AMPOWER EQUIPMENT Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) THIS is an appeal filed against the Revisional orders of Additional Commissioner (CT), O/o The Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad in CCTs Ref. No. LIII/504/99 -2, dated 16 -11 -2002. The appellant is M/s. AMPOWER Equipment, A.C. Guards, Hyderabad. It is on the rolls of Commercial Tax Officer, Agapura Circle, Hyderabad. The business premises were inspected by the Commercial Tax Officer -VII, (Intt.), Enforcement Wing on 18 -9 -2006. It was observed by the inspecting authority that the assessee paid concessional rate of tax on sales of generator sets, chemical storage tanks, spares of machinery etc., at 3% on the plea that the consignee of the assessee is a registered dealer have furnished declarations as per G.O.Ms. No. 1272, dated 31 -12 -1994. The Commercial Tax Officer, Enforcement Wing observed the concessional rate of taxation is not applicable to the generators dealt by the appellant since the item generators has been specifically included in Item 1038 of the First Schedule to the APGST Act liable to tax at 16%. Apart from it, it was also found that the assessee paid 6% only on the turnover of supply, erection and commissioning of diesel generator sets to their customer, instead of making the payment ((THELAW)) 16%. Hence, after issuing show cause notice, provisional assessment order was passed on 12 -11 -1996 and after hearing the objections of the assessee, levied tax @ 16% on the sales of generators as well as on the turnover of supply, erection and commissioning of diesel generators of the customers of the appellant. Aggrieved by the same appeal had been preferred before the Appellate Deputy Commissioner, Secunderabad Division, Hyderabad. The Appellate Deputy Commissioner allowed the appeal and remanded the matter holding that the sale turnover of generator sets are exigible tax at 3% only and also observing that erection, commissioning and supply of generators would involve works contract, exigible to tax under Section 5Fof the APGST Act.

(2.) THE Additional Commissioner (CT) (Legal), O/o the Commissioner of Commercial Taxes, Andhra Pradesh, Hyderabad by -virtue of powers under Section 20(2) having observed that the order passed by the Appellate Deputy Commissioner and as well as final orders passed by the Commercial Tax Officer are prejudicial to the interests of revenue, issued show cause notice proposing to levy tax at 16% only on both these counts calling for the objections of the appellant. After receiving the objections and after hearing the Authorized Representative of the appellant, the Revisional Authority confirmed the proposal made in the revision show cause notice, holding that both these turnovers are exigible to tax at 16%. Aggrieved by the same, the present appeal has been preferred. In the appeal grounds, it has been contended by the appellant disputing the turnovers as follows:

(3.) AT the time of hearing of the appeal, the learned counsel for the appellant submitted that the Additional Commissioner erred in levying tax holding that the appellant sold the generators and the work executed is incidental to the pre -transaction sale of generators. It is stated that the agreements entered with NABARD and other agencies by the appellant clearly indicate that the appellant has to execute civil works for fixation of generators providing technical assistance, laying of cement concrete bed for safe fixation of engine and alternator, provision of earth pits (including earth work -excavation of earthing pits & refilling the same) connecting cables, fixing of panel boards etc., Exhaust outlet fixation inclusive of supply of suitable MS Pipe, Asbestos insulation and fixation of exhaust silencer; Grouting of fuel tank on suitable rigid MS stand and laying fuel lines between engine and fuel tank and return lines; Supply and fixing the engine and alternator on suitable anti -vibration/cushy months for absorption of vibration; supply and fixation of suitable charged battery along; with stand and interlinking cable; Electric power for welding jobs and water for curing the PCC Bed; and also furnish of guarantee for its commissioning and continue to furnish the guarantee for certain period. Hence, practically speaking, the agreements with the customers of the assessee by the appellant for execution of works contract in which supply of Engine Alternator or Generator is incidental to the works contract and therefore the said turnover is exigible to tax at 6% under Section 5F. It is also contended that the appellant had separately shown the sale turnover relating to other customers and the customers, with which the appellant entered into agreement contracts.