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2019 (9) TMI 171 - HC - VAT and Sales TaxEfficacious alternative remedy of appeal - stay on recovery of dues - works contract - deemed sale - Section 34(2) of the Gujarat Value Added Tax Act, 2003 - whether the respondent No.2 committed any error in passing the impugned assessment order? HELD THAT:- It appears from the materials on record that the writ applicant is a Government approved works contractor since 1967. The writ applicant has so far undertaken the works contracts for various government, semi-government and other such entities. It appears that the writ applicant has been consistently following a method of accounting wherein the material used in the contract is marked-up with the gross profit to quantify the deemed sale and on the said deemed sale the tax is worked out at the applicable rate. As against this tax liability, the input tax credit which is available on the purchases and TDS under Section 59B would be reduced so as to work out the net tax liability. It appears from the materials on record that such method of accounting was accepted by the department till the recent past and the assessments for the earlier years were also framed accepting such method. It appears that the respondent No.2 has not considered the tax audit report containing the contract wise information alongwith the details of the allowable expenditure. The same is on record. It also appears prima facie that the figures of the total contract receipts, total purchases and allowable expenditure, though duly computed and quantified, have not been looked into or discussed. The respondent No.2 has observed in his impugned assessment order that the method adopted by the writ applicant is not in accordance with Section 2(30)(c) of the GVAT Act. We also take notice of the fact that as regards the penalty under Section 34(12) of the Act, only a cyclostyle penalty notice without indicating the nature of infraction has been issued. The matter remanded to the respondent No.2 for a fresh consideration with a direction to re-consider the matter, having regard to the materials on record and after hearing the writ applicant.
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