TMI Blog1991 (6) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... red dealer under the Act as well as under the Central Sales Tax Act, 1956. Under the State Act the registration certificate was granted with effect from December 17, 1985. The assessee is a building contractor and carries on the business for private works as also public works. The assessee was constructing and executing certain works in the district of Gurgaon for M/s. Gulmohar Estate Limited and when M/s. Gulmohar Estate Limited received a notice from the Deputy Excise and Taxation Commissioner/Excise and Taxation Officer-cum-Assessing Authority, Gurgaon, to the effect that as contractee they are responsible under the Act to deduct tax at the rate of 2 per centum of the amount paid from valuable consideration payable by them with effect from April 1, 1989 for execution of works contract whether in cash, by cheque, by adjustment or in any other manner whatsoever, credited or adjusted as the case may be and the tax so deducted was to be paid to the State Government. By a notice they have been called upon to supply a copy of the contract and statement of payments made by them to the contractor with effect from April 1, 1989 and to produce proof of payments made in compliance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the relevant period and shall be given credit in his assessment accordingly. (5) If any person contravenes the provisions of sub-section (1) or subsection (2) or sub-section (3), the Commissioner or any person appointed to assist him under sub-section (1) of section 3 may, by an order in writing, direct such person to pay, in addition to the sum deducted, if any, a penalty not exceeding the amount of tax deductible under sub-section (1): Provided that no such penalty shall be imposed on any person unless he has been given an opportunity of being heard. (6) The tax deducted by a contractee under sub-section (1), remaining unpaid after the due date of payment, shall be recoverable from him as arrears of land revenue." "26(1). Payment of lump sum in lieu of sales tax.-The State Government may, in the public interest and subject to such conditions as it may deem fit, accept from any class of dealers, in lieu of the tax payable under this Act, for any period, by way of composition, a lump sum to be determined by the State Government and to be paid at such intervals and in such manner as may be prescribed, and thereupon during the period such composition remains in force, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernor of Haryana hereby specifies that with effect from the 1st day of April, 1989, any contractee responsible for making any payment or discharging any liability on account of the valuable consideration payable for the execution of a works contract involving transfer of property in goods (whether as goods or in some other form), shall, at the time of credit to the account of or payment to the contractor of such valuable consideration in cash, by cheque, by adjustment or in any other manner whatsoever, deduct tax therefrom at the rate of two per centum of the amount paid, credited or adjusted, as the case may be." Earlier to the 46th Amendment of the Constitution no tax was leviable on indivisible building contracts but by virtue of certain amendments made in the Constitution of India by the 46th Amendment building contracts became liable to sales tax. Again the levy of sales tax on building contracts was challenged and the matter was set at rest by the Constitution Bench of the Supreme Court in Builders Association of India v. Union of India [1989] 73 STC 370 and it was held as follows: "............. After the 46th Amendment the works contract which was an indivisible one is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the labour charges, etc., involved therein and it became the duty of the contractor to supply the evidence as to how much value out of the total contract was towards the labour charges and the remaining had to be considered as the value of the goods transferred and sales tax was leviable on the value of such transferred goods. Section 6 of the Act is the charging section and section 15 provides rate of tax. The rate of tax varies from 20 per cent to 8 per cent as the maximum limit subject to issue of notification by the Government which may be at a lower rate but the rate of tax cannot exceed the optimum limit. In view of the charging section 6 a dealer is liable to pay tax at the prescribed rate if his turnover exceeds the taxable quantum provided in section 7 of the Act. Section 26 of the Act empowers the State Government to accept prescribed lump sum from any class of dealers, in lieu of tax payable under the Act for any period, by way of composition. If the State Government issued notification under section 26 of the Act option becomes available to an assessee for payment of lump sum subject to the conditions laid down in the section and the notification issued thereunder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment, the aggrieved assessee can always come to court for obtaining a direction for speedy disposal. In the bunch of cases before us we have a case of such type and in that we are issuing requisite directions. However, neither a reasonable argument has been raised before us nor any justification has been shown to strike down the provisions of section 25B of the Act or the notification issued thereunder, copy whereof is annexure R/2. Accordingly, we uphold the vires of section 25B of the Act and find no ground to quash the notification (annexure R/2). In Civil Writ Petition No. 3782 of 1990 for the assessment years 1986-87 to 1988-89 the assessments have not been finalised by the Assessing Authority and there is no reasonable explanation for the delay in completing the assessments. Accordingly, while upholding the vires of the provisions of section 25B of the Act and validity of the notification we issue a direction in Civil Writ Petition No. 3782 of 1990 to respondent No. 2 to finalise the assessments within four months of the receipt of this order, if not already finalised. In case it is found that the assessee is entitled to refund, refund be made to him without de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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