ANAMOLU SESHAGIRI RAO Vs. STATE OF ANDHARA PRADESH

JUDGEMENT

(1.) The common question which arises for decision in these writ petitions is whether the contracts entered into by the petitioners with Southern and South Central Railways were contracts for sale of ballast or for work and labour.

(2.) The petitioners voluntarily submitted their returns for the years 1963-64 to 1969-70 without claiming any exemption, and assessments were made and the tax was paid. Later they claimed exemption for the year 1970-71 and some how it was granted. On that basis they claimed refund of the sales- tax already paid for the years 1963-64 to 1969-70 and their request was turned down by the Sales Tax authorities. The petitioners filed these writ petitions seeking a declaration that the collection of the tax is illegal and a direction for refund of the tax already paid. Since the common question arose in all the writ petitions, they were heard together by a Division Bench, which negatived the plea of the petitioners that the contracts were for work and labour (Vide A. Seshagiri Rao and Co. v. State of Andhra Pradesh^. The petitioners preferred appeals before the Supreme Court (Civil Appeals Nos. 1784 to 1787 of 1972). The Supreme Court by its judgment dated 18th August, 1978 set aside the order of the High Court and remanded the cases to the High Court for fresh disposal. The Supreme Courf, while remanding the cases, felt that the material placed before the High Court was not adequate to come to a decision as to the true nature of the contracts, and directed the High Court to dispose of the writ petitions in accordance with law after giving an opportunity to the parties to produce such further material as they think fit, including the contracts in their entirety. Their Lordships, however, did not express any opinion on the correctness or otherwise of the order of the High Court, but were pleased to set aside the same on the only ground that the material produced by the parties is not adequate for enabling the Court to come to a correct decision. Their Lordships further observed that it would be for the High Court, to decide on the entire material placed before it, whether the contracts were contracts for sale of ballast or for work and labour. Accordingly these writ petitions have come up before us for a fresh determination of the point involved. The additional material placed by the petitioners consists of the certificate issued by the Additional Chief Engineer (Construction), South Central Railway a printed book containing the Regulations for Tenders and Contracts, Condition of Tender, Agreement, Form and General conditions of Contract. The respondents in their turn have filed an additional counter-affidavit, a letter of the Commercial Tax Officer, Krishna West-II, Vijayawada, dated 4th August, 1978, addressed to the Senior Divisional Engineer, South Central Railway, Vijayawada, seeking clarification on certain points, and the reply to the same by the Division Engineer, South 1. (1973) 1 An. W. R. 111. Central Railway, Vijayawada. We shall refer to this additional material at the appropriate time while considering the nature of the contracts. 'Before doing so, it is necessary to refer to the definition of "works contract", and to some of the decided cases of the Supreme Court on this point, which lay down certain guidelines.

(3.) Clause (/) of section 2 (1) of the Andhra Pradesh General Sales Tax Act, reads as follows:- "Works contract' means any agreement for carrying out for cash, or for deferred payment, or for other valuable consideration, the constructions, fitting put, improvement of repair of any building, road, bridge or other immovable property or the fitting out, improvement or repair of any moveable property."