VINAYAKA STEELS LTD. Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS is an appeal filed by M/s. Vinayaka Steels Limited, Ranigunj, Hyderabad against the revision orders of Joint Commissioner (CT), (Legal), Andhra Pradesh, Hyderabad in CCT's Ref.L.III(2)/637/2002, dated 28 -10 -2002 revising the Appellate Orders of Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad passed in Appeal No. P/237/2000 -01, dated 24 -7 -2000. The disputed turnover is Rs. 2,23,364/ -. The appellants are registered dealers on the rolls of Commercial Tax Officer, Ranigunj Circle, Secunderabad. For the assessment year 1996 -97 (APGST), the assessing authority passed the final assessment order after perusal of account books etc. The final assessment order is completed as follows:

(2.) AGGRIEVED by the above order, the assessee preferred appeal before the Appellate Deputy Commissioner (CT), Punjagutta Division, Hyderabad stating that the order passed by the assessing authority is unsustainable in respect of disallowing the claim of set off of tax to the extent of Rs. 4,55,413/ - on Sponge Iron. It is argued before the Appellate Authority that in terms of G.O. Ms. No. 762, Revenue, dated 21 -8 -1990 read with G.O. Ms. No. 130, dated 14 -2 -1989, the sponge iron is a form of Melting Scrap classifiable under Entry 2 -A of the Third Schedule to the APGST Act, 1957 and hence they are entitled for set off of tax. After hearing the arguments, the learned Appellate Authority agreed with the contentions raised by the appellant and allowed the set -off on the purchase of Sponge Iron, since it already suffered tax from the previous dealer i.e., Sponge Iron India Limited, from whom the appellant purchased Sponge Iron. But the Revisional Authority i.e., Joint Commissioner (CT), Legal, Andhra Pradesh, Hyderabad in pursuance of the powers conferred under Section 20(2) of the APGST Act disagreed with the orders passed by the Appellate, took suo motu revision and issued show cause notice to the appellant Authority, calling for their objections for disallowing the set -off of tax on Sponge Iron allowed by the Appellate Authority. After waiting for some time, as the appellant failed to file objections and avail the opportunity confirmed the proposal in the pre -revision show cause notice and restored the order of the Commercial Tax Officer. Hence, the present appeal.

(3.) AT the time of hearing of the appeal, it has been contended by the learned Authorized Representative for the appellant that the Joint Commissioner erred in holding that Sponge Iron is not a form of pig iron or iron scrap. It is further contended that in view of the circular issued by the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad on 17 -9 -1985 observing that Sponge -Iron is nothing but Pig -iron, it shall be treated as Iron Scrap or Pig iron coming under Entry 2 or Entry 2 -A of the Third Schedule of the APGST Act. Since tax has been paid by their dealer on the Sponge Iron purchased by them, the appellant is entitled to set -off. On the other hand, the State Representative appearing for the Respondent supported the order of the Revisional Authority.