Arrow Advertising vs The Deputy Commercial Tax Officer

G. Rohini, J.—The petitioner in these two writ petitions claims to be an advertising agency carrying on the business of providing advertising services through press, electronic media and hoardings to various commercial establishments and enterprises. By order dated 30.04.2012 made in Form-VAT 305, the respondent No. 2 - Deputy Commercial Tax Officer, Jubilee Hills Circle, Hyderabad, assessed the petitioner under the provisions of A.P. Value Added Tax Act, 2005 for the tax period 1.6.2009 to 31.3.2010. Pursuant thereto, the penalty order dated 30.05.2012 was also made by the 2nd respondent in Form-VAT 203. Challenging the said two orders, these two writ petitions are filed.

It is pleaded in the writ petitions that the petitioner is a registered "service provider" u/s 69 of the Finance Act, 1994 and that he is also a registered dealer under the A.P. VAT Act, 2005. However, according to the petitioner, he is basically a service provider and only a small part of his business relating to printing job work attracts liability under the A.P. VAT Act. It is also claimed that the rest of the receipts out of his business such as advertisements through press or electronic media, web designing, etc., relate to the services rendered by him which is not liable to tax by the State Government under the A.P. VAT Act. While so, the 1st respondent having audited the books of accounts of the petitioner issued a show-cause notice proposing assessment under the A.P. VAT Act. Though the petitioner submitted his reply dated 20.03.2012 objecting to the proposal made to levy tax on various services rendered by him which according to him are not exigible to tax by the State Government, the same was not accepted and thus the impugned assessment order dated 30.04.2012 came to be passed followed by penalty order dated 30.05.2012. Aggrieved by the same, the petitioner preferred appeals before the respondent No. 3 on 27.9.2012. The said appeals were rejected as time barred. Challenging the said orders of rejection, the petitioner filed further appeals before the Sales Tax Appellate Tribunal, Hyderabad on 30.03.2013 and the same were also dismissed by orders dated 28.10.2013.

The petitioner has not chosen to challenge the said orders of the Appellate Tribunal, but the present writ petitions are filed seeking a declaration that the very action of the respondents in levying the tax under the A.P. VAT Act, 2005 on the advertisement services rendered by the petitioner is arbitrary and illegal.

We have heard the learned counsel for the petitioner as well as the learned Special Standing Counsel for Commercial Taxes appearing for the respondents.

As noticed above, the very same contention of the petitioner that the advertisement services rendered by him do not attract the tax under A.P. VAT Act was considered and negatived by the assessing authority. Admittedly the said order attained finality in view of the fact that the petitioner''s appeals were rejected by the Appellate Deputy Commissioner as well as the Sales Tax Appellate Tribunal. Even assuming that the orders in the appeal are erroneous on any ground whatsoever, the proper course is to challenge the said orders, but it is not open to the petitioner to re-agitate before this Court the very same contention that the services rendered by the petitioner as an advertisement agency are not exigible to VAT.

It may also be added that the question as to what is the nature of the business activity of the petitioner and whether the petitioner is liable to be assessed under the provisions of the A.P. VAT Act or not is a question of fact since it depends on the element of service involved in the activity in question and the same cannot be enquired into by this Court in exercise of writ jurisdiction under Article 226 of the Constitution of India.

Hence, we are not inclined to entertain the writ petitions and the same are accordingly dismissed. No costs. Consequently the miscellaneous petitions, if any, pending in both the writ petitions shall stand closed.