VAT composition exemption requires genuine subcontractor status; suppression of material facts also defeats writ relief.

Section 4(7)(d) of the A.P. VAT Act grants composition treatment only to a dealer engaged in construction and sale of specified property, and the proviso exemption is available only where the claimant is a genuine sub-contractor of a contractor who validly exercised that option. On the facts, the petitioner was treated as a contractor under composition, not as a sub-contractor, and its own filings supported that position. The assessment was also held consistent with Article 265 and not vitiated by natural justice concerns because notice was served and no reply was filed. The writ remedy was refused due to suppression of material facts and lack of full disclosure.

---

---

Issues: (i) Whether the assessment of the petitioner under Section 4(7)(b) of the A.P. VAT Act, 2005, and not under Section 4(7)(d) or Section 4(7)(a), was illegal or void ab initio and whether the petitioner was entitled to the proviso-based exemption as a sub-contractor; (ii) Whether the assessment order violated Article 265 of the Constitution of India or the principles of natural justice; (iii) Whether the writ petition was an abuse of the process of court because of suppression and misrepresentation of material facts.

Issue (i): Whether the assessment of the petitioner under Section 4(7)(b) of the A.P. VAT Act, 2005, and not under Section 4(7)(d) or Section 4(7)(a), was illegal or void ab initio and whether the petitioner was entitled to the proviso-based exemption as a sub-contractor.

Analysis: The composition scheme under Section 4(7)(d) applies only to a dealer engaged both in construction and sale of residential apartments, houses, buildings or commercial complexes. The petitioner's documents showed SRMT as the contractee and owner, and the petitioner as contractor or builder, not as a sub-contractor. No material established that SRMT was itself a dealer engaged in both construction and sale of residential apartments or that SRMT had exercised composition under Section 4(7)(d) for the specific work. The exemption in the proviso to Section 4(7)(d) is available only to a sub-contractor of a works contractor who has validly exercised that option. The petitioner also filed Form VAT 250 and returns on a composition basis and could not, after seeking composition, contend that it should instead be assessed under Section 4(7)(a).

Conclusion: The petitioner was not entitled to exemption under Section 4(7)(d) and was rightly assessed under the composition provisions applicable to works contracts. This issue was decided against the petitioner.

Issue (ii): Whether the assessment order violated Article 265 of the Constitution of India or the principles of natural justice.

Analysis: Article 265 bars tax without authority of law, but the assessment was made under the statutory provisions and rules governing VAT composition. The record showed that the show-cause notice was served on the petitioner, but no reply was filed before the assessment order. On those facts, the plea of denial of natural justice could not be sustained. The assessment was, therefore, not shown to be unconstitutional or procedurally invalid on these grounds.

Conclusion: The assessment order did not contravene Article 265 and was not passed in violation of natural justice. This issue was decided against the petitioner.

Issue (iii): Whether the writ petition was an abuse of the process of court because of suppression and misrepresentation of material facts.

Analysis: The record showed a pre-assessment no-objection letter, subsequent demand notices, an application seeking instalments, and an order granting instalments, none of which were disclosed in the writ affidavit. The Court found the petitioner's explanation regarding the alleged misplaced objections and the medical certificate unconvincing. The writ proceedings were instituted after the petitioner had acknowledged liability and sought instalment relief, while material subsequent events were suppressed. A litigant invoking discretionary writ jurisdiction must make full and frank disclosure, and suppression of material facts defeats such relief.

Conclusion: The writ petition amounted to an abuse of the process of court and discretionary relief was declined. This issue was decided against the petitioner.

Final Conclusion: The assessment was sustained on merits and the writ jurisdiction was refused because the petitioner failed to establish entitlement to the concessional or exempt treatment claimed and had approached the Court without full disclosure of material facts.

---