TMI Blog1995 (4) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... and Chief Accounts Officer (Construction), NF Railway, instructing the railway authorities to deduct taxes with retrospective effect. The facts for the purpose of disposal of these civil rules may be stated as follows: The petitioners in these civil rules are railway contractors. During the course of execution of work, petitioners submit running bills and the railway administration makes the payment on the basis of the running bills. However, in pursuance of the letters dated August 5, 1993 issued by the 3rd respondent and March 9, 1995, issued by the 4th respondent, the 5th respondent-the General Manager (Construction), NF Railway, Maligaon, Guwahati, decided to deduct Assam general sales tax at source at 2 per cent with retrospectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the transfer of the right to use any goods specified in Schedule VI for any purpose are liable to pay sales tax and the authority is empowered to deduct tax at source. Sub-section (b)(1) of section 27 runs thus: "(b) every person responsible for paying sale price or consideration or any amount purporting to be the full or part payment of sale price or consideration in respect of any sale or supply of goods liable to tax under this Act to the (State) Government or to a company, corporation, board, authority, undertaking or any other body by whatever name called, owned, financed or controlled wholly or substantially by the (State) Government, or a public company shall, at the time of credit to the account of or payment to the payee of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be seen whether the action of respondent No. 3 in issuing the notice is without jurisdiction and whether respondents Nos. 4 and 5 can deduct tax at source at the instance of respondent No. 3. Section 27(b) of the Act makes special provisions relating to deduction of tax at source in certain cases as I indicated above. From mere reading of the said section it is apparently clear that for deducting tax at source the authority must prescribe the manner and the rate. Dr. Todi very candidly submits that no rate has been prescribed. Schedule VI has been made in terms of section 8(1)(e). Section 8(1)(e) of the Act relates to any transfer of property in goods (whether as goods or any other form) involved in a works contract of the nature s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Therefore, the letter dated August 5, 1993 issued by the 3rd respondent is liable to be set aside as ultra vires. In view of the above discussions, I allow the writ petitions setting aside the notice dated August 5, 1993, issued by the 3rd respondent directing the 4th and 5th respondents to deduct tax at source from the payment to be made to the petitioners' bill and direct the 4th and 5th respondents not to deduct tax at source on the basis of the impugned notice. However, I make it clear that the authority after prescribing the manner and the rate shall be at liberty to deduct tax at source. In the result, the petitions are allowed. However, in the facts and circumstances of the case I make no order as to costs. Petitions all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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