HC denied to examine assessment orders terming them wholly unnecessary.

Facts in Brief:

1. All the petitioners have executed turnkey projects for different customers. They claimed that the goods supplied by them, for being used in the turnkey projects, were subsequent sales exempt from tax under Section 6(2) of the CST Act, import sales under Section 5(2) of the CST Act, and the respondents lacked jurisdiction to subject these transactions to tax under the AP VAT Act treating them as intra-state sales.

2. On their claim being negatived by the assessing/revisional authorities they have invoked the certiorari jurisdiction of this Court. It would suffice to note the contents of the assessment order passed in W.P. No.8006 of 2009 as illustrative of the orders impugned in these Writ Petitions.

HC held as under,

3. While the submissions, urged on behalf of the petitioners, that the supply and erection contracts are divisible and independent contracts, and they are entitled to claim exemption under Section 6(2) of the CST Act, necessitate rejection, their contention that the subject sales/deemed sales fall within the ambit of Section 3(a) and 5(2) of the CST Act must be upheld. As the provisions of each contract differ from the other and, even for one assessment period, the petitioners have entered into more than one contract, we have refrained from burdening this already lengthy judgment with a reference to the relevant clauses in each individual contract.

4. We consider it appropriate, instead, to set aside the assessment/revisional orders to the limited extent the turnover, relating to inter-state sales and import sales under Sections 3 and 5 of the CST Act, have been subjected to tax under the AP VAT Act. The assessing/revisional authorities shall, in the light of the observations made hereinabove, pass orders afresh and in accordance with law, after affording the petitioners an opportunity of a personal hearing.

5. It is only on account of the pendency of these Writ Petitions before this Court that the petitioners were disabled from preferring appeals, against the impugned orders, in so far as the other issues which arise for consideration therein are concerned. There is no provision either under the A.P. VAT Act or under the Writ Proceedings Rules which enable the petitioners to simultaneously invoke the jurisdiction of the High Court and the statutory appellate authorities against the very same assessment/revisional orders, albeit on different grounds.

6. That would, however, not justify this Court taking upon itself the task of examining all the issues, which arise for consideration from the impugned orders, merely because the Writ Petitions were entertained on the plea that a part of the assessment/revisional orders suffered from a jurisdictional error.

7. All the Learned Senior Counsel, and the Learned Counsel, appearing on behalf of the petitioners would submit that, since the petitioners have confined their submissions only with reference to Sections 3 to 6 of the CST Act, and the Writ Petitions were admitted only on this score, they should be permitted to contest all other issues by way of statutory appeals under the AP VAT Act.

8. The Learned Advocate General for the State of Telangana, Sri K. Vivek Reddy, Learned Special Counsel and Sri S. Suribabu, Learned Special Standing Counsel for Commercial Taxes, would fairly state that, in case the petitioners were to avail the remedy of an appeal to the appellate authority/STAT within four weeks from today, the respondents would not object to the appeals being entertained and decided on merits, notwithstanding that the time stipulated under the Act, for preferring appeals, has expired long ago.

9. It is wholly unnecessary for us to examine the assessment/ revisional orders, with regards imposition of tax on various other items, as this Court made it clear, even when the hearing of these Writ Petitions commenced, that it would confine its examination to the contentions raised, in this batch of Writ Petitions, only regarding levy of tax, under the A.P. VAT Act, on the sale of goods which the petitioners claimed were transit sales, inter-state sales, high sea sales and import sales; and whether they could be subjected to tax, by the respondents, treating them as intra-state sales taxable under the A.P. VAT Act.

10. In Zunaid Enterprises47, the Supreme Court permitted the assessees, in the appeals/applications filed before it, to file appropriate appeals/revisions before the appellate/revisional authorities within a month; and directed that, if such appeals/revisions were filed within the time granted, the appellate /revisional authorities should dispose of the appeals/revisions on merits, without reference to the period of limitation.

11. We are satisfied that ends of justice would require the exercise of our extra-ordinary jurisdiction under Article 226 of the Constitution of India, (which, in L. Chandra Kumar v. Union of India, has been held to be a part of the basic structure of the Constitution of India), to direct the appellate authorities/STAT, in case appeals are filed by the petitioners herein within four weeks from today, to entertain them despite expiry of the period of limitation for filing appeals under the Act. All the Writ Petitions are disposed of accordingly. The miscellaneous petitions pending, if any, shall also stand disposed of. No costs.

Case Reference - M/S.Larsen And Toubro Ltd vs 1. State Of Andhra Pradesh Rep.