9911796707
TMI Blog2016 (12) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... works of various contractees. As per the provisions of the Haryana Value Added Tax Act, 2003 (for short, 'the Act'), the contractee is liable to deduct tax from the payment to be made to the contractors and deposit the same with the department. In terms of the certificate issued to the contractor by the contractees, the credit of the amount reflected therein is granted to the contractor out of the tax payable by him. The assessment of the appellant for the year 2006-07 was framed by the Assessing Authority vide order dated 23.3.2010. The works contract tax was determined at Rs. 95,02,695/-. The payments to the tune of Rs. 94,05,576/- were verified, the credit for which was given. In addition, interest was levied under Section 14(6) of the Act. Aggrieved against the order of assessment levying interest, the appellant preferred appeal before the Joint Excise & Taxation Commissioner (Appeals), Faridabad, who vide order dated 6.1.2011, dismissed the same. The order was upheld by the Tribunal vide order dated 9.8.2011. The matter was remanded back only for the purpose of recomputation of the interest liability, as the Tribunal opined that the interest is chargeable on quarterly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provisions of the Act and the Rules framed thereunder, the submission is that the provisions for deduction of tax at source were added in the statutes only to safeguard the interest of the revenue. Duty was cast on a contractee to deduct the tax for any work got executed by him for better compliance of the provisions of the Act. Once the contractee has been made liable to deduct tax and deposit the same with the department for any default on his part, action is to be taken against him and not against the contractor. While deducting the tax, a contractee is working as an agent of the government. The contractor has no means to ensure that a contractee is complying with the provisions of the Act. He is only to furnish the certificate to the contractor showing deposit of tax in the Treasury. A contractee can be penalised for default in deduction or deposit of tax. The interest of the department is well protected as action can be and should be taken against him. Interest is compensatory. Once the contractee can be penalised to the extent of 100% of the amount in dispute, that takes care of the amount of interest which could possibly be charged by the department on account of delaye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions, hence, the appellant cannot escape from liability to pay interest. 12. Learned counsel for the State further submitted that at present she has no information about any action taken against the contractee. 13. Heard learned counsel for the parties and perused the paper book. 14. The relevant provisions of the Act and the Rules are reproduced hereunder:- Section 14 of the Act "Submission of returns and payment of Tax 14. (1) Tax payable under this Act shall be paid in the manner and at such intervals as hereinafter provided. (2) The following dealers or class or classes of dealers, whether or not liable to pay tax, namely: - (a) such class or classes of dealers as may be prescribed; (b) such dealer as may be required so to do by the assessing authority by notice in the prescribed form served in the prescribed manner, (c) a dealer who has applied for the grant of registration certificate but no final decision on his application has been taken; and (d) every registered dealer, shall furnish such returns including for statistical purposes at such intervals, verified by such persons, by such dates and to such authority, as may be prescribed and different returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lakh rupees or such other amount as may be prescribed. (3) Every person who is required to deduct tax in advance under sub-section (1) shall furnish such returns at such intervals by such dates in such manner to such authority as may be prescribed and shall pay the tax deducted according to such returns to the State Government in such manner as may be prescribed. (4) Every person referred to in sub-section (3) shall issue to the payee a certificate of tax deduction and payment in such form in such manner as may be prescribed. (5) Any tax paid to the State Government in accordance with sub-section (3) shall be adjustable by the payee, on the authority of the certificate issued to him under sub-section (4), with the tax payable by him under this Act and the assessing authority shall, on furnishing of such certificate to it, allow the benefit of such adjustment after due verification of the payment. (6) If any person fails to deduct the whole or any part of the tax as required by or under the provisions of sub-section (1), or fails to pay the whole or any part of the tax as required by or under sub-section (3), then, the authority referred to in subsection (3) may, at any time w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culated by multiplying the amount paid in any manner with four per cent or such other rate, as notified under sub-section (1) of section 24. (2) Every contractee shall, at the time of making payment, whether by cash, adjustment, credit to the account, recovery of dues or in any other manner, deduct from the payment made to the contractor for execution of a works contract in the State involving transfer of property in goods, whether as goods or in some other form, tax in advance calculated by multiplying the amount paid in any manner with four per cent or such other rate, as notified under sub-section (1) of section 24. Explanation. - For the purpose of the foregoing sub-rules, the valuable consideration shall not include the amount of tax, if any, forming part of the consideration. (3) The provisions of sub-rules (1) and (2) shall not apply where the amount or the aggregate of the amounts paid or likely to be paid during a year to the supplier of grains or the contractor, as the case may be, does not or is not likely to exceed one lakh rupees. (4) The provisions of sub-rule (2) shall not apply where both the contractee and the contractor are dealers registered under the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). 15. It is not in dispute that the appellant is liable to pay tax as he is a works contractor. Section 9 of the Act enables the State Government to accept from any class of dealers in lieu of tax payable under the Act, by way of composition, a lump sum tax, determined in the manner prescribed. Rule 49(3) of the Rules prescribed for the year in question tax @ 4% of the payments received or receivable by a contractor during the quarter for execution of contract. It further provides that payment of lump sum so calculated is to be made within 30 days following close of the quarter, regularly. A contractor is entitled to deduct from the amount of tax payable by him, the amount paid by the contractee on his behalf under Section 24 of the Act. Treasury receipt in proof of payment made by the contractee is required to be furnished along with the returns, which are to be filed quarterly, within one month after the close of the quarter. The appellant being a contractor and liable to pay tax under the Act is a dealer registered under the Act. On failure of a dealer to pay tax in accordance with the provisions of the Act and the Rules, interest can be charged from him at the rates prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns and pay tax accordingly. Parallel on the other side for advance collection of tax and for better compliance, liability has been put on the contractee to deduct tax from the payments to the contractor. The amount of tax deducted is to be paid to the department as prescribed. The contractor is entitled to get credit of the tax paid on his behalf by the contractee from the tax payable by him. A contractor can claim credit of the tax paid on his behalf by a contractee only to the extent certificate has been issued to him by the contractee and the same has been attached by him along with the returns. Rest of the tax is to be paid by him along with the returns. Merely on presumption about deduction or payment of tax by the contractee on his behalf, a contractor cannot absolve himself from liability to pay tax as per the returns filed. The liabilities to pay interest and penalty on the contractor and levy of penalty on the contractee are independent for their respective defaults. It is not to be set off against each other. If the contractor has failed to pay tax as per the returns filed by him, he shall be liable to pay interest for the period of delay. Even if there is delayed paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
