IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT HON'BLE MR JUSTICE GODA RAGHURAM AND HON’BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO. 25294 OF 2009 Between: M/s Royal Developers ..... petitioner AND The Additional Commissioner (CT) Legal, O/o Commissioner of Commercial Taxes Hyderabad and three others .....RESPONDENTS ORDER: (per Sri RAMESH RANGANATHAN) The petitioner, a partnership firm engaged in construction of building/apartments, is a registered dealer on the rolls of 4th respondent. They opted to pay tax in terms of Section 4(7) (d) of the APVAT Act, 2005. For the tax period 2007-08 and 2008-09, the petitioner executed works relating to construction of buildings/apartments. They claim to have paid tax at 1% in terms of Section 4(7)(d) of the APVAT Act and, thereafter, to have filed the necessary declaration before the 4th respondent. The third respondent conducted an audit of the petitioner’s records and issued show cause notice proposing to levy tax at 4%, under Section 4(7) ( C ) of the APVAT Act, on the ground that the petitioner had merely constructed and was not selling the apartments constructed by them. The petitioner replied contending that they were not liable to pay tax. The third respondent, however, passed assessment order dated 24.3.2009 holding the petitioner liable to pay tax at 4%. Aggrieved thereby the petitioner preferred an appeal before the second respondent who, by his order dated 26.5.2009, dismissed the appeal. Aggrieved by the said order the petitioner preferred an appeal to the Sales Tax Appellate Tribunal, Visakhapatnam Bench and filed a petition before the first respondent seeking stay of collection of the disputed tax pending disposal of the appeal by the Tribunal. The first respondent rejected the stay petition filed by the petitioner holding that Section 4(7) (d) of the APVAT Act was not attracted as the petitioner was selling flats as a power of attorney holder and not by themselves; Section 4(7)(d) require both construction and sale of flats to be carried on, and the petitioner was liable to pay tax under Section 4(7)© and not under Section 4(7)(d) of the APVAT Act. Sri B. Srinivas, learned counsel for the petitioner, would contend that, as sale of flats was sale of immovable property, the provisions of the A.P. VAT Act were not attracted despite which the petitioner, with a view to avoid any dispute, had chosen to pay tax at 1% though they were not liable to pay any tax whatsoever under the APVAT Act. Learned counsel would further submit that the petitioner has also paid 50% of the disputed tax. The aforesaid contentions raised by the learned counsel for the petitioner cannot be said to be without merit. We do not, however, consider it appropriate to adjudicate these contentions since the substantive appeal is pending before the Sales Tax Appellate Tribunal. Suffice it to observe that the petitioner has an arguable case before the Tribunal. Ends of justice would be met if the respondents are directed not to take any coercive steps till the disposal of the appeal before the Sales Tax Appellate Tribunal subject to the condition that the petitioner deposits 50% of the disputed tax within a period of four weeks from today. Amount, if any already paid, shall be given credit to. The Writ Petition is, accordingly, allowed after hearing Sri B. Srinivas, learned counsel for the petitioner and Sri P. Balaji Varma Learned Special Government Pleader for Commercial Taxes. There shall be no order as to costs. ___________________ GODA RAGHURAM,J _________________​______ RAMESH RANGANATHAN , J DATE: 27.11.2009. KA ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1. 2 CD copies