THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 18524 of 2009 Dated:09-09-2009 Between: M/s Pooja Marbles, Gatchibowli, Hyderabad …Petitioner and The Additional Commercial (CT) Legal, Gandhi Bhavan, Nampally, Hyderabad and others. …Respondents Oral order: (Per GR, J) Heard the learned counsel for the petitioner and the learned Special standing counsel for Commercial Taxes. The 1st respondent declined to grant stay by the impugned proceedings dated 9-7-2009 and that is how the writ petition is instituted. The petitioner is a partnership Firm executing civil works in the special economic zone, registered on the rolls of the 4th respondent. It opted to pay tax by way of composition under section 4 (7)(c) of the A.P. VAT Act, 2005 (for short ‘the Act’). The 3rd respondent took up assessment for the period January, 2007 to March, 2007 and levied additional tax over and above the admitted tax, plus interest of Rs.45,163/- . Aggrieved thereby, the petitioner preferred an appeal before the Appellate Deputy Commissioner. The appeal was dismissed. Thereupon, the petitioner preferred a further appeal before the Sales Tax Appellate Tribunal, Hyderabad Bench, being VAT APP 401. Besides preferring the appeal, the petitioner applied to the 1st respondent for stay of collection of the disputed tax. Before the 1st respondent, the petitioner urged that the turnover assessable under section 4 (7) (e) of the Act is the purchase value and not the incorporation value in the execution of the works contract. This contention was urged on an interpretation of the provisions of Section 4 (7) (e) of the Act. The 1st respondent however rejected this contention on the ground that the Supreme Court in Ganon Dunkerly & Co v. State of Rajasthan[1]had held that in works contract, the taxable event is the incorporation and it is the value of the incorporated that is assessable to tax at the appropriate rate legislatively determined. In the facts and circumstances of the case and as the provisions of Section 4 (7)(e) of the Act do not expressly provide for the value of incorporation of the goods purchased or received from outside the State as the basis for computing the tax leviable, the petitioner is seen to have an arguable case in the appeal pending before the Sales Tax Appellate Tribunal. It has also deposited 50 per cent of the disputed tax by the time of preferring the appeal before the Sales Tax Appellate Tribunal. Interest of justice warrant that no coercive steps be taken against the petitioner for collection of the balance tax, pending disposal of the further appeal by the Sales Tax Appellate Tribunal. In the circumstances, as the petitioner had already deposited 50 per cent of the disputed tax pending disposal of the appeal by the Sales Tax Appellate Tribunal, there shall be stay of all further proceedings by way of collection of disputed tax. The writ petition is disposed of as above. No costs. __________________________ GODA RAGHURAM, J ______________________________ RAMESH RANGANATHAN, J 9th September, 2009. GRR [1] 88 STC page 204