UNITY INFRA PROJECTS LTD Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) THE Petitioner company is a registered VAT dealer, as well as a CST dealer, under the provisions of the Andhra Pradesh Value Added Tax Act, 2005 (the VAT Act, for brevity), on the rolls of the first Respondent. It is a civil contractor undertaking works contracts in different States of the country. It undertook construction of permanent shelters under Tsunami Reconstruction Project in Andaman & Nicobar Islands. It also undertook construction of the Tadipudi Lift Irrigation Scheme (2nd lift) and the construction of 4 numbers of Lift Irrigation Schemes at KM 500, 15.90 KM 33.50 and KM 80.80 of Main canal of Tadipudi L Scheme in West Godavari District (Package 60). This was stately sub -contracted to M/s. Indu Projects (a registered VAT dealer) on back to back basis retaining only 4% margin. It appears the sub -contractor filed returns disclosing the turnover relating to the sub -contracted works. For the assessment year 2007 -08, the Petitioner, in its returns in Form VAT 200, claimed exemption on the sub -contractor's turnover under Section 4(7)(h) of the VAT Act and Rule 17(1)(c) of the Andhra Pradesh Value Added Tax Rules, 2005 (the VAT Rules, for brevity).

(2.) THE second Respondent audited the Petitioner's premises and, thereafter, initiated assessment proceedings by issuing notice in Form VAT 305 -A, dated 16.04.2010 proposing to assess the Petitioner company, on the works contract receipts, to a tax of Rs. 22,54,392/ - under Section 4(7)(a) of the VAT Act read with Rule 17(1)(g) of the Rules. The Petitioner submitted its explanation on 13.05.2010. The Petitioner also asked for an opportunity of personal hearing. The second Respondent, thereafter, undertook assessment and passed orders in Form VAT 305, dated 28.07.2010 proposing to levy tax at 4% on the turnover towards iron and steel for the period from April, 2007 to March, 2008 for the assessment year 2007 -08. Assailing the same, the Petitioner filed the instant writ petition for a writ of Certiorari.

(3.) THE counsel for Petitioner Dr S.R.R. Vishwanath made four submissions. First, though the Petitioner specifically requested for a personal hearing the same was denied and, therefore the impugned assessment order is void as it is in violation of principles of natural justice. Secondly, the impugned assessment also denies adequate opportunity in that tax is levied on a taxable event which was not informed in the show cause notice. Thirdly, the Petitioner's purchase of iron and steel from M/s. Mohsin Brothers, Bhushan Steels Limited, Kirit Trading Company and Sai Plastic Industries is covered under declarations in Form 'C' issued by the Petitioner, that iron and steel was transported by sea to Andaman & Nicobar for the Tsunami Reconstruction Project and, therefore the taxable event is not established and, lastly, the impugned assessment order is violative of fundamental rights under Article 19(1)(g) of Constitution of India. All these averments are refuted by the Respondents' Special Counsel.