THE HON'BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION No.21076 of 2011 Date:08.08.2011 Between: M/s. PSL Ltd., Visakhapatnam ..Petitioner And Assistant Commissioner (CT)s, Visakhapatnam and others ..Respondents THE HON'BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE ASHUTOSH MOHUNTA WRIT PETITION No.21076 of 2011 ORDER: This writ petition is directed against the order dated 18.03.2011 passed by the Joint Commissioner (CT) Legal, Hyderabad – the third respondent herein, rejecting the stay application of the petitioner. The petitioner is a manufacturer of spirally welded gunited pipes and a dealer on the rolls of the first respondent under the provisions of the Andhra Pradesh Value Added Tax Act, 2005 (for short ‘the Act’). As one of its business activities, the petitioner does cement mortar lining for Mild Steel (MS) pipes. The cement mortar lining (internal and external) is done basically to protect the steel from corrosion. For the assessment year 2006-07, the petitioner was issued a notice in Form VAT 305 A, dated 16.12.2009 by the first respondent proposing to tax the goods – MS pipes at 12.5% and since the petitioner opted for the composition scheme under the Act, a notice was also issued proposing to levy tax at 12.5% on the turnover of goods purchased from outside the State and used in execution of the work contracts, in terms of Section 4(7)(e) of the Act. Despite the petitioner’s reply on 01.01.2010 to the first respondent’s notice, the first respondent passed an order of assessment in Form VAT 305, dated 15.05.2010 confirming the proposals to assess the goods on the turnover, at 12.5%. Aggrieved thereby, the petitioner filed an appeal along with a stay application before the second respondent on 29.06.2010. The second respondent dismissed the appeal on 18.08.2010. Aggrieved by the rejection of the appeal, the petitioner preferred a further appeal to Sales Tax Appellate Tribunal (STAT) and independently preferred a revision before the third respondent seeking stay of collection of the disputed tax pending the appeal before STAT. This revision was rejected by the third respondent, vide impugned order dated 18.03.2011. The third respondent, while rejecting the revision and declining grant of stay, recorded concurrence with the reasons recorded by the assessing authority, which described the manufacturing process in the following words: “On manufacture of spirally welded MS pipes with H.R. Coil the anti-corrosion coating is provided and then the pipes are gunited with a mixture of sand, cement around a wire mesh provided over the preliminary form of MS. Pipes. Thus a concrete reinforcement with the support of a wiremesh around the pipe is provided by a way of guniting. Thus the process of guniting is not a simple coating with anti-corrosive materials. With the process of guniting, the spirally welded M.S Pipes which are called as “Cement Gunited spirally welded pipes” are different from mere M.S. Pipes with or without anti- corrosive coating. Therefore, these goods cannot be classified as M.S. Pipes liable to tax @ 4% and are liable tax @ 12.5% as the goods fall under the Schedule V appended to the APVAT Act, 2005.” The third respondent held that gunited pipes are different from M.S. pipes and cannot be categorized as pipes and there is no infirmity either in the order of the primary authority assessing the petitioner to tax nor in the appellate order dismissed the appeal; and therefore, stay is declined. The order impugned is an order of the third respondent in an interlocutory proceeding pending consideration of the appeal by STAT and in exercise of its discretion. The learned counsel for the petitioner advanced strenuous arguments contending that on a clear and fair interpretation of the relevant entry, the goods fall to be classified as pipes, and cannot be taxed under Schedule V, merely on the ground that some additional work is done on those pipes; and therefore the order of the third respondent - the revisional authority is perverse. We are not inclined to consider the aspects on the merits of the findings of the primary and appellate authorities as to the classification, since that would denude the STAT before which the further appeal by the petitioner is pending of effective jurisdiction to decide the appeal on merits. Suffice it to record that we do not find any perversity in the exercise of discretion by the third respondent in passing the impugned order, warranting interference in this writ petition. For the aforesaid reasons, the Writ Petition is devoid of merits and is dismissed at the stage of admission. There shall, however, be no order as to costs. ___________________ GODA RAGHURAM, J ______________________ ASHUTOSH MOHUNTA, J 08th August, 2011 GHN