THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.13803 of 2010 BETWEEN: M/s. PSB Industries, rep. by its Managing Partner, Mr. P.Suresh Kumar …PETITIONER(S) and 1. The Commercial Tax Officer, Gajuwaka, Visakhapatnam, and others …RESPONDENT(S) THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.13803 of 2010 ORDER: (PER THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN) Heard Kum K.Uma, learned counsel for the petitioner and Sri P.Balaji Varma, learned Standing Counsel for Commercial Taxes. At their request the Writ Petition is being disposed of at the stage of admission. The petitioner is a works contractor engaged in the business of tyre retreading and is a registered dealer on the rolls of the 1st respondent. The petitioner was issued final eligibility certificate dated 23.05.1998 by the Industries Department granting sales tax exemption of Rs.54,92,060/- which could be availed over a period of seven years commencing from 03.09.1997 till 02.09.2004. For the assessment year 2003-04, the 1st respondent passed assessment order dated 30.11.2005 determining a net turnover of Rs.1.13 Crores as liable to tax @ 4% under Section 5-G of the Andhra Pradesh General Sales Tax Act, 1957. The 1st respondent adjusted the tax liability towards sales tax exemption in the light of the final eligibility certificate issued by the Industries Department. After adjusting the tax liability, the 1st respondent observed the balance sales tax exemption to be availed of was Rs.26,55,049/-, as against Rs.54,92,060/- available as per the certificate. While matters stood thus, the 2nd respondent issued a show cause notice seeking to revise the assessment order, and denying the adjustment of tax due against the tax exemption. The petitioner filed its objections on 05.12.2008 contending that the intention of the Government was to grant incentives not only to the manufacturing units but also to processing units, and that the final eligibility certificate made it clear that the process of tyre retreading amounted to manufacture. The 2nd respondent set aside the assessment order, by his order dated 23.11.2009, on the ground that sales tax exemption was applicable only if retreaded tyres were sold by the petitioner, and not in the case of tax leviable on the inputs used for retreading tyres. Aggrieved by the said order, the petitioner preferred an appeal before the Sales Tax Appellate Tribunal, Additional Bench at Visakhapatnam and paid 25% of the disputed tax towards pre- deposit. Pending appeal before the Sales Tax Appellat Tribunal, the petitioner filed an application seeking stay of collection of the disputed tax and the said application was rejected by order dated 09.03.2010. Aggrieved by the same, the present Writ Petition. While Kum K.Uma, learned counsel for the petitioner, would contend that the inputs which go into retreading of tyres is also required to be exempted from tax in terms of the final eligibility certificate, we consider it wholly inappropriate to examine this contention in the present Writ proceedings in as much as the substantive appeal, regarding the very same issue, is pending on the file of the Sales Tax Appellate Tribunal. We consider it appropriate, therefore, to direct the respondent not to take coercive steps for recovery of the tax due pursuant to the order in revision, on condition that the petitioner deposits 50% of the tax within a period of four weeks from today. Amount, if any, paid towards the tax shall be given credit to. The Writ Petition is, accordingly, disposed of. However, in the circumstances, without costs. ____________________ B.PRAKASH RAO,J _____________________________ RAMESH RANGANATHAN,J 18th June 2010 CVRK