THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 24683 of 2009 Dated: 02-02-2010 Between: M/s Maytas Infra Pvt. Ltd., rep. by its Deputy General Manager (Indirect Taxation) Mr. R.A.Swaroop. …Petitioner and The Commercial Tax Officer, Begumpet Circle, Hyderabad. …Respondent. Oral order: (Per RR, J) The petitioner, a registered dealer on the rolls of the respondent, is carrying on business in execution of works contracts and in development of infrastructure facilities. It is one of partners of a joint venture by name “Maytas NCC Joint Venture” which executed certain irrigation works in Andhra Pradesh. For the assessment year 2007-08 the petitioner received certain amounts towards utilization charges of machinery and equipment from the joint venture. The said receipts were not reported in the returns on the premise that such charges received by the petitioner did not represent amounts received towards transfer of the right to use goods in favour of the joint venture and were only service charges. The petitioner subsequently paid tax on the entire turnover of utilization charges received by them from the joint venture under protest as an abundant caution. Without even an assessment order being passed, a notice was issued under Section 53(3) of the AP VAT Act, 2005 (for short ‘the Act’) on 26-12-2008 proposing to levy penalty. The petitioner filed detailed objections thereto vide their representation dated 5-1-2009 despite which the levy of penalty was confirmed by proceedings dated 20-1-2009. Aggrieved thereby the petitioner carried the matter in appeal to the Appellate Deputy Commissioner who, by order dated 29-7-2009, allowed the appeal and remanded the matter back to the Assessing Authority. The Appellate Authority found fault with the action of the respondent in passing an order of penalty without there being any assessment order, determining the suppression of turnover, which was mandatory for invoking the powers under Section 53(3) of the Act. Pursuant to the order of the Appellate Authority, the respondent issued notice dated 17-8-2009 proposing to levy tax. After referring to the order of the Appellate Authority dated 29-7-2009 the respondent observed that the petitioner did not file Form 213. In response to the notice, the petitioner filed a detailed reply, vide their representation dated 1-9-2009, objecting the proposed levy. They reiterated that the amount received by them towards utilization charges of machinery and equipment did not attract tax liability under Section 4 (8) of the Act since there was no transfer of the right to use goods and the petitioner had throughout retained custody and control of the equipment through its operators, drivers etc. The respondent confirmed the levy in the impugned assessment order dated 19-10-2009 which was served on the petitioner on 21-10-2009. Sri Bhaskar Reddy Vemireddy, Learned counsel for the petitioner would contend that, in passing the impugned order, the respondent did not consider any of the objections filed by the petitioner; no clauses of the agreement were referred to; the conclusion of the assessing authority that no person would pay tax in the absence of any liability, was perverse; and that the Assessing Authority had failed to consider that the petitioner had paid tax under protest and without prejudice to their contention that they were not liable to pay tax. A perusal of the order of assessment dated 19-10-2009 reflects the respondent’s consideration of several judicial pronouncements of the Supreme Court and the High Court. The respondent has, however, neither considered the objections filed by the petitioner nor did he examine the conditions of the contract. No finding of fact has been recorded as to whether or not the charges received by the petitioner represented any amount towards transfer of the right to use goods in favour of the joint venture resulting in the petitioner’s being liable to pay tax under Section 4(8) of the Act. It is also evident from the letter addressed by the petitioner to the respondent on 21-8-2008 that they were paying tax of Rs. 1,44,08,668/-, for the period from 1-4-2007 to 30-6-2008, under protest though, in their view, they were not liable to pay any tax under Section 4 (8) of the Act read with Rule 20 (3-a) of the Rules. The impugned order is bereft of reasons and is, accordingly, quashed. The respondent is at liberty to pass an order of assessment afresh after giving the petitioner an opportunity of being heard. The writ petition is allowed. However, in the circumstances, without costs. __________________________ GODA RAGHURAM, J ________________________________ RAMESH RANGANATHAN, J 2nd February, 2010. GRR