The State of Ap,Rep.by Sr Before Stat Vs M/S.Tashtriya Ispath Nigam Ltd. — Andhra Pradesh HC (2026) — LawSathi Research

The State of Ap,Rep.by Sr Before Stat Vs M/S.Tashtriya Ispath Nigam Ltd. — Andhra Pradesh HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Tax Revision Case dismissed; the Tribunal's order stands; no order as to costs; pending miscellaneous applications closed

Issue for consideration

Whether the hire charges collected by the respondent on equipment/machinery given to its works-contractors, and the water charges recovered from contractors, are exigible to tax. +1 more

Court's answer

No tax could be levied on the turn-over relating to hire charges, the question having been so held by the erstwhile High Court of Andhra Pradesh in the respondent's own case for the year 1988-89.

Ratio / Principle

The order of revision was not within limitation: on the Tribunal's finding of fact that the issues in T.R.C. No.256 of 1990 and batch bore no relevance to the hire-charge/water-charge issue, the period during which the revision proceedings were kept on hold cannot be excluded, and the Court found no ground that the order of revision was within limitation.

Detailed headnote1 paragraphs

High Court of Andhra Pradesh at Amaravati (Division Bench; per R. Raghunandan Rao, J., with T.C.D. Sekhar, J.) dismissed the State's Tax Revision Case (T.R.C. No.169 of 2003) directed against the Sales Tax Appellate Tribunal's order in favour of M/s Rashtriya Ispat Nigam Limited (Visakhapatnam Steel Plant). The respondent, while setting up its manufacturing unit, had given civil-works and machinery-installation contracts and had supplied construction material, equipment (on hire charges) and water (to contractors' labour) recovering charges from the contractors; a Joint Commissioner's order of revision brought the hire-charge and water-charge turn-overs to tax. The Court noted that the question of tax on hire charges stood answered by the erstwhile High Court of Andhra Pradesh in the respondent's own case for 1988-89, where it was held that no tax could be levied on the hire-charge turn-over. On limitation, the Court accepted the Tribunal's finding that the issues in T.R.C. No.256 of 1990 and batch (concerning cost-recovery supply of cement, steel and AC sheets) had no relevance to the hire/water-charge issue, so the period the revision lay kept on hold could not be excluded; consequently the revisional order was not within limitation. The Tax Revision Case was dismissed with no order as to costs.

APHC010453782003

[3529]

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

(Special Original Jurisdiction)

MONDAY, THE SECOND DAY OF FEBRUARY TWO THOUSAND AND TWENTY SIX

PRESENT

THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO

THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR

TAX REVISION CASE NO: 169/2003

Between:

THE STATE OF AP,REP.BY SR BEFORE STAT, THE STATE OF ANDHRA PRADESH,REP.BY THE STATE REPRESENTATIVE BEFORE S.T.A.T. D.NO.5-4-404 TO 408 NAMPALLY, A.P.,

...PETITIONER

AND

M/S TASHTRIYA ISPATH NIGAM LTD, M/S.RASHTRIYA ISPATH NIGAM LIMITED VISAKHAPATNAM STEEL LPLANT VISAKHAPATNAM

...RESPONDENT

Counsel for the Petitioner:

1.GP FOR COMMERCIAL TAX

2.SPL GP FOR TAXES

Counsel for the Respondent:

1.A SARVESWAR RAO

2

RRR, J & TCDS, J T.R.C.No.169 of 2003

3

RRR, J & TCDS, J T.R.C.No.169 of 2003

The Court made the following Order:

(per Hon’ble Sri Justice R. Raghunandan Rao)

The respondent herein, in the course of establishing its manufacturing unit, had given certain contracts to the contractors for execution of civil works and installation of machinery. In the course of these contracts, the respondent had also supplied construction material and equipment, by collecting hire charges from them. Apart from this, the respondent had also supplied water to the labour engaged by the contractor by installing water meters in labour colonies and recovered the cost of water from the contractors.

The hire charges and the water charges collected by the respondent were sought to be taxed by the Authorities. Both these turn-overs were brought to tax, by way of an order of revision, issued by the Joint Commissioner. Aggrieved by the said order of the Joint Commissioner, the respondent moved the Sales Tax Appellate Tribunal.

In the Tribunal, the respondent raised three contentions. Firstly, that the hire charges on the equipment given to the contractors is not exigible to tax. Secondly, the water charges collected from the contractors, by supply of water to the labour, is also not exigible to tax; and thirdly, the order of revision itself is barred by limitation.

The Tribunal held that the hire charges, collected by the respondent, in relation to the hire of machinery, are not exigible to tax. The Tribunal held that the turn-over relating to the water charges collected by the

4

RRR, J & TCDS, J T.R.C.No.169 of 2003

respondent would not be exigible to tax. Finally, the Tribunal held that the order of revision, levying these two taxes on these two turn-overs is beyond limitation and set aside the order of the Revisional Authority.

The State, being aggrieved by the said order of revision, has approached this Court, by way of the present Tax Revision Case.

The question of levying tax on hire charges on the equipment supplied by the respondent had been considered by the erstwhile High Court of Andhra Pradesh in the case of the respondent itself, for the year 1988-89, wherein it was held that no tax could be levied on the turn-over relating to the hire charges. As no revision has been moved by the respondent in relation to the decision of the Tribunal, regarding the exigibility to tax on water charges, the same would arise only after it is found that the order of revision is within limitation.

It appears that the revision proceedings initiated by the Joint Commissioner were kept on hold on the ground that a similar issue was pending before the Hon’ble High Court of Andhra Pradesh, by way of T.R.C. No.256 of 1990 and batch. Later, the said proceedings were completed after the said Tax Revision Cases had been disposed of the Hon’ble High Court. It is an admitted case that the order of revision of the Joint Commissioner would be within time only if the revision proceedings were initiated within the stipulated period of limitation. The Tribunal has given a finding of fact that the issues in T.R.C.No.256 of 1990 & batch were the questions of whether the

5

RRR, J & TCDS, J T.R.C.No.169 of 2003

supply of cement, steel and AC sheets by the contractee to the contractor on cost recovery basis, for use in works contracts, would be exigible to tax by treating the supply as sale. The Tribunal had then held that this issue had no relevance or relation to the issue before the Tribunal on the question of levy of tax on hire charges and water charges.

On the basis of this finding of fact, the Tribunal has held that the period spent cannot be excluded for calculating the period of limitation, within which the revision should have been passed.

In view of this finding of fact, we do not find any ground that the order of revision was within limitation.

Accordingly, this Tax Revision Case is dismissed. There shall be no order as to costs.

As a sequel, pending miscellaneous applications, if any, shall stand closed.

________________________

R. RAGHUNANDAN RAO, J

________________ T.C.D. SEKHAR, J

Date: 02.02.2026 MJA

6

RRR, J & TCDS, J T.R.C.No.169 of 2003

206

THE HON’BLE SRI JUSTICE R RAGHUNANDAN RAO

AND

THE HON’BLE SRI JUSTICE T.C.D. SEKHAR

TAX REVISION CASE NO: 169/2003

(per Hon’ble Sri Justice R. Raghunandan Rao)

02.02.2026

MJA