Allowed

M/s. Vpl Projects Pvt. Limited v. The Deputy Commissioner (Ct)

Telangana HC16 Apr 2012WP/8420/2012

Case brief

AI extract

What is this about?

This common order disposed of writ petitions challenging tax and penalty levied under the Andhra Pradesh VAT Act. The High Court set aside assessment and penalty orders, following Balaji Flour Mills, holding that audit authorization alone does not permit assessment without a separate authorization.

What did the court decide?

Impugned assessment and penalty orders set aside; proceedings remitted to audit officers for submission of audit reports.

M/s. Vpl Projects Pvt. Limited Vs The Deputy… — GST and Indirect Tax | Telangana HC (2012)

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THE HON’BLE SRI JUSTICE V.V.S. RAO AND

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THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY

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WRIT PETITION Nos.8415 and 8420 of 2012

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April 16, 2012

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Between:

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M/s.VPL Projects Pvt. Ltd., represented by its Director, Mr.Bhavineni Suresh

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And The Deputy Commissioner (CT), Visakhapatnam And another

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THE HON’BLE SRI JUSTICE V.V.S. RAO AND

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THE HON’BLE SRI JUSTICE G. KRISHNA MOHAN REDDY

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WRIT PETITION Nos.8415 and 8420 of 2012

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COMMON ORDER: (per Hon’ble Sri Justice V.V.S.Rao)

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The orders of the third respondent dated 16.7.2011 and 20.7.2011, levying tax and penalty under the Andhra Pradesh Value Added Tax Act, 2005 (the Act), are under challenge in these writ petitions.

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The petitioner, who executed the works contract, is a registered dealer on the rolls of the second respondent under the Act. The petitioner contends that the second respondent is the territorial assessing authority and that the third respondent issued notices dated 16.7.2011 and 20.7.2011 stating that the petitioner executed the works during the years 2008-2009 to 2010-2011 as per the reports furnished. It was also observed that for those years, the petitioner is liable to pay the tax due at Rs.5,36,358/-, and the penalty of Rs.1,34,090/- and, as per Section 4(7)(a) of the Act read with Rule 17(1)(g) of the Andhra Pradesh Value Added Tax Rules, 2005 (the Rules), every dealer executing works contract shall pay tax on the value of the goods, at the time of incorporation of such goods in the works executed, at the rates applicable to the goods under the Act.

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The assessment and penalty have been challenged on two grounds: first, the audit officer had no specific authorisation to undertake assessment and impose tax, and secondly that there was no notice issued prior to undertaking penalty proceedings. The submissions were not seriously disputed by the other side.

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This Bench in Balaji Flour Mills v. the Commercial Tax Officer-II, Chittoor, Chittoor District^[1] has considered the validity of the self same rule, as well as the question whether the authorization for audit given by the Deputy Commissioner under Rule 59(1)(7) of the Rules read with Section 43 of the Act enables the Audit Officer to also undertake assessment for the relevant period. The question was answered in the negative. The conclusions in the judgment dated 30.12.2010 are as follows.

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(a) In the result, in the analysis and for the reasons as above, we reject the relief to declare Rule 59(1)(4)(ii)(b) and (d) of the VAT Rules as ultra vires. We also declare that sub-sections (3) and (4) of Section 17 do not suffer from any constitutional infirmity and are valid. We also reject all other

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prayers for declaring the impugned rule and impugned assessment orders as ultra vires or invalid except to the extent indicated in (b) and (c) below;

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(b) In view of our holding that the authorisation to audit under Section 43 read with Rule 59(1)(7) by itself does not enable audit officer to undertake assessment, we set aside all the assessment orders and consequential orders, if any under Section 53 of the VAT Act, in all the writ petitions; (c) All the impugned assessment orders shall stand remitted to the respective audit officers who shall submit audit reports as contemplated under Chapter VII of the VAT Audit Manual for appropriate Post Audit Action. If the competent controlling and/or supervising authority like Deputy Commissioner issues separate orders authorizing assessment, it shall be open to such authorizing officer or authority prescribed, as the case may be, to undertake assessment in accordance with law.

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Following the same, the impugned assessment order and the penalty order are set aside, and the writ petitions, as also the miscellaneous petitions, stand disposed of without any order as to costs.

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_______________ (V.V.S. RAO, J)

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__________________________________ (G.KRISHNA MOHAN REDDY, J) April 16, 2012 YS

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[1] (2011) VST 40 150 (A.P.)

M/s. Vpl Projects Pvt. Limited v. The Deputy Commissioner (Ct)

Case brief

What is this about?

What did the court decide?

M/s. Vpl Projects Pvt. Limited v. The Deputy Commissioner (Ct)

Case brief

What is this about?

What did the court decide?

What the court decided

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