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2016 (7) TMI 1058 - HC - VAT and Sales TaxTDS under DVAT - works contract - dominant part of the contract - labour/ service or material - Commissioner, VAT rejected the application filed by the Petitioner under Section 36A(2) of the Delhi Value Added Tax Act, 2004 (“DVAT Act”) for a lower deduction certificate. - The Petitioner is undertaking the execution of works contract in respect of two projects one awarded to it by the National Building Construction Corporation Limited (“NBCC”) for construction of a museum at the existing garage of the President Estate i.e. Rashtrapati Bhawan. Held that:- The order appears to proceed on the misconception that Section 36A(2) of the DVAT Act permits the entertaining of a prayer for lower deduction of tax only where “dominant part of the work is labour and service.” The word “dominant” is not to be found in Section 36A(2) of the DVAT Act. In fact, there is nothing in the said provision which suggests that unless the dominant part of the works contract is labour and service, the lower deduction will not be permissible. Also the Commissioner, VAT does not appear to have examined the estimates placed on record by the Petitioner along with the supporting documents to justify its claim for a lower deduction at 0.87%. The Commissioner, VAT could have, for reasons recorded, either agreed or disagreed with the estimates prepared by the Petitioner or with the calculations of the percentage of deduction based on the documents enclosed with the application. The Commissioner, VAT was obliged to discuss the materials and give reasons for his conclusion. However, the impugned order, as already noticed, is totally bereft of any reasoning. Matter remanded back for fresh decision.
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