SRI LAKSHMI CONSTRUCTIONS Vs. THE APPELLATE DEPUTY COMMISSIONER

JUDGEMENT

(1.) In this Writ Petition, the petitioner questions the order passed by the Appellate Deputy Commissioner dated 26.07.2016, dismissing the appeal preferred by the petitioner against the assessment order dated 29.03.2014, for the tax period 2010-11 to 2012-13 under the Andhra Pradesh Value Added Tax Act ("the Act" for brevity), as arbitrary and illegal.

(2.) Dr. T.Ramesh Babu, learned counsel for the petitioner, would question the validity of the order passed by the Appellate Deputy Commissioner on the following grounds i.e., (1) since the petitioner entered into a composition scheme long prior to 14.09.2011, from which date the amended Section 4(7)(b) of the Act came into force, they are liable to be subjected to tax only at 4% for the entire duration of the work; and the respondents were not justified in levying tax at 5% relying on an amendment made subsequent to the date on which the petitioner had exercised their option for composition under Section 4(7)(b) of the Act; (2) though the amendment of Section 4(7)(b), in so far as it related to an increase in the rate of tax from 4% to 5% was published in the A.P. Gazette only on 20.04.2012, the increase in the rate of tax from 4% to 5% was applied retrospectively from 14.09.2011, adversely affecting the petitioner's vested rights; and (3) since the assessing authority could only have levied tax on the value of the goods involved in the execution of the works contract, the words "total amount received or receivable", used in Section 4(7)(b), cannot be so construed as to enable the assessing authority to levy tax on the tax component of the sale consideration.

(3.) On the other hand Sri J.Anil Kumar, learned Special Standing Counsel for Commercial Taxes, would submit that the rate of tax, specified in Section 4(7)(b) of the Act, was increased from 4% to 5% by Andhra Pradesh Ordinance No.9 of 2011 and Act 12 of 2012, subsequent to Ordinance No.7 of 2011 and Act 21 of 2011 whereby Section 4(7)(b) of the Act was substituted in its entirety; and, in the light of the later Ordinance and the amended Act, the amended Section 4(7)(b) of the Act must be read as prescribing the rate of tax of 5%, and not the earlier 4% as contended by the petitioner; the vires of Ordinance No.9 of 2011 and Act 12 of 2012, whereby the increase in the rate of tax was made applicable with retrospective effect from 14.09.2011, has not been subjected to challenge in this Writ Petition; it is, therefore, not open to the petitioner to request this Court not to give the provision retrospective effect; as Section 4(7)(b) of the Act uses the words "total amount received or receivable", and since VAT collected by the petitioner from the contractee is included in the consideration received or receivable by them, the respondents were justified in levying tax on the total amount received or receivable, even if it includes the tax component also; and if the petitioner was not inclined to continue under the composition scheme, stipulated under Section 4(7)(b) of the Act, they could have resiled therefrom and could have chosen, instead, to subject themselves to tax under Section 4(7)(a) of the Act.