Works-contract composition compliance requires consideration of prescribed records, making an unreasoned best judgment assessment unsustainable.

Works-contract dealers may opt for composition under the applicable VAT provision if they meet prescribed conditions and maintain required records. The note states that, where the dealer submitted tax-collection certificates, returns and other prescribed materials, the assessing authority was required to consider them and address specific statutory contentions with reasons. It records that failure to do so vitiated the best judgment assessment, which was described as unsustainable and quashed.

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Issues: Whether the best judgment assessment levying tax on a works-contract dealer was sustainable when the dealer had opted for composition under the applicable VAT provision and submitted the records required under that scheme.

Analysis: A dealer executing works contracts may opt for composition under Section 4(7)(b) of the Andhra Pradesh Value Added Tax Act, 2005, subject to the prescribed conditions and record-keeping requirements. The petitioner had exercised that option and submitted the available tax-collection certificates, returns and other prescribed records. The assessing authority failed to consider these materials and did not address the petitioner's specific statutory contentions. The assessment was therefore vitiated both by non-compliance with the composition scheme and by failure to give reasons.

Conclusion: The best judgment assessment was unsustainable in law and was quashed.

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