2001 (11) TMI 1005 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the legality of G.O. Ms. No. 739 dated October 17, 2000 superseding G.O. Ms. No. 187 dated April 3, 2000 with retrospective effect.

Analysis:
The petitioner, a registered dealer under the Andhra Pradesh General Sales Tax Act, sought a writ of mandamus to declare G.O. Ms. No. 739 dated October 17, 2000 as illegal. The petitioner claimed entitlement to a reduction of tax paid on cement purchases exceeding 4% for works contracts executed between April 3, 2000, and October 31, 2000. The Government had earlier issued G.O. Ms. No. 187 dated April 3, 2000, allowing such reduction. However, G.O. Ms. No. 739 dated October 17, 2000 retrospectively nullified this benefit, leading to the petitioner's challenge.

The petitioner contended that the retrospective withdrawal of benefits by the executive through subordinate legislation was impermissible. The High Court considered a similar issue in a previous case and held that while benefits could be withdrawn prospectively, retrospective withdrawal was beyond the executive's power. Accordingly, the Court declared the withdrawal of benefits under G.O. Ms. No. 187 dated April 3, 2000, by G.O. Ms. No. 739 dated October 17, 2000, as ultra vires. The Court emphasized that such powers were not available to the executive, thereby allowing the writ petition.

The Court directed the assessing authority to reassess the tax liability for the assessment year 2000-2001, granting the petitioner benefits for the period from April 3, 2000, to October 31, 2000, as per G.O. Ms. No. 187 dated April 3, 2000. The Rule nisi was made absolute, and the writ petition was allowed, providing relief to the petitioner by declaring G.O. Ms. No. 739 dated October 17, 2000, as ultra vires to the extent of retrospectively withdrawing benefits available under G.O. Ms. No. 187 dated April 3, 2000.