THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE R.KANTHA RAO WRIT PETITION No. 14415 of 2010 Dated: 21-7-2010 Between: M/s MAYTAS-NCC (JV), Hyderabad, rep. by its Authorised Signatory B.A.N.Raju …Petitioner and Assistant Commissioner (CT)-III, Enforcement Wing, Nampally, Hyderabad and another …Respondents ORAL ORDER: (Per Hon’ble Sri Justice Goda Raghuram) The petitioner, a dealer registered under the AP VAT Act, 2005 has filed returns for the period April, 2006 to March, 2007 with the Assessing Authority, the 2nd respondent. In the notice of assessment dated 7-12-2007 the petitioner was proposed to be assessed on the turnover determined, by applying the provisions of Rule 17(1)(e) of the AP VAT Rules, 2005 with regard to the amounts to be allowed as deductions on the total consideration received and receivable for arriving at the value of the goods. Eventually however, by the order of assessment dated 13-5-2010 passed by the 2nd respondent and also impugned herein, the 2nd respondent eschewed the proposal to assess the petitioner under the provisions of Rule 17(1)(e) based the assessment on the provisions of Rule 17(1)(g), determined a balance tax liability of Rs.11,14,40,781/- and issued a notice of assessment consequently. This order is challenged. The petitioner also challenges the provisions of Section 4(7)(h) of the AP VAT Act, 2005 in so far as a clause therein reads “the turnover of such amount is included in the return prescribed filed by such sub-contractor”, on the ground that the provision is a verbatim reproduction of the earlier Section 5F of the APGST Act and in Media Communications v. Government of Andhra Pradesh[1], Section 5F of the APGST Act was invalidated on the ground that the provision is unreasonable. When once it is found that a sub-contractor is compulsorily registrable, no rational purpose is served in requiring the contractor to prove that the turnover of the sub-contractor was included in the return of turnover filed by the sub-contractor. This Court also held in Media Communications (1 supra) that such information will be only be available to the sub-contractor and it could also be easily verified from the records of the taxing authority since the sub-contractor is registered and his registration number known. This Court held that to require that the contractor should also show that the sub-contractor’s turnover was returned by the sub-contractor, appears to be an unreasonable and irrational burden on the contractor. It is contended by Sri S.R.Ashok, learned Senior Counsel that the provisions of Section 4(7)(h) of the AP VAT Act, 2005 suffers the same infirmity as was pointed out by this Court in Media Communications (1 supra). Sri P.Balaji Varma, learned Special Government Pleader for Commercial Taxes concedes the position that the impugned order of assessment dated 13-5-2010 passed by the 2nd respondent is substantially incoherence and the proposal to bring the turnover declared by the petitioner to tax under Rule 17(1)(g) is at variance with the proposal in the show-cause notice dated 7-12-2007 wherein it was proposed to apply the provisions of Rule 17(1)(e) and for these reasons the order of assessment dated 13-5-2010 for the year 2006-07 cannot be sustained. In view of the facts and circumstances of the case; the fact that the order of assessment dated 13-5-2010 has been passed by the 2nd respondent by applying provisions of a Rule different than the one stated in the show-cause notice, thereby denying the petitioner an adequate opportunity of representing his point of view on the proposal to tax and in view of the fact that there is incoherence in the order of assessment as conceded by the learned Special Government Pleader, the order dated 13-5-2010 cannot be sustained and is accordingly quashed. As the substantive grievance of the petitioner with regard to the order of assessment no longer survives in view of the invalidation of the order of assessment, we are not inclined to consider the validity of the provisions of Section 4(7)(h) of the AP VAT Act, 2005 in this writ petition. As the 2nd respondent would now have to pass a fresh order of assessment after issuing appropriate notice to the petitioner, we preserve liberty to the petitioner to pursue such remedies as advised after a fresh order of assessment is passed, including on the validity of Section 4(7)(h) of the AP VAT Act, 2005. The writ petition is allowed as above at the stage of admission, after hearing the learned counsel for the petitioner Sri Chakrapani, instructing Sri S.R.Ashok, learned Senior Counsel and Sri P.Balaji Varma, learned Special Government Pleader for Commercial Taxes. There shall be no order as to costs. _________________________ GODA RAGHURAM, J _________________________ R. KANTHA RAO, J 21st July, 2010. GRR [1] 105 STC 227