IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE FIFTEENTH DAY OF SEPTEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI A N D THE HON'BLE MR JUSTICE RAMESH RANGANATHAN WRIT PETITION NO : 18274 of 2008 Between: M/s. B.G.Shirke Construction Technology Pvt. Ltd., H-Block, 7th Floor, Surya Towers, R.P.Road, Secunderabad. Rep. by its Vice-President, Sri. V.Srikant, S/o. Late Sri. Ramachary. ..... PETITIONER A N D 1 The Deputy Commissioner (CT), Begumpet division, Ameerpet, Hyderabad. 2 The Commercial Tax Officer, S.D.Road Circle, Ameerpet, Hyderabad. .....RESPONDENTS 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 an appropriate Writ or Direction, more particularly one in the nature of Writ of Mandamus, declaring the impugned order dated 02.06.2008 passed by the 1st respondent in R.R.No.E3/R/74/2005 for assessment year 2002-2003 ( APGST) as illegal, unjustiﬁed and contrary to the provisions of law and accordingly set-aside the same and pass such other suitable orders as this Court may deem fit and proper in the circumstances of the case. Counsel for the Petitioner: MR.B.SRINIVAS Counsel for the Respondents: GP FOR COMMERCIAL TAX The Division Bench of this Court made the following order : THE HONOURABLE SMT. JUSTICE T. MEENA KUMARI AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION NO. 1 8 2 7 4 OF 2008 O R D E R : (Per the Hon’ble Smt. Justice T. Meena Kumari ) 1. The writ petition is ﬁled to declare the impugned order dated 02-6-2008 passed by the first respondent in RR.No. E3/74/k2005 for the assessment year 2002-03 under APGST as illegal, arbitrary and contrary to the provisions of law and accordingly set aside the same and to pass such other suitable orders as this Court may deem ﬁt and proper in the facts and circumstances of the case. 2. The brief facts of the case are as follows: It is stated that the petitioner is a registered dealer on the rolls of the second respondent and engaged in the business of execution of works contract. During the assessment year 2002-03 under APGST, the petitioner executed works for TTD. The petitioner ﬁled returns along with payment of tax before the second respondent. The petitioner also ﬁled statutory audit reports duly certiﬁed by the Chartered Accountant as required under Rule 17 (5-A) of the APGST Rules, 1957. It is stated that the second respondent after verifying the statutory audit reports ﬁled by the petitioner and the books of accounts, passed an assessment order dated 24-5- 2004 which was received by the petitioner on 19-6-2004. The assessment was ﬁnalized by the second respondent at a net turn over of Rs.1,97,49,415-00 after granting necessary exemption in respect of inter-state transactions and steel purchased from local registered dealers. As per the assessment order, the petitioner was to get the refund of excess tax to a tune of Rs.19,89,614-00. The petitioner though made an application for refund as early as on 23-6-2004, the second respondent for the reasons best known to him did not effect the refund so far. Further it is stated that the ﬁrst respondent, however, issued a show cause notice dated 20-10-2005 which was served on the petitioner on 24-10-2005 proposing to revise the order dated 24-5-2004 passed by the second respondent on the ground that the second respondent incorrectly allowed exemption in respect of inter-state transactions, labour charges/administrative expenses, steel purchased from the local registered dealers and in respect of the goods purchased from un-registered dealers, which were used in the execution of works contract. The petitioner ﬁled a letter on 27-10-2005 before the ﬁrst respondent seeking time till 20-11-2005 for ﬁling objections to the show cause notice issued for revising the assessment order passed by the second respondent. The ﬁrst respondent addressed a letter dated 31-10-2005 to the petitioner granting time for ﬁling reply till 21-11-2005. The petitioner was also directed by the ﬁrst respondent to appear for personal hearing on 22-11-2005. Further the petitioner submitted a detailed reply along with the supporting documents vide letter dated 18-1-2005 before the ﬁrst respondent. The petitioner submitted that there is no illegality in the assessment order passed by the second respondent in so far as it is related to granting of exemption in respect of inter-state transactions and the steel purchased from local registered dealers. The petitioner also submitted that it is entitled for deduction of labour charges and other expenses relating to execution of works contract in terms of Rule 6 (2) of APGST Rules, 1957. The petitioner further submitted that there cannot be any levy of tax for the goods purchased from un-registered