Situs of sale and interstate execution under VAT were not properly examined, so the assessment was set aside for fresh consideration.

Assessment of turnover under the Andhra Pradesh Value Added Tax Act, 2005 for the Tuticorin Coal Terminal transaction was found unsustainable because the order did not properly address the objection that the work was executed in Tamil Nadu, nor did it explain what goods were transported from Visakhapatnam or how the transaction was brought within the Andhra Pradesh tax net. The reasoning that the place of contract fixed the situs of sale was treated as incomplete on the admitted facts. The assessment, limited to that transaction, was set aside, with liberty to the assessing authority to proceed afresh in accordance with law after considering all factual and legal objections.

---

---

Issues: Whether the assessment of the turnover relating to the contract with M/s. Tuticorin Coal Terminal Private Limited could be sustained under the Andhra Pradesh Value Added Tax Act, 2005 when the work was asserted to have been executed outside Andhra Pradesh and the assessing authority had not properly dealt with the objections raised.

Analysis: The transaction concerned supply and execution components under agreements relating to development work at Tuticorin. The assessment order proceeded on the basis that the contract was entered into at Visakhapatnam and that the situs of sale followed the place of contract, but it did not clearly address the petitioner's specific objection that the work was executed in Tamil Nadu and that tax returns had been filed there. The order also did not satisfactorily explain what goods were transported from Visakhapatnam, at what stage, and how the transaction was brought within the Andhra Pradesh tax net. The reasoning based on the cited principle was found to be incomplete on the admitted facts, though the department asserted that relevant material was available for reconsideration.

Conclusion: The assessment, insofar as it related to the Tuticorin Coal Terminal Private Limited transaction, was unsustainable in its present form and was set aside, with liberty to the assessing authority to proceed afresh in accordance with law and to consider all factual and legal objections.

---