THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.18863 of 2010 September 21, 2010 Between: M/s.Genesis Formulations, a partnership Firm, Having its office at 10-5-814/5/2, North Lallaguda, Secunderabad, represented by Dr.Vinod v.Ghanathay … Petitioner And The Deputy Commercial Tax Officer, Market Street Circle, Secunderabad Visision, Mayur Kushal Complex, Abids, Hyderabad And others ... Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.18863 of 2010 ORDER: (per Hon’ble Sri Justice V.V.S.Rao) The petitioner is a firm. It was started by Dr.Govind G. Ghanathay, a highly qualified Ph.D Scholar with specialization in Neuro Toxicology (hereafter, Technocrat). He commenced business in marketing “aqua feed supplements” mainly used in pisciculture and prawn culture. The firm was registered under the Andhra Pradesh Value Added Tax Act, 2005 (VAT Act) on the rolls of the second respondent. The firm has had been paying 1% tax on the turnover as ToT dealer. On proper authorization, first respondent inspected the business premises on 18.6.2010. On an allegation that there are contraventions of the provisions of VAT Act. The first respondent recorded the statement from the technocrat and obtained the under paid tax, and penalty thereon, by way of three cheques for a total sum of Rs.2,67,729/- for the months of April and May 2010. These cheques were drawn in favour of the third respondent. Whatever be the consequences of the inspection, the first respondent initiated proceedings for the assessment of VAT under Section 21 of the VAT Act, and issued the assessment order dated 02.7.2010 demanding the tax and penalty. The assessment order in Form VAT 305 is assailed in this writ petition. Preliminary submissions were made by the Counsel on 17.8.2010. It was contended that, in view of Section 7 of VAT Act read with Item-3 of Schedule-I to the VAT Act, the aqua feed supplements are exempted from VAT and, therefore, levy of tax is unconstitutional. Prima facie the petitioner is on firm ground. Therefore, we directed the Special Standing Counsel for Commercial Taxes to get instructions. Today the Special Standing Counsel does not dispute the legal position. Section 7 of VAT Act deals with exemptions and is to the effect that, “the goods listed in Schedule-I as a heading; LIST OF GOODS EXEMPT FROM TAX UNDER SECTION 7”. Entry-3 thereof inter alia lists aquatic feed and feed supplements. Therefore, ex facie, the levy by the respondents falls foul of Article 265 of the Constitution of India. It must be visited with invalidation, which we accordingly do. The writ petition is, accordingly, allowed without any order as to costs. ________________ (V.V.S. RAO, J) _______________________________ (RAMESH RANGANATHAN, J) September 21, 2010 YS