Partly allowed

The State of Andhra Pradesh, v. M/s. Shivani Alloy Steel Castings (P) Ltd.

Telangana HC12 Dec 2012TREVC/92/2012

Case brief

AI extract

What is this about?

State of A.P. challenged the Sales Tax Appellate Tribunal's order which set aside a revisional order without remitting issues. The High Court held the Tribunal erred and remitted the two tax issues to the Assessing Authority for fresh determination.

What did the court decide?

Tribunal order set aside regarding the two issues; issues remitted to Assessing Authority. No order as to costs.

The State of Andhra Pradesh, Vs M/s. Shivani Alloy… — Banking and Recovery | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO

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TREVC No.92 of 2012

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JUDGMENT (Per the Hon’ble Sri Justice Goda Raghuram):

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Heard Sri P. Balaji Varma, the learned Special Government Pleader for Commercial Taxes for the revision petitioner – State of A.P.

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There is no representation on behalf of the respondent – assessee though the respondent was served notice of this revision on 14.09.2012, pursuant to the notice ordered on 10.09.2012. The revision is preferred against the order of the Sales Tax Appellate Tribunal, Hyderabad, dated 24.08.2010 in T.A.No.348 of 2006.

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The relevant facts: The respondent is a manufacturer of and trader in “steel castings”, assessed on the rolls of the Commercial Tax Officer, Basheerbagh Circle, Hyderabad. A provisional order of Assessment was passed on 30.05.2000, whereagainst the assessee preferred an appeal which was partly allowed on 30.11.2001. A final assessment order was passed by the Assessing Authority on 27.03.2002, in terms of the appellate order. The Additional Commissioner (CT) (Legal), Hyderabad, by the order dated 19.11.2005, after due process revised the Final Assessment Order dated 27.03.2002 and the appellate order dated 30.11.2011.

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Against the revisional order dated 19.11.2005, the assessee preferred an appeal before the Sales Tax Appellate Tribunal, Hyderabad, which was partly allowed. The Tribunal observed that the revisional authority had mainly discussed only the issue whether “steel castings” could be exempted from tax. Although the show cause notice was issued with respect to tax holiday and set off under

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G.O.Ms.No.763, dated 21.08.1990, the revisional authority simply stated that the assessing authority shall not adjust tax payable on purchases of scrap in tax holiday account and issued directions that G.O.Ms.No.1019 is enforceable only with effect from 10.12.1996 and is inapplicable to interstate sales of manufactured products and that the assessee company shall work out the eligible set off on the proportionate basis in respect of interstate sales.

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The Tribunal further found that the above directions of the revisional authority were given without any discussion or reason; that from the assessment order, it is seen that the Commercial Tax Officer had allowed the claim of the appellant with respect to set off of tax to the tune of Rs.1,23,534/- towards tax paid in excess of 4% on the purchase of diesel consumed in the captive generation of power, applying G.O.Ms.No.1019; the issue relating to tax holiday finds mention only in the Commercial Tax Officer’s order (dated 27.03.2002) but not in the Appellate Deputy Commissioner’s order dated 30.11.2011; and from the Commercial Tax Officer’s order, it is not clear whether the holiday benefit was given to sale of scrap or otherwise. However, instead of remitting the matter to the Assessing Authority for de novo assessment in the circumstances, the Tribunal set aside the revisional order insofar as it related to the two issues, namely set off of tax in terms of G.O.Ms.No.1019 and adjustment of tax payable on purchase of scrap in tax holiday account.

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With regard to the issue pertaining to “steel castings” and whether these are taxable again if the raw material for the same were earlier taxed, the Tribunal confirmed the judgment of the revisional authority observing that each commercial commodity is a separate object for taxation in a series of sales; that “steel castings” appear at Item 2(viii) and “iron and steel scrap” at Item 2(A) of the III Schedule to the APGST Act, 1957; that in the present case, “steel castings” and raw material used by the assessee i.e., steel scrap are not mentioned

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in the same sub-item and they belong to sub-items under entry 2 and 2A to the III Schedule; and going through the assessment order and the appellate order it is seen that the product of the assessee was mentioned as “steel castings”. The Tribunal concluded that castings manufactured by the assessee must be regarded as “steel castings” in the finished form not liable to be equated with “rough cast iron castings” which require further machining and process. Since “steel casings” are finished products and do not require further machining, the appellant cannot contend that “steel castings” must be equated with rough cast iron castings, held the Tribunal.

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The assessee has not preferred any revision against this part of the Tribunal order.

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On the aforesaid analysis, we hold that the Tribunal erred in failing to remit to the Assessing Authority for de novo consideration and determination, the two issues, namely (a) set off of tax in terms of G.O.Ms.No.1019; and (b) adjustment of tax payable on purchase of scrap in tax holiday account.

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For the aforesaid reasons, we partly allow this revision and set aside the order of the Tribunal insofar as the order of the revisional authority dated 19.11.2005 has been set aside on the two issues spelt out in the preceding paragraph without remitting the matter for de novo consideration and determination by the assessing authority. These issues are remitted for fresh consideration and determination by the Assessing Authority.

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The revision is partly allowed as above, but there shall be no order as to costs.

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JUSTICE GODA RAGHURAM

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Date: 12.12.2012

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JUSTICE M.S.RAMACHANDRA RAO

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THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE M.S.RAMACHANDRA RAO

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T.R.C.No.92 of 2012

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(order of the Bench delivered by the Hon’ble Sri Justice Goda Raghuram)

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Date: 12.12.2012

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The State of Andhra Pradesh, v. M/s. Shivani Alloy Steel Castings (P) Ltd.

Case brief

What is this about?

What did the court decide?

The State of Andhra Pradesh, v. M/s. Shivani Alloy Steel Castings (P) Ltd.

Case brief

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What did the court decide?

What the court decided

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