M/s.Carrier Airconditioning & Refrigeration Limited, Hyderabad v. The Joint Commissioner of Commercial Taxes (CT) (Legal), Nampally, Hyderabad

THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No.32801 of 2010 ORDER: (Per Hon’ble Sri Justice Ramesh Ranganathan) The order under challenge in this writ petition is the one passed by the first respondent dated 25.11.2010 whereby the petitioner’s revision, against the order of rejection of stay by the second respondent dated 25.10.2010, was dismissed. The petitioner, a company registered under the Companies Act, 1956, is a dealer registered with the third respondent both under the provisions of the Andhra Pradesh Value Added Tax Act, 2005, and the Central Sales Tax Act,

1956. It is engaged in the business of supply of air conditioners and AMC execution of works contracts. For the assessment year 2008-2009, the third respondent levied tax on the sale of air conditioners of Rs.6,11,28,708/- at 12.5% for Rs.76,41,089/- and, on the sale of copper tubes/pipes etc., of Rs.2,31,105,985/- at 4% for Rs.9,24,239/-. The total tax due and payable by the petitioner was determined at Rs.82,65,328/- and, after deducting the tax paid, the petitioner was called upon to pay the balance tax at Rs.51,95,940/-. Aggrieved thereby, the petitioner preferred an appeal before the second respondent. Along with the appeal, they also filed an application seeking stay of the order of the third respondent pending disposal of the appeal. By order dated 25.11.2010, the second respondent dismissed the stay application on the ground that the evidence, to support the petitioner’s plea, had not been submitted.

Aggrieved thereby, the petitioner preferred a revision to the first respondent on 09.11.2010. The first respondent, in his order dated 25.11.2010, noted the petitioner’s contention that the assessing authority had erroneously levied tax on the receipts relating to annual maintenance contracts of air conditioners treating them as sales turnover, and not as works contracts; and, as they had opted for payment of tax by way of composition, the turnover of Rs.6,11,28,708/- relating to annual maintenance contract should be taxed only at 4%. The first respondent observed that the third respondent, while proposing levy of tax on the entire turnover at 12.5% treating it as relating to sales of air conditioners had, after examining the objections filed by the petitioner, levied tax only at 4% on the turnover of Rs.2,31,05,985/-, and it is only with regards the turnover of Rs.6,11,28,708/-, that the assessing authority had held that it related to the sales turnover of air conditioners.

The first respondent further held that the petitioner did not file any evidence to show that the disputed turnover did not represent sale of air conditioners, and it related only to annual maintenance contracts. The order of the first respondent, exercising discretion not to grant stay, is a reasoned order. The view taken by the first respondent cannot be said to be perverse necessitating interference by this Court in the proceedings under Article 226 of the Constitution of India. We, however, refrain from making any observation on the merits in as much as the substantive appeal is still pending on file of the second respondent. Ends of justice would, therefore, be met if the second respondent is directed to dispose of the appeal itself within a period of two weeks from today. There shall be a direction to the second respondent accordingly. Sri P.Balaji Verma, the learned Special Standing Counsel, undertakes to inform the second respondent of his obligations under this order. Subject to the above observations the writ petition fails and is, accordingly, dismissed. However, in the circumstances, without costs. _______________ (V.V.S.RAO, J ______________________________ (RAMESH RANGANATHAN, J January 21, 2011 NOTE: Disptach order copy today. (By order) YS