LAKSHMI KISAN INDUSTRIES Vs. STATE OF A.P.

JUDGEMENT

(1.) THESE 33 appeals are filed by different appellants questioning the respective orders of the revisional authority and the Appellate Deputy Commissioner, as the case may be, relating to the disputed turnovers involved in the assessment orders passed by the respective assessing authorities. The particulars of the appeals are as follows:

(2.) THE appellants in all the cases are dealers engaged in executing works contracts of different nature entered into with various contractors, of whom Visakhapatnam Steel Project is concerned in most of the cases. In such cases where the contractee is the Visakhapatnam Steel Project, the saw materials like angles, plates, sheets etc., were supplied by it to the concerned appellant who made use of such material in executing the works contracts mainly involving construction of structures, trusses sheds etc. and in some cases fixation of rolling shutters, windows and erection of cranes etc. In the matters concerned in T.A. Nos. 638/92 639/92, 640/92 and 641/92 where the disputed turnovers relate to supply and erection of cranes for which the material was purchased from outside the State, the appellant claimed exemption from local tax on the ground that the transactions amount to inter -State purchases which are not exigible to local tax. In the matters concerned in TA Nos. 634/93, 635/93 and 636/93, where a portion of the disputed turnover relates to supply of steel tubes and machinery parts, the appellant claimed similar relief on the ground that they were purchased from outside the State and so were not exigible to local taxes. The assessing authority as well as the Appellate Deputy Commissioner refused to accept such contention in the above said appeals and came to the conclusion that the transactions amount to local sales and the value of the cranes and steel tubes and machinery parts, as the case may be, is exigible to tax under the APGST Act. Regarding the matters in which the Visakhapatnam Steel Project had supplied the raw material like angles, plates, sheets etc., which were used by the appellants in the execution of the works contracts such as construction of structures, trusses etc., the appellants had raised the plea that the supply of such material by the Visakhapatnam Steel Project to them does not amount to sale, that they were supplied only on cost recovery basis and they performed some job work in erecting the structures etc., by utilising such material belonging to the Visakhapatnam steel project and that therefore the value of the goods utilised by them in executing the works cannot be assessed to tax as there is no sale of any such goods by them to the Visakhapatnam Steel Project which is the contractee. Such contention was however not accepted by the lower authorities who treated the supply of the material to the appellants by the Visakhapatnam Steel Project as amounting to sale and as such the value of the goods used by the appellants in the execution of the works contract is exigible to tax. The appellants in these cases have also raised an alternative plea, which is now the main plea in the present appeals, that even if the supply of the materials to them by the Visakhapatnam Steel Project is to be considered as sale, the value of such goods used by them in the execution of the works contracts cannot be assessed to tax as the sales effected by them to the Visakhapatnam Steel Project will amount to second sales within the State. The appellants in such of the cases where the materials were not supplied by the Visakhapatnam Steel Project but were purchased from other local registered dealers also raised the same plea of second sales regarding the value of such material used by them in the execution of the works contracts. The lower authorities, however, refused to accept such plea of second sales by coming to the opinion that the material such as angles, plates, sheets etc., supplied by the Visakhapatnam Steel Project to the appellants, or purchased by the appellants from other local registered dealers are different from the goods like structures, trusses, rolling shutters, windows etc., which were manufactured out of the raw material purchased by them and which have to be considered as commercially different commodities and as such the second sale exemption cannot be granted. In some matters the lower authority has treated such structures as fading under Third Schedule and therefore liable to be taxed at 4%. In some other cases the lower authorities treated such structures etc, as unclassified goods and subjected the respective turnovers relating to the value of such goods to tax at 5%, while in some other cases where the Visakhapatnam Steel Project was concerned the value of the goods like structures etc., was assessed to tax at the reduced rate of 4% in view of the relevant G.O. granting such reduced rate regarding sales made to Government Department. In T.A. 52/89 a turnover of Rs. 63,154/ - out of the disputed turnover of Rs. 5,69,512/ - was assessed to tax by the revisional authority (Deputy Commissioner) on the ground that it relates to sale of material and not labour charges. The balance disputed turnover of Rs. 5,06,358/ - relates to the value of goods used in the execution of works contract and which was assessed to tax by the revisional authority (Deputy Commissioner) by revising the orders of the assessing authority. In T.A. 72/93, 171/93 and 503/91 in which the appellant is the same, the Deputy Commissioner revised the orders of the assessing authority and withdrew the exemption on the respective disputed turnovers on the ground that they relate to the value of the goods supplied to the Visakhapatnam Steel Project in the execution of the works contracts and which is said to be exigible to tax. In T.A. 639/90, 640/90 and 636/90 the entire disputed turnover relates to the value of the goods used in the execution of works contract assessed to tax by the assessing authority and confirmed by the Appellate Deputy Commissioner, in TA Nos. 638/92, 639/92, 640/92 and 641/92 the present disputed turnovers relate to the value of the cranes supplied to the Visakhapatnam Steel Project and which was assessed to tax under the APGST and relating to which the assessing authority as well as the Appellate Deputy Commissioner rejected the claim of the appellants regarding inter -State purchases. Regarding the turnovers relating the value of the structures erected by the appellants out of the material supplied by the Visakhapatnam Steel Project, the Appellate Deputy Commissioner allowed the appeal and remanded the matter to the assessing authority for fresh disposal end the said remand orders are now not the subject matter of those appeals before us.

(3.) THE point that arises for consideration in the present appeals is whether the orders of the lower authorities regarding various items of the disputed turnovers are not valid and legal and are liable to be set aside?