Hyderabad: The Andhra Pradesh government has decided to file a Special Leave Petition in the Supreme Court against Sections 50 and 51 of the AP Reorganisation Act as the state is losing around Rs 4,000 crore due to these Sections.
The AP government had already made a complaint to the Centre over the issue and it has now sent the file to the advocate-general seeking his legal opinion. Section 50 of the Act states: “The right to recover arrears of the tax or duty on property, including arrears of land revenue, shall belong to the successor state in which the property is situated and the right to recover arrears of any other tax or duty shall belong to the successor state in whose territories the place of assessment of that tax or duty is included on the appointed day.
The same goes for loans, as Section 51 mentions: “The right to recover loans or advances made before the Appointed Day to any local body, society, agriculturist or other person in an area within that state shall belong to the successor state in which that area is included on that day”.
However, Section 56 of the Act states: “The liability of the existing state of AP to refund any tax or duty on property, including land revenue collected in excess, shall be the liability of the successor state in whose territories the property is situated and the liability of the existing state of Andhra Pradesh to refund any other tax or duty collected shall be appropriated between the successor states of AP and Telangana on the basis of population ratio and the state discharge the liability shall be entitled to receive from the other state its share of the liability, if any.”
The AP government’s argument is that the Sections 50 and 51 are in contrast to the provision for refund in Section 56 wherein the refund to be given in either of the successor states has to be borne by them in the ratio of their population, hence Section 50 and 51 have to be amended on the same lines.
The AP government said that as per Section 50 of the Act, the total tax arrears go to the state where the dealer was registered before the bifurcation. Een though certain big dealers have operations only in AP, but are registered in Hyderabad and assessed there, the arrears would go to Telangana.
Similarly, as per Section 51 of the Act, the differed tax payable by a dealer, which is deemed as a loan, is collectable only in the state where the unit is located even though the tax was collected by such dealer from the entire state.
For example, if the undivided state had given Rs 1 crore as an advance to a company and if the company is located in Hyderabad, according to the Act only Telangana has the right to recover that advance.
The AP government has said that most of the companies are registered and located in Hyderabad, even though they do business in the entire undivided state and all the tax arrears will go to TS state. It said that such amounts should be shared between the two states on the population ratio basis of 58:42. AP officials said as per the Act, AP would lose Rs 4,000 crore.
