Case Law Details
Quantum Engineers Vs State of Andhra Pradesh (Andhra Pradesh High Court)
Andhra Pradesh High Court addressed a tax revision petition filed by Quantum Engineers challenging the VAT Appellate Tribunal’s decision that upheld earlier orders imposing a 14.5% tax rate on inter-state sales due to non-submission of ‘C’ forms. Quantum Engineers, a business dealing in machinery spares and safety equipment, argued that the disputed sales involved cotton/hosiery hand gloves taxed at 4% under Schedule IV of the VAT Act, 2005. Since no exemption was claimed, the petitioner contended that ‘C’ forms were irrelevant. Despite this, the authorities assessed the sales at 14.5%, leading to multiple appeals, all dismissed before reaching the High Court.
The High Court found that the authorities and the Tribunal failed to properly evaluate the applicability of the 4% tax rate under the schedule. Observing that ‘C’ forms are only required for exemption claims, the court concluded that the petitioner had complied with tax obligations under the Act. Consequently, the court set aside the Tribunal’s order and remanded the case to the assessing authority for fresh evaluation. The assessing authority has been directed to resolve the matter within four weeks, ensuring the petitioner is given an opportunity for a hearing.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
1. The present revision is filed aggrieved by the order dated 14.06.2024 in TA No.42 of 2019, on the file of Andhra Pradesh VAT Appellate Tribunal, Visakhapatnam, which confirmed the order passed by the Appellate Deputy Commissioner in turn confirming the order of passed by assessing authority made under Central Sales Tax Act, 1956.
2. The case of the petitioner is that he is an assessee on the rolls of Commercial Tax Officer (CTO), Suryabagh Circle, Visakhapatnam. The petitioner is carrying on the business of reselling of machinery spares and safety equipment and effecting sales both within the State of Andhra Pradesh and outside the state. The adjudicating authority called for books of accounts to take-up the assessment for the period 2012-2013. Accordingly, the petitioner submitted the books of accounts.
3. After hearing the matter, the assessing authority, upon verification of the documents produced by the petitioner, recorded that the petitioner made inter-state sales of safety equipment without the ‘C’ form, for an amount of Rs.12,89,070/-and in the absence of furnishing the ‘C’ form, the assessing authority levied the tax at the rate of 14.5%. The said order was challenged by filing an appeal before the Appellate Deputy Commissioner. After hearing the appeal, vide Appeal No.VSP/32/2017-2018, the Appellate Deputy Commissioner, Vijayawada, confirmed the order of assessment by order dated 30.07.2018.
4. Aggrieved by the said order, the petitioner filed Appeal vide TA No.42/2019 before the Andhra Pradesh VAT Appellate Tribunal, Visakhapatnam. The Tribunal also confirmed the orders of the authorities below, which are being impugned in the instant Tax revision petition.
5. The counsel for the petitioner submits that the goods sold by him are hand gloves made of cotton/Hosiery cloth for which he has collected tax at the rate of 4% as per entry 34 of schedule (4) of VAT Act, 2005. Therefore the question of furnishing the ‘C’ forms as against the said goods does not arise inasmuch as the statue prescribes tax at the rate of 4%. In other words ‘C’ forms would be submitted for claiming exemption, but in the instant case, no such exemption was claimed by the petitioner, since he has paid the tax at the rate of 4% as per the entry 34 schedule (4).
6. Heard learned counsel for the petitioner and the learned Assistant Government Pleader for Commercial Taxes.
7. On perusal of the record, it shows that the petitioner had paid tax in accordance with the schedule of the Act from the beginning and has never claimed any exemption through ‘C’ Therefore, the question of submitting the ‘C’ forms for the goods in dispute does not arise. The authorities below and also the Appellate Tribunal, did not consider the petitioner’s case in its the proper prospective.
8. On perusal of the orders passed by the authorities and as well as the Tribunal, it is succinctly clear that without going into the aspect of rate of tax as against the goods dealt by the assessee of the authorities including the Tribunal must directed with the issue on hand and passed orders under challenge mulcting the assessee to pay tax at the rate of 14.5%, since he did not produce the ‘C’ As discussed supra, the furnishing of ‘C’ forms would arise only when the assessee is claiming exemption. But in the instant case he has paid tax as per the schedule appended to the Act for the goods viz., hand gloves.
9. In that view of the matter, the orders of the Tribunal and also the order of the Appellate Deputy Commissioner and Assessing Authority are set aside, and the matter is remanded to the Assessing Authority to take-up the assessment afresh and pass appropriate orders, after giving opportunity of being heard to the petitioner and the same has to be completed within a period of four (04) weeks from the receipt of copy of this order.
10. Accordingly, the Tax Revision is allowed. No costs.
11. As a sequel thereto, the miscellaneous petitions, if any, pending in this appeal shall stand closed.
Author Bio
