IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE TWENTY FIFTH DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 12822 of 2008 Between: M/s. Rithvikaa motors, T.O.R.Complex, Opp: Triveni Complex, Anantapur - 515 005, rep. by its Proprietor, Mr. T.Sreedhar Reddy. ..... PETITIONER AND Assistant Commissioner (CT) (Int.) LTU, Anantapur Division, Anantapur. .....RESPONDENT Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a writ of mandamus or any other appropriate writ or order or direction setting aside the order of the respondent dated 7-5-2008 received by the petitioner on 28-5-2008 for the period 2005- 06 as illegal, contrary to law and in violation of Principles of Natural justice and contrary to the provisions of the APVAT Act, 2005. Counsel for the Petitioner:MR.S.DWARAKANATH Counsel for the Respondents.: SPECIAL STANDING COUNSEL FOR COMMERCIAL TAX The Court made the following : THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 12822 of 2008 ORDER: (Per Hon’ble Smt. Justice T. Meena Kumari) This writ petition is filed by the petitioner seeking to set aside the order of the respondent, dated 7-5-2008 for the period 2005-06, as illegal, contrary to law and in violation of Principles of natural justice and contrary to the provisions of the APVAT Act, 2005. It is the case of the petitioner that a notice dated 18.4.2008 was issued to the petitioner-firm, who is a dealer in two wheelers and its spare parts of Bajaj, proposing to disallow the claim as to the input tax credit on purchases within the State in respect of Spare parts and lubricants. On that, the petitioner filed its objections. But the respondent by ruling out the same, disallowed the claim of the petitioner. Having aggrieved by the same, the present writ petition has been filed. Heard the learned Counsel for the petitioner and the learned Standing Counsel for the respondent and perused the material available on record. The learned Counsel for the petitioner contended that on the application filed by the petitioner for registration under the A.P. VAT Act, on 15.2.2003, according to which, it was stated that the petitioner trades in two wheelers and spare parts of Bajaj Auto Limited, the Commercial Tax Officer granted VAT registration with TIN No:28400130840 with effect from 1.4.2005 and therefore, the petitioner is entitled to claim input tax credit in respect of spare parts and lubricants purchased from registered dealers under the Act having TIN numbers and against tax invoices and as such, the restrictions contained in section 13 (4) read with rule 20 (2) (a) have no application to the facts of the case on hand. It is further contended that under the provisions of section 13 (1) of the VAT Act, the dealers are eligible for input tax credit in respect of the goods used for business unless they are specifically disqualified under any other provision of the Act. Relying on clause (a) of Rule 20 (2), which reads “All automobiles including commercial vehicles/two wheelers/three wheelers required to be registered under Motor Vehicles Act, 1988 including tyres and tubes, spares and accessories for the repair and maintenance thereof unless the dealer is in the business of dealing in these goods”, it is contended that the automobile dealer dealing in spare parts is not covered by rule 20 (2) (a) and consequently, the petitioner is eligible for input tax credit. Therefore, the order impugned herein suffers from illegality and irregularity. On the other hand, it is contended by the learned Standing Counsel for the Commercial Taxes that the authorities have considered all the aspects in arriving at the justified conclusion and therefore, the order impugned does not warrant any interference by this Court. At this juncture, it is relevant to go through the order impugned. The order impugned goes to show that in response to the show cause notice, the assessee filed objections through the letter dated 28.4.2008 requesting that they are eligible for input tax credit on purchases of spare parts and lubricants on the ground that they were already trading the spare parts of Bajaj company along with two wheeler motor vehicles. But, in the same breathe of the order, it was observed that there are no entries regarding the spare parts and lubricants as stated by the assessee in the objections. Except stating that the assessee has failed to note the entries regarding the spare parts and lubricants, there are no such other valid grounds in passing the order impugned. Apart from that, in view of the provisions of Rule 20 (2) (a) of the VAT Act, and the registration Certificate vide TIN No:28400130840, We are of the opinion that the assessee has not been afforded sufficient opportunity to put forth its case as to the observations made in the course of the order and therefore, it is a fit case wherein the matter can be remitted back for fresh consideration after affording an opportunity to the petitioner, while keeping in view the appropriate interpretation of the provisions of Rule 20 (2) (a) of the Act as well a s the registration certificate. Accordingly, this writ petition is disposed of remitting the matter back to the authorities for fresh consideration, after affording an opportunity to the petitioner, while keeping in view the appropriate interpretation of the provisions of Rule 20 (2) (a) of the Act as well as the registration certificate. No order as to costs. ________________________ Justice T. Meena Kumari ___________________________ Justice Ramesh Ranganathan Date: 25th June, 2008 Note: Issue CC on Monday (BO) Nn/gurc. THE HON'BLE MRS JUSTICE T.MEENA KUMARI and THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION No:12822 OF 2008 (Order delivered by the Hon’ble Smt. Justice T. Meena Kumari) 25/06/2008