IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE SEVENTEENTH DAY OF DECEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH AND THE HON'BLE MR JUSTICE K.C. BHANU WRIT PETITION No: 27491 of 2008 BETWEEN: G. Narayana Reddy, S/o. Veera Reddy, H.No.26-34-22-9, 10th Lane, A.T. Agraharam, Guntur. ... PETITIONER AND 1 The Government of Andhra Pradesh, Rep by its Principal Secretary to Government, Finance(Works and Projects) Department, Secretariat, Hyderabad. 2 The Executive Engineer, ( R & B) Guntur. 3 The Executive Engineer, (R & B) Tenali, Guntur District. 4 The Pay and Accounts Officer, (W & P) Guntur, Guntur District. 5 Commercial Taxes Officer, Eluru Bazar Circle, Guntur. 6 The Executive Engineer, panchayat Raj Division, Guntur. 7 The Municipal Corporation, Guntur Rep by its Commissioer, Guntur. 8 The Executive Engineer, public Health Division, Guntur. ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a writ, order or direction preferably in the nature of Writ, order or direction preferably in the nature of Writ of Mandamus (1) Declaring the Memo No.602/F8(1)/2006 dated 14-03-2007 issued by the first respondent is arbitrary, illegal, invalid and contrary to the provisions of the A.P. Value Added Tax Act, Rules made there under and G.O.Ms.No.11 dated 29-07-2005 and G.O.Ms.No.141 dated 27-07-2006 and unsustainable. (2) The Petitioners is entitled for addition of VAT Component of 4% on the entire value or work done at the time of payment of each bill in terms of the provisions of G.O.Ms.No.11 dated 29-07-2005 and G.O.Ms.No.141 dated 27-7-2006 and Section 22 (3) of the A.P.VAT Act. 3) Declaring the action of the respondents 2 to 8 in adding only 1.4 % at the time of payment of bill i.e., lesser that 4% in respect of some works as arbitrary, illegal and contrary to the provisions of the A.P. Value Added Tax and the Government Orders in force as well as the terms of the agreement and 4) Consequently direct the respondents No.2 to 8 to pay the difference 2.6% amount on the total value of works and pass such other order or orders. Counsel for the Petitioner: MR.K.JAYA KUMAR Counsel for the Respondent Nos.1 & 4: GP FOR FINANCE & PLANNING Counsel for the Respondent Nos.2 & 3: GP FOR ROADS & BUILDINGS Counsel for the Respondent No.5: GP FOR COMMERCIAL TAX Counsel for the Respondent No.6: GP FOR PANCHAYAT RAJ Counsel for the Respondent No.7: GP FOR MUNICIPALITIES The Court made the following: ORDER: (per Hon’ble Sri Justice V. Eswaraiah) The writ petition is filed seeking to declare that (1) the Memo No.602/F8(1)/2006 dated 14.03.2007 issued by the first respondent is arbitrary, illegal, invalid and contrary to the provisions of the A.P. Value Added Tax Act and Rules made there under; (2) the petitioner is entitled for addition of VAT Component of 4% on the entire value of work done at the time of payment of each bill in terms of the provisions of G.O.Ms.No.11 dated 29.07.2005 and G.O.Ms.No.141 dated 27.07.2006 and Section 22 (3) of the A.P.VAT Act; 3) the action of the respondents 2 to 8 in adding only 1.4 % at the time of payment of bill i.e., lesser than 4% in respect of some works as arbitrary, illegal and contrary to the provisions of the A.P. Value Added Tax and the Government Orders in force as well as the terms of the agreement and 4) to direct the respondents No.2 to 8 to pay the difference 2.6% amount on the total value of works. 2. The petitioner is registered dealer under the A.P. Value Added Tax Act, 2005 and he is an assessee on the rolls of the Commercial Tax Department. The petitioner is carrying on the business in execution of ‘Work Contracts’. 3. It is submitted by the learned counsel for the petitioner that the petitioner has already paid 1.4% on the total value to the department and hence, he is entitled for refund of 4% on total value from the respondents. But, however, the learned Government Pleader and also the learned counsel for the petitioner further submit that the balance of 1.4% has already been paid and the petitioner is entitled for refund from the respondents. 4. The learned Government Pleader submits that the petitioner has paid 4% in total. 5. Heard the learned counsel for the petitioner, the learned Government Pleader for Finance and Planning, the learned Government Pleader for commercial Taxes, the learned Government Pleader for Panchayat Raj & Rural Development and the learned Government Pleader for Roads and Buildings. 6. In view of the facts and circumstances of the case and also recording the submissions made by the learned counsel for the petitioner and the learned Government Pleaders, the writ petition is allowed. However, there shall be a direction to the respondents not to remit any further amount to the Commercial Tax Department in respect of the deductions already made pursuant to Memo dated 14.03.2007 of the first respondent, while passing the final bill. The writ petition is allowed accordingly. There shall be no order as to costs. ______________ V. ESWARAIAH, J ______________ K.C. BHANU, J December 17, 2008 Note: Furnish C.C. of the order by 19.12.2008 (B/o) DSK