High Court instructs tax authorities on VAT exemption, expedites appeal, restrains tax collection pending decisions. Criticizes Assessing Authority.

The High Court directed the tax authorities to consider the petitioner's arguments regarding the applicability of VAT and exemption under the Tax on Entry Act for two consecutive assessment years. The court instructed the authorities to expedite the pending appeal for one year and allowed the petitioner to file an appeal for the other year within three weeks. Until final decisions on the appeals, no coercive measures for tax collection were permitted. The court criticized the Assessing Authority for not properly assessing the legal aspects, prompting the filing of writ petitions.

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Issues:
Challenge to entry tax assessment for two consecutive years under Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001.

Analysis:
The petitioner, a registered dealer under A.P. VAT Act, challenged entry tax levied by the 1st respondent for two consecutive assessment years. The petitioner contended that the goods purchased from outside the State were considered as sale involving transfer of property in execution of works contracts, and VAT was duly paid. The petitioner argued that the goods fell within the definition of "sale" under Section 2(28) of VAT Act, and hence, exempt under Section 3(2) of Tax on Entry Act. The 1st respondent, however, passed the impugned assessment orders without considering these objections. The petitioner had filed appeals against similar orders for previous years, and one appeal was pending for the assessment year 2016-17. The High Court directed the 3rd respondent to dispose of the pending appeal within a specified time. For the assessment year 2017-18, where no appeal was filed, the petitioner was directed to prefer an appeal within three weeks. Until the final orders on the appeals, no coercive steps were to be taken for tax realization.

The High Court noted that the Assessing Authority did not discuss the applicability of Section 3(2) of Tax on Entry Act in the petitioner's case. It observed that the Assessing Authority had not considered the legal aspects in the right perspective, leading to the filing of writ petitions. The petitioner's counsel argued that VAT was already paid on the goods used in works contracts, and hence, entry tax was not applicable. The Government Pleader representing respondents opposed the writ petitions. The High Court directed the 3rd respondent to consider the factual and legal points raised by the petitioner in the pending appeal for the assessment year 2016-17 and to pass an appropriate order expeditiously. For the assessment year 2017-18, the petitioner was given liberty to file an appeal within three weeks, and the 3rd respondent was directed to hear the appeal and pass an order expeditiously. No coercive steps were to be taken for tax realization until final orders on the appeals.

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