PEST CONTROL PVT LTD Vs. ASSISTANT COMMISSIONER

JUDGEMENT

(1.) M/s. Pest Control (India) Pvt. Ltd., an incorporated entity having head office at Mumbai, is a Valued Added Tax (VAT) dealer on the rolls of the second respondent. The Assistant Commissioner (Investigation) - first respondent herein; on verifying the records assessed output tax under Andhra Pradesh Value Added Tax Act, 2005 (VAT Act) for the periods 2006-07, 2007-08, 2008-09 and 2009-10 and issued a notice. The petitioner submitted explanation inter alia contending that the "pest control services" are not liable to sales tax. They relied on the decisions of Kerala and Patna High Courts as well as the decision of Supreme Court in State of Himachal Pradesh v. Gujarat Ambuja Cements, (2005) 142 STC 1. The first respondent allegedly considered the explanation submitted by the petitioner on two occasions during the assessment proceedings, rejected the objections raised and came to the conclusion that the transactions of pest management solutions provided by the petitioner are liable to tax under Section 4(7)(a) of VAT Act as works contracts and accordingly levied the tax. Four different orders as detailed hereinbelow were passed which are challenged in these writ petitions.

(2.) DURING the preliminary hearing on 22.11.2010, we were very concerned about the way the Assessing Officer under VAT Act considered the matters while exercising quasi judicial functions. The law laid down by the Supreme Court as well as this Court with regard to the approach to be bestowed by the Assessing Officers while assessing the sales tax or VAT were followed more in breach. The basic principles of quasi- judicial exercise and drafting of order were ignored. We therefore summoned the Assistant Commissioner of Commercial Taxes (Investigations), Mr. Rajasekhar, and also expressed the Court's displeasure for the way the officer dealt with the matter.