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Judgment
Bilal Nazki, J.—The assessment made under the Andhra Pradesh Tax on Entry of Goods into Local Areas Act, 2001 (for short, "the Act") has been challenged in this writ petition on the ground that the assessment has been made on the strength of G.O. Ms. No. 955, Revenue (CT II), dated May 11, 2005, which is ultra vires Section 3 of the Act itself.
Section 3(1)(c) of the Act reads as under:
The rate of tax to be notified by the Government in respect of any commodity shall not exceed the rate specified for that commodity under the Andhra Pradesh General Sales Tax Act, 1957 or the notifications issued thereunder:
Provided that the tax payable by the importer under this Act shall be reduced by the amount of tax paid, if any, under the law relating to general sales tax in force in the Union Territory or State, in which the goods are purchased.
In terms of this provision, the rate of tax notified should not exceed the rate applicable to the commodity under the APGST Act, which was repealed and replaced by the Andhra Pradesh Value Added Tax Act, 2005 which is effective from April 1, 2005. In the present case, we are concerned with the period after April 1, 2005.
The learned Counsel for the petitioner submits that in terms of entry 90 of Schedule IV of the Andhra Pradesh Value Added Tax Act, all kinds of packing material including hessian cloth and jute twine carry tax at four per cent. Therefore, if entry 90 of the Schedule IV of the A.P. Value Added Tax Act and Section 3(1)(c) of the Act are read together, the Government had no power to issue the impugned notification by notifying that HDPE/PP woven fabrics and sacks would carry tax at the rate of 12.5 per cent because there was a statutory bar in terms of Section 3(1)(c) of the Act that the tax notified by the Government shall not exceed the tax leviable under the A.P. Value Added Tax Act, 2005. The learned Counsel further submits that after filing of this writ petition, the Government realised the mistake and passed another GO being G.O. Ms. No. 405, Revenue (CT II), dated March 31, 2006, but it is effective from April 1, 2006.
Therefore, from April 1, 2006, the position has been clarified. But the position is not clear for the period between the date of issuance of G.O. Ms. No. 955 on May 11, 2005 and the date of issuance of G.O. Ms. No. 405 on March 31, 2006 and for the period covered by G.O. Ms. No. 955.
Since G.O. Ms. No. 955, dated May 11, 2005 is violative and ultra vires of Section 3(1)(c) of the Act, we are clear in our mind that this notification has to be construed as illegal as far as HDPE/PP woven fabrics and sacks are concerned. Consequently, the order of assessment dated December 26, 2005, passed by the second respondent on the basis of G.O. Ms. No. 955, dated May 11, 2005 is liable to be quashed.
The writ petition is partly allowed and the assessment order dated December 26, 2005 passed by the second respondent is hereby quashed. No costs.
The learned Counsel for the petitioner, at this stage, submitted that the writ petition could not be disposed of as he intends to amend the writ petition to challenge the A.P. Tax on Entry of Goods into Local Areas Act, 2001 itself, as some other writ petitions are pending.
That would be a separate cause of action and the petitioner is at liberty to challenge the Act, if he is so advised, in a separate writ petition.
That rule Nisi has been made absolute as above.