have been collected from the Principal Contractor or even if any such tax is collected from the Principal Contractor by virtue of the operation of law, as provided under the last proviso of Section 5-F of the APGST Act, the amount so collected from the Principal Contractor is liable to be refunded/credited to the account of the Sub Contractor. 7. By virtue of the impugned order dated 17-5-2010, the 2nd respondent had reasoned that under the Tax Laws, the point of levy cannot be shifted to wrong point unless provided by law and hence the assessee cannot claim any exemption on the ground that the main Contractor paid the tax. Irrespective of whether the main Contractor paid the tax or not, the registered Sub Contractor under the APGST Act is liable for tax. 8. The learned counsel for the petitioner assails the said opinion expressed by the 2nd respondent while fixing the tax liability on the petitioner for the year 2004-05 under the APGST Act. 9. The learned counsel for the petitioner further pressed into service some material relating to the collections of tax by the 3rd respondent, who is the Principal Contractor, in order to demonstrate that in the returns, he apportioned tax payable by him for himself and also on behalf of the Sub Contractors including the petitioner. 10. Therefore, it is contended by the learned counsel for the petitioner that when once the tax has been deducted at source from the Principal Contractor, no such liability can be fastened against the petitioner again, as envisaged under the proviso to Section 5-F of the APGST Act. 11. In addition to this, basing on the same provision the petitioner also seeks the relief of refund of the said amount so collected from the 3rd respondent to the credit of the account of the petitioner. 12. In our view, there are certain basic facts, which are to be essentially gone into – firstly; as regards the tax paid by the Principal Contractor, secondly; regarding the liability of the petitioner, who also is an assessee to pay tax, and thirdly; whether the petitioner can claim refund of the amount of tax so collected at source from the 3rd respondent to his credit on the ground that the petitioner is a registered dealer and therefore, he is exempted. In other words, when the registered dealer is exempted from paying tax, no tax can be collected even from the Principal Employer. 13. This contention is, in our view, worth to go into. But, as could be seen from the provisions of the APGST Act, the orders of the 2nd respondent are amenable for appellate jurisdiction, as envisaged under Section 21 of the APGST Act before the appellate Tribunal. 14. It is also not in dispute that the petitioner can also seek stay of further proceedings pursuant to the impugned order dated 17-5-2010 passed by the 2nd respondent. 15. Therefore, having regard to the facts and circumstances, instead of this Court taking upon itself the said exercise, we are of the view that it is expedient for the petitioner to approach the appellate Tribunal, as provided under law, and seek appropriate redressal pressing into service all the material available with him, and upon such appeal being filed, the appellate Tribunal, needless to mention, shall dispose of the same by deciding all the questions of fact and law as well, as contended by the petitioner. 16. It is the further grievance of the petitioner that if no stay of the further proceedings is granted, he is under the threat of garnishee proceedings. 17. In fact, it is the contention of the learned counsel for the petitioner that writ petition is the only appropriate and efficacious remedy, inasmuch as, the 3rd respondent cannot be added as a party before the appellate Tribunal. 18. This contention cannot also be sustained, for the reason that the learned counsel for the petitioner is assertive on facts placing heavy reliance on the material pressed into service before this Court. In such a case, the same material, as has been produced before this Court, can as well be relied on and the appellate Tribunal always would be at an obligation to look into the entire material as placed by the petitioner and pass appropriate orders in accordance with law. 19. With the above observations, the petitioner is permitted to prefer an appeal before the appropriate authority within two weeks from today and also file an application seeking stay of the further proceedings pursuant to the impugned order dated 17-5-2010 passed by the 2nd respondent in another week thereafter. 20. Pending disposal of consideration of the said stay application as and when filed, there shall be stay of further proceedings pursuant to the impugned order dated 17-5-2010 passed by the 2nd respondent. 21. Subject to the above observations and directions, the writ petition is disposed of, at the stage of admission. Parties to bear their costs. _________________________ JUSTICE D.S.R.VARMA _________________________ JUSTICE B.N.RAO NALLA 23rd August, 2010. Note:- Furnish copy in three days. (B/o) Ak THE HON’BLE SRI JUSTICE D.S.R.VARMA AND THE HON’BLE SRI JUSTICE B.N.RAO NALLA Writ Petition No.15849 of 2010 (Order of the Division Bench delivered by DSRV, J.) 23rd August, 2010. (Ak)