Works contract taxation of cine-wall posters denied for earlier years; later statutory expansion could not apply retrospectively.

For assessment years governed by the pre-amendment definitions, composite manufacture, printing and supply of cine-wall posters did not fall within the then restricted statutory concept of works contract, so tax could not be fastened under the Andhra Pradesh General Sales Tax Act, 1957 or the Central Sales Tax Act, 1956 for those years. A revisional ground based on belated filing of the appeal could not be sustained when it was outside the notice and remand scope, and the appellate authority could condone delay on sufficient cause. The later finality of a refund-withholding order did not bar revision of the substantive assessment. Any recovery of collected tax was left for factual inquiry on unjust enrichment.

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Issues: (i) Whether the revisional authority could set aside the appellate order on the ground that the appeal had been entertained after limitation when that ground was not included in the earlier notice; (ii) Whether the manufacture, printing and supply of cine-wall posters amounted to a works contract and, if so, whether the transactions were taxable under the Andhra Pradesh General Sales Tax Act, 1957 and the Central Sales Tax Act, 1956 for the relevant assessment years; (iii) Whether the Commissioner was barred from revising the matter because the order relating to withholding of refund had attained finality; and (iv) Whether the appellants could retain amounts collected from customers and whether the revenue could recover them on the ground of unjust enrichment.

Issue (i): Whether the revisional authority could set aside the appellate order on the ground that the appeal had been entertained after limitation when that ground was not included in the earlier notice.

Analysis: The revisional jurisdiction had earlier been set in motion on a limited notice confined to the nature of the transaction. The later attempt to invalidate the appellate order on the separate ground of belated filing travelled beyond the scope of the notice and beyond the remit of the remand order. The appellate authority also had power under the proviso to Section 19(1) of the Andhra Pradesh General Sales Tax Act, 1957 to condone delay where sufficient cause was shown.

Conclusion: This ground could not sustain the revision and was decided in favour of the assessee.

Issue (ii): Whether the manufacture, printing and supply of cine-wall posters amounted to a works contract and, if so, whether the transactions were taxable under the Andhra Pradesh General Sales Tax Act, 1957 and the Central Sales Tax Act, 1956 for the relevant assessment years.

Analysis: The constitutional scheme after Article 366(29-A)(b) permits levy on the transfer of property in goods involved in a works contract, but the statutory regime applicable to the relevant years remained confined by the then existing definitions. Under Section 2(t) of the Andhra Pradesh General Sales Tax Act, 1957, before its amendment with effect from 01.04.1995, only specified categories of works contracts were covered, and the impugned activity did not fall within the restricted expression. Under the Central Sales Tax Act, 1956, the inclusion of works-contract transfers within the definition of sale and the broader definition of works contract came only later, after the relevant assessment years.

Conclusion: The transactions were not exigible to tax under either Act for those years, and this issue was decided in favour of the assessee.

Issue (iii): Whether the Commissioner was barred from revising the matter because the order relating to withholding of refund had attained finality.

Analysis: The order granting or withholding refund was consequential to the earlier substantive assessment dispute. Once the revisional order restoring the assessment stood in force, the consequential refund order could not independently protect the assessee from the tax liability revived by the revision. The later order attaining finality did not curtail the revisional power exercised against the substantive assessment order.

Conclusion: The Commissioner was not barred from revising the earlier order, and this issue was decided in favour of the revenue.

Issue (iv): Whether the appellants could retain amounts collected from customers and whether the revenue could recover them on the ground of unjust enrichment.

Analysis: A person who has collected tax from purchasers cannot, after succeeding on the underlying levy, automatically retain the amounts if the burden was passed on. The doctrine of unjust enrichment permits the State to prevent retention of sums collected as tax when the collector has not borne the burden. The question therefore required factual examination by the assessing authority as to whether tax had in fact been collected from customers and whether recovery was warranted.

Conclusion: The issue was left for fresh factual determination by the assessing authority, with the burden placed on the appellants to show that no tax had been collected.

Final Conclusion: The revisional orders were set aside to the extent they treated the transactions as taxable sales for the relevant years, but the matters were remitted for a limited inquiry on unjust enrichment and recovery of any amounts collected as tax.

Ratio Decidendi: For assessment periods governed by a restricted statutory definition of works contract, a composite printing activity is taxable only if it falls within the precise statutory coverage then in force; later enlargements of the definition cannot be retrospectively applied to fasten liability.

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