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TMI Blog2007 (12) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... tition before the Chhattisgarh High Court questioning constitutional validity of section 35 of the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 (hereinafter referred to as, "the Adhiniyam"). It corresponds to the Chhattisgarh Commercial Tax Act, 1994 (in short, "the Act"). The respondent hereinafter is described as the "assessee". Background facts highlighted by the respondent are as follows: The writ petitioner is a proprietary concern of one Shri Krishana Mudliar and it has been executing works contracts for various departments of the Chhattisgarh State Government and others and was holding Sales Tax Registration No. 061/RDN/14/2739/02. During the assessment year 2001-02, the writ petitioner had executed works contracts awarded by Executiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acted in the Act and that the State Legislature has legislative competence to enact section 35. It was stated that section 35 is not a unique provision in the Act and similar provisions are enacted in the Sales Tax Acts of other States, for example, section 6D of the Uttar Pradesh Trade Tax Act, 1948, section 6E of the Bengal Finance (Sales Tax) Act, 1941, section 25A of the Bihar Finance Act, 1981, section 25B of the Haryana General Sales Tax Act, 1973, section 12A of the Himachal Pradesh General Sales Tax Act, 1968, section 16C of the Jammu & Kashmir General Sales Tax Act, section 19A of the Karnataka Sales Tax Act, 1957 and section 13AA of the Orissa Sales Tax Act, 1947. It was also contended that the Constitutional validity of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of deduction at source of the State sales tax that is payable by a contractor on the value of a works contract. For the purposes of the deduction neither the owner nor the Commissioner who issues to the contractor a certificate under section 13AA(5) is entitled to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outside sale or a sale in the course of import. The owner is required by section 13AA(1) to deposit towards the contractor's liability to State sales tax four per cent of such amount as he credits or pays to the contractor, regardless of the fact that the value of the works contracts includes the value of inter-State sales, outside sales or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ater stage is no solace, as noticed in Bhawani Cotton Mills Ltd. v. State of Punjab [1967] 20 STC 290 (SC); [1967] 3 SCR 577. Further, there is no provision for certification of the extent of the deduction that can be made by the authority. Therefore, we must hold that arbitrary and uncanalised powers have been conferred on the concerned person to deduct up to four per cent from the sum payable to the works contractor irrespective whether ultimately the transaction is liable for payment to any sales tax at all. In that view of the matter, we have no hesitation in rejecting the contention advanced on behalf of the State." In view of what has been stated by this court in Steel Authority's case [2000] 3 SCC 200 See [2000] 118 STC 297 (SC). a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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