TMI Blog2015 (4) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the petitioner in his capacity as the main contractor. - In fact the very demand against the petitioner is only on the amount of ₹ 45,92,762.90 that was retained by him towards profit under the transaction with the awarder of the contract. In that view of the matter, there was no liability on the petitioner in terms of the Kerala Value Added Tax Act since there was no sale of material in the course of execution of works contract that emanated from the petitioner to the awarder of the contract. In the absence of any taxable event under the Kerala Value Added Tax Act, the respondent could not have demanded tax on the amounts retained by the petitioner as profits arising out of the transaction in question - Decided in favour of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner paid tax on the said amount so that he could get the Form 20B certificate from the department, as a prerequisite for obtaining a release of the principal amount of ₹ 45,92,762.90 from the awarder of the contract. The request of the petitioner was initially turned down by the 1st respondent on the ground that the petitioner had to pay the tax amount on the profit retained by him. Although the petitioner had preferred Ext.P4 objection before the 1st respondent, the 1st respondent did not accept the contention of the petitioner and proceeded to issue Ext.P5 demand for tax on the said amount of ₹ 45,92,762.90. Thereafter the petitioner submitted Ext.P6 objection to the demand but then effected a payment of the tax amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the petitioner as also Smt. Lilly.K.T., the learned Government Pleader appearing on behalf of the respondents. 4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I note that in a case where there is an agreement between an awarder and a contractor and the entire work under the contract is sub contracted to a sub contractor by the main contractor, the execution of the work then involves a transfer of material, in the course of execution of the works contract, directly from the sub contractor to the awarder of the contract. The decision of the Honourable Supreme Court in State of Andhra Pradesh and Others v. Larsen Tourbo Ltd. and Others - [(2008) 17 VST 1(SC) is an author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Form 20H certificate from the sub contractor who undertook to discharge the tax liability in respect of the entire work that was sub contracted, the amounts retained by the petitioner, from out of payments made by the awarder of the contract, represented only the profit element that accrued to the petitioner in his capacity as the main contractor. It is not in dispute in the instant case that the tax liability in respect of the work that was sub contracted was not due from the petitioner in his capacity as the main contractor. In fact the very demand against the petitioner is only on the amount of ₹ 45,92,762.90 that was retained by him towards profit under the transaction with the awarder of the contract. In that view of the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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