THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.20805 of 2007 July 25, 2011 Between: Mr.Chetti Dharmaiah, S/o.Rajaiah ... Petitioner And State of Andhra Pradesh, represented by its Special Chief Secretary, Revenue Department, Secretariat, Hyderabad And another …Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.20805 of 2007 ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) The proceedings of the Assistant Commissioner, Commercial Taxes, Karimnagar Division levying tax on the petitioner, for the activity of giving vehicles on hire to the Andhra Pradesh State Road Transport Corporation (APSRTC) under Section 4(8) of the Andhra Pradesh Value Added Tax Act, 2005 (the Act), is under challenge in this writ petition. Learned Counsel for the petitioner contends that such business carried on by the petitioner, of leasing vehicles to the APSRTC, does not fall within the ambit of Section 4(8) of the Act; and, even if the transaction concerned is held to fall within the ambit of Section 4(8) of the Act, since the gross turnover of the petitioner, even according to the impugned assessment order is less than Rs.10,00,000/-, no tax can be levied on such transactions. Under Section 17(3) of the Act, prior to its substitution by Act No.4 of 2009 with effect from 01.5.2009, every dealer whose taxable turnover, in the preceding three months exceeds Rs.10,00,000/- or in the twelve preceding months exceeds Rs.40,00,000/-, shall be liable to be registered as a VAT dealer. A perusal of the assessment order does support the submission of the Learned Counsel for the petitioner that the taxable turnover, in the preceding three months, never exceeded Rs.10,00,000/-, in any of the assessment years in question. The transactions of giving the vehicles on hire to APSRTC does amount to transfer of the right to use the vehicles concerned and, as such, are taxable under Section 4(8) of the Act. However, prima facie, we are of the view that as the petitioner’s turnover, for the assessment periods in question, never exceeded Rs.10,00,000/- in any given quarter, the petitioner would neither be liable to be registered as a dealer under Section 17(3) of the Act, nor could tax be levied on them under Section 4(8) of the Act. Since this question has been raised for the first time in the writ petition, and has not been urged before the assessing authority, we consider it appropriate to remand the matter back to the assessing authority to examine the question whether the petitioner is liable to be registered as a VAT dealer under Section 17(3) of the Act and, consequently, whether they are assessable to tax under the Act. The writ petition is, accordingly, allowed. However, in the circumstances, without costs. ________________ (V.V.S. RAO, J) ______________________________ (RAMESH RANGANATHAN, J) July 25, 2011 YS