GMMCO LIMITED Vs. STATE OF AP

JUDGEMENT

(1.) This revision, under Section 22(1) of the APGST Act, 1957, is preferred against the order of the Sales Tax Appellate Tribunal in T.A. No.376 of 2006 dated 22.12.2006.

(2.) Facts, to the extent relevant, are that the petitioner is an authorized dealer and service agent of Caterpillar Inc, USA, who are the manufacturers of earth moving equipment. For the year 2001-2002, the petitioner merely sold spare parts of earthmoving machinery, and not backhoe loader equipment. They filed their returns on the basis that the spares of earthmoving equipment fell under Entry 83 of the First Schedule to the APGST Act, and as taxable at the rate of 8%. On the sale of spares to M/s. Singareni Colleries Company Limited (SCCL), the petitioner claimed the benefit of concessional rate of tax of 4% against certificates in terms of G.O.Ms. No.694 dated 10.09.1998. The Commercial Tax Officer, by his assessment order dated 30.09.2004, levied tax on the spare parts at 8%. He also accepted the certificates issued by SCCL, and extended to the petitioner the benefit of concessional rate of tax.

(3.) The Deputy Commissioner issued a revision show cause notice dated 11.11.2005 proposing to enhance the rate of tax on the entire turnover to 13%. The petitioner submitted their reply thereto vide letter dated 23.12.2005. The Deputy Commissioner, by his order dated 31.03.2006, confirmed the levy raising a demand of Rs.1.08 crores on the ground that the petitioner had not produced their books of accounts to establish that they had not dealt in motor vehicles. Relying on the judgment of the Supreme Court, in Bose Abraham v. State of Kerala1, the Deputy Commissioner held that the goods sold by the petitioner were backhoe loaders, when in fact the petitioner had only sold spare parts of the said equipment during the year 2001-2002. In respect of the turnover relating to sale of spares to SCCL, the Deputy Commissioner held that the items sold by the petitioner were covered by Entry 1 of the First Schedule to the APGST Act. Consequent thereto, the Commercial Tax Officer gave effect to the order of the Deputy Commissioner.