dealers in respect of goods used in the execution of works contract as there is deemed sale of goods purchased. It is speciﬁcally requested for grant of personal hearing before disposing of the revision proceedings through letter dated 18-11-2008. It is stated that the petitioner appeared before the then Deputy Commissioner (CT) for personal hearing on 22-11-2005 as directed by the ﬁrst respondent in the letter dated 31-10- 2005. The petitioner reiterated before the ﬁrst respondent that the order passed by the second respondent does not require any interference and argued the matter on the basis of reply ﬁled with all supporting documents. It is pertinent to mention here that the petitioner requested the ﬁrst respondent to give another opportunity verbally for personal hearing to further clarify the matter and to submit any other evidence in this regard before passing any order. Even as the petitioner was expecting a fresh notice, ﬁxing a date for personal hearing, to the utter surprise of the petitioner an order dated 02-6-2008 was passed by the successor Deputy Commissioner (CT) conﬁrming the proposals made in the show cause notice. It is pertinent to mention that the show cause notice was issued by the predecessor Revisional Authority for which reply was submitted by the petitioner. It is also relevant to mention here that the personal hearing was conducted by the predecessor Revisional Authority on 22-11-2005. However, the impugned order dated 02-6-2008 was passed by the successor revisional authority without giving any opportunity of personal hearing to the petitioner. The impugned order therefore could not have been passed by the successor oﬃcer on the basis of personal hearing conducted by the predecessor revisional authority. The passing of revisional order by the successor oﬃcer is in violation of the principles of natural justice. 3. Sri B. Srinivas, the learned counsel for the petitioner contended that the ﬁrst respondent after assuming the oﬃce without giving any opportunity of personal hearing to the petitioner passed the impugned order dated 02-6-2008 which is violative of the principles of natural justice. The learned counsel for the petitioner in support of his contention relied upon a decision of this Court in M/s. S.Laliah & Co. V/s. The Dy.Comissioner (CT), Saroornagar Division, Hyderabad [1]., that the order passed by the revisional authority without giving reasonable opportunity of personal hearing is violative of the principles of natural justice. Further the revisional authority failed to appreciate the fact that the petitioner had purchased goods from outside the State for the purpose of executing the works contract and therefore it would be an inter state transaction and cannot be assessed to tax under the provisions of the APGST Act. To support his contention, the learned counsel relied on another decision in M/s. Dwaraka Prashad Radhe Ramanlal V/s. State of A.P [2]. 4. The learned counsel for the petitioner further contended that the ﬁrst respondent failed to appreciate the fact that the steel being declared goods is not liable to tax on the ground of second sales, as the petitioner had purchased the same from local registered dealers. Further the allegation of the ﬁrst respondent that there is a discrepancy between the ﬁgures indicated in the monthly returns and the statutory audit report is not correct. 5. Heard the learned counsel for the petitioner as well as Sri A.V. Krishna Koundinya, the learned Special Standing Counsel for Commercial Taxes. 6. In the light of the peculiar facts and circumstances and after hearing both sides, we deem it appropriate that the impugned order dated 02-6-2008 passed by the first respondent in R.R.No.E3/R/74/29005 is in violation of the principles of natural justice and the same be and is hereby set aside and we direct that the matter be remanded back to the ﬁrst respondent for passing appropriate orders on merits and in accordance with law, without prejudice to the rights of the petitioner, after aﬀording reasonable opportunity to the petitioner to putforth his grievance along with necessary documentary evidence, if any, within a period of two months from the date of receipt of a copy of this order. 7. With the above direction, the writ petition is disposed of at the stage of admission. No costs. ------------------------------------- JUSTICE T. MEENA KUMARI. ----------------------------------------------- JUSTICE RAMESH RANGANATHAN. 15-9-2008. I s L N B : 1) Operative Portion of the order by wire at party’s costs. 2) Furnish CC of the order in three days. B/o. I s L ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{KSRANI} [1] ) 45 APGST J - 116 [2] ) 31 APST J - 19