KEC INTERNATIONAL LIMITED Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) These two tax revision cases under Section 22(1) of the Andhra Pradesh General Sales Tax Act, 1957 (the Act) are against the common order dated 20.2.2009 in T.A.Nos.671 and 672 of 2005 passed by the Sales Tax Appellate Tribunal, Hyderabad (STAT). The petitioner and the question involved being common, the two cases are being disposed of by this order. The petitioner is a works contracts company. They are registered dealers on the rolls of the Commercial Tax Officer (CTO)-III, Kurnool under the Act. Their turnover has to be charged to sales tax under Section 5 read with Section 5F of the Act. They however opted for composition of tax payable under Section 5F of the Act. Such benefit is available under Section 5G of the Act. During the assessment years 1998-1999 and 1999-2000, the petitioner executed electrical contracts with the Andhra Pradesh State Electricity Board (APSEB). The CTO-III completed the assessment on 22.1.2001 duly allowing composition and levied the tax accordingly.

(2.) The petitioner was granted certificate in Form-L1 on 26.12.1998 issued under Rule 6B of the Andhra Pradesh State General Sales Tax Rules, 1957 (the Rules) which was extended from time to time. The CTO however on 14.12.2001 cancelled the certificate in Form-L1 on the ground that the petitioner is not eligible to opt for composition in relation to electrical works contracts. Consequently, the CTO revised the assessment on 29.12.2001 holding that the petitioner is not eligible for composition scheme. On appeal before the Appellate Deputy Commissioner (ADC) the petitioner was successful. The appellate order dated 21.3.2002, however, was revised under Section 20(1) of the Act by the Joint Commissioner (Legal) on 19.8.2004 and held that the L1 certificate issued to the petitioner was void ab initio in view of Section 5G of the Act.

(3.) Feeling aggrieved, the petitioner filed T.A.No.671 of 2005 relating to the assessment year 1998-1999 and T.A. No. 672 of 2005 relating to the assessment year 1999-2000. The STAT dismissed both the appeals holding that L1 certificate had been mistakenly issued; it is void an initio and non-est in the eye of law and therefore its retrospective cancellation is only a formality. The petitioner, therefore, filed T.Rev.C.No.144 of 2010 against T.A.No.671 of 2005 and T.Rev.C.No.70 of 2010 against T.A.No.672 of 2005.