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2019 (8) TMI 565 - HC - VAT and Sales Tax


Issues Involved:
Challenge to direction for deduction of tax at source under Central Sales Tax Act and A.P. Value Added Tax Act; Jurisdictional issue post bifurcation of the State; Claim for refund of amount deposited pursuant to interim order of the Court.

Analysis:

1. Challenge to direction for deduction of tax at source:
The petitioner challenged the direction issued by the Commercial Tax Officer for deduction of tax at source amounting to Rs. 7,49,18,249. The petitioner contended that Tax Deducted at Source (TDS) cannot be deducted based on provisions of the Central Sales Tax Act, 1956, and A.P. Value Added Tax Act, 2005. The Court examined the validity of the demand and held that the demand made by the 1st respondent was without authority of law. Consequently, the Court directed the 1st respondent to refund the amount of Rs. 2 crores deposited by the petitioner within eight weeks, as the TDS was not to be deducted.

2. Jurisdictional issue post bifurcation of the State:
Following the bifurcation of the State, the area where the project was carried out came under the jurisdiction of the Assessing Officer at Gudur, Andhra Pradesh. The Court noted that assessments had been completed under the new jurisdiction. The 1st respondent contended that the petitioner should claim adjustment from the Assessing Officer at Gudur and that the amount deposited had been appropriated between the two States. However, the Court held that the 1st respondent was primarily responsible for refunding the deposited amount, despite the subsequent denial of availability of funds by the counterpart at Gudur.

3. Claim for refund of amount deposited pursuant to interim order:
The Court emphasized that the 1st respondent received the deposited amount not by exercising any power under the Act but pursuant to an interim order of the Court. It was ruled that no party can be prejudiced by an act of the Court, and any person receiving money under a court order is obligated to refund it. Therefore, the Court allowed the Writ Petition, set aside the impugned demand, and directed the 1st respondent to refund the deposited amount within eight weeks. The Bank Guarantee issued by the petitioner was to be cancelled as a result of the judgment.

In conclusion, the Court's judgment addressed the issues of challenging the tax deduction direction, jurisdictional matters post-State bifurcation, and the claim for refund of the amount deposited pursuant to the interim court order. The decision provided clarity on the legal aspects involved and upheld the petitioner's claim for refund based on the lack of legal authority for the tax deduction demand.

 

 

 

 

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