THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.16428 of 2010 September 08, 2010 Between: M/s.Nut Products Company, S.Annavaram, Tuni, Represented by its Proprietor, Mrs.Preetha Nair … Petitioner And The Joint Commissioner (CT) (Legal), O/o.the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad And another ... Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.16428 of 2010 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) This writ petition is filed assailing the order of the first respondent dated 19.4.2010 whereby and whereunder purporting to exercise revisional jurisdiction under Section 32(2) of Andhra Pradesh Value Added Tax Act, 2005 (VAT Act, for brevity), and under Section 9(2) of Central Sales Tax Act, 1956 (CST Act, for brevity), the first respondent set aside the order of the Appellate Deputy Commissioner, Visakhapatnam, and restored the assessment order of the second respondent. The writ petition is opposed inter alia on the ground that the petitioner has an effective alternative remedy by way of appeal under Section 33(1) of VAT Act. However, we overrule the objection and proceed to dispose of the matter for the reasons stated in this order. The petitioner is a proprietary concern of Mrs.Preetha Nair, engaged in the business of export of cashewnuts/kernels. The head office of the petitioner is at Kollam in Kerala State with branch office at S.Annavaram of Tuni in East Godavari District. The family members of the proprietor – father, mother and three brothers – are also proprietors of five other sister concerns engaged in similar business. The modus operandi of the business is that an export order is obtained by one of the sister concerns by opening a single transferable letter of credit and, depending on the stock position, export commitment is met by the concern in whose name the export order was placed. The petitioner purchased cashewnut from farmers in the State of Andhra Pradesh and, after processing the same, exported it through Visakhapatnam Port to foreign destinations. The second respondent completed the assessment by order dated 22.2.2006 levying tax on the purchase turnover of cashewnut under Section 4(4)(ii) of VAT Act. While doing so, the second respondent treated the cashewnut processed at S.Annavaram, and dispatch of the Kernel to Visakhapatnam Port, as “transfer of goods otherwise than by way of export sale”. The petitioner appealed. The Additional Deputy Commissioner (Commercial Taxes), Visakhapatnam, by order dated 21.4.2006, allowed the appeal holding that the petitioner is eligible for exemption under Section 5(1) of the CST Act, to be zero rated sale under Section 8 of the VAT Act. About four years thereafter, the first respondent set in motion revisional jurisdiction by issuing show cause notice dated 05.3.2010. It was alleged that the petitioner purchased cashewnuts in the State of Andhra Pradesh and transported them to other States otherwise than by sale and, therefore, the provisions relating to levy of purchase tax under Section 4(4) of the VAT Act are attracted. The petitioner submitted explanation. Thereafter the impugned order was passed by the first respondent. The Senior Counsel for the petitioner submits that the first respondent had relied on material, which was not furnished to the petitioner, to substantiate the defence, and thereby reasonable opportunity was denied. He would urge that the petitioner purchased cashewnut in Tuni and exported it through Visakhapatnam port, after due process, and therefore Section 4(4) of VAT Act is not attracted, as it was a “sale” in the course of export under Section 5(1) of the CST Act, and the transaction is zero rated sale under Section 8(b) of the VAT Act. In the counter affidavit filed by the Commercial Tax Officer, the impugned order is sought to be sustained contending that the Nut Products Company, Kollam, and Nut Products Company, S.Annavaram, Tuni, are two different concerns and, therefore, the transaction falls within the ambit of Section 4(4) of the VAT Act. The same contention is reiterated before us by the Special Standing Counsel for Commercial Taxes. Indisputably, the Assessing Officer and Appellate Authority proceeded on the premise that the petitioner purchased cashewnut in Andhra Pradesh and exported it through Visakhapatnam Port. Curiously, while issuing the show cause notice, the first respondent proceeded as if the petitioner had purchased cashewnut in the State and transported it to other States for the purpose of export. If the first respondent had any material to support the assumption, the same was not furnished to the petitioner. Be that as it may, it was not the case either before the Assessing Officer or before the Appellate Deputy Commissioner. The controversy, if any, would be whether Nut Products Company, Kollam, and Nut Products Company, S.Annavaram, Tuni, are two different dealers for the purpose of VAT Act and CST Act. If it could be shown that Nut Products Company, Kollam, is a different entity altogether, the transfer of cashewnut, after processing by the petitioner, to the former is certainly a “transfer of goods otherwise than by way of sale” attracting Section 4(4)(ii) of the VAT Act. The Special Standing Counsel has placed before us the relevant documents like export invoice, VAT registration certificate and CST registration certificate. A bare perusal of these documents would belie the contention that both the concerns are different. All along the petitioner has been claiming that Nut Products Company has its head office at Kollam. Therefore, prima facie, we are satisfied that in appreciating the jurisdictional facts, the first respondent has committed an error. In such an event, the order of a quasi judicial authority cannot be sustained. We are, therefore, inclined to set aside the impugned order and remand the matter to the first respondent with a direction to issue a fresh show cause notice, obtain explanation and pass orders in accordance with law within a period of three months from today. The writ petition is, accordingly, allowed without any order as to costs. ________________ (V.V.S. RAO, J) _______________________________ (RAMESH RANGANATHAN, J) September 08, 2010 YS