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2012 (7) TMI 859 - HC - VAT and Sales TaxRefund of the tax deducted from the amounts due from APGENCO to the petitioner and deposited to the Revenue by way of TDS - Held that - We are of the considered view in the circumstances that the impugned orders are passed by the first respondent not only in disregard of the order of the Appellate Deputy Commissioner but also in careless exercise of jurisdiction and without due consideration of the findings recorded by the appellate authority vide his order dated October 27, 2011. In the circumstances, the writ petitions are allowed with costs. The impugned orders of the first respondent, all dated January 23, 2012 are quashed and the Revenue-Commercial Tax Department is directed to refund the amount of tax deposited by the APGENCO by way of TDS, deducted from the bills payable by the APGENCO to the petitioner, in respect of the assessment years 2007-08, 2008-09 and 2009-10, within four weeks from the date of receipt of a copy of this order. Costs of ₹ 10,000 (ten thousands) in each of the writ petitions are awarded, payable by the State to the petitioner, also within four weeks from the date of receipt of a copy of this order. Writ petitions allowed
Issues involved: Assessment of tax liability, refund of tax deducted at source (TDS), forfeiture of TDS amounts, disregard of appellate order, jurisdiction of the first respondent.
Analysis: The High Court of Andhra Pradesh considered three writ petitions with identical issues for adjudication. The petitioner, a public sector company engaged in erection and commissioning of power plants, claimed exemption from tax liability as its business involved purely labor-oriented jobs without material transfer. The petitioner paid service tax on its entire receipts and was a registered dealer under the Andhra Pradesh Value Added Tax Act, 2005. The dispute arose when the contractee, Andhra Pradesh Power Generation Corporation (APGENCO), deducted tax at source (TDS) from the bills payable to the petitioner, leading to a refund claim by the petitioner due to non-taxable turnover. The Commercial Tax Department initially forfeited the TDS amounts, prompting the petitioner to file writ petitions seeking refund. The Appellate Deputy Commissioner, Kurnool, concluded that the petitioner's contract was solely labor and service-based, not involving any material transfer, and set aside the forfeiture order due to lack of reasoning by the first respondent. However, upon remand, the first respondent again forfeited the tax amounts, disregarding the appellate order's findings. The court noted that the impugned orders were passed without due consideration of the appellate authority's decision, indicating a careless exercise of jurisdiction by the first respondent. The court, after hearing arguments from both parties, found that the impugned orders were in clear transgression of the appellate order and lacked proper consideration. The Special Government Pleader for Commercial Taxes also conceded the flawed nature of the orders. Consequently, the court allowed the writ petitions, quashed the impugned orders dated January 23, 2012, and directed the Revenue-Commercial Tax Department to refund the TDS amounts deposited by APGENCO to the petitioner for the assessment years 2007-08, 2008-09, and 2009-10 within four weeks. Additionally, costs were awarded to the petitioner, emphasizing the disregard of the appellate order and the need for proper jurisdiction in tax matters. In conclusion, the court's decision highlighted the importance of adhering to appellate orders, ensuring a fair and reasoned approach in tax assessments, and upholding the rights of taxpayers in refund claims, particularly in cases of TDS deductions and forfeiture actions by tax authorities.
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