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TMI Blog2018 (1) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... on a turnover of Rs. 16,46,510/-, under works contract, for the year 2000 2001. Subsequently, responding to the notice issued, by the Department, the respondent has furnished the details of works contract executed for Rs. 16,46,510/-. After verifying the connected documents relating to composite works contract, the Assessing Authority, assessed 70% of the turnover of the works contract receipt and allowed the dealer, to deduct 30% of turnover, from the works contract receipt, for labour and other charges, under Section 3 B of the Act, with an observation that the dealer has not exercised their option, to pay compounded rate of tax, at 4%, at any time, not even, before the commencement of the financial year or along with the monthly return, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act under Section 7 (2) is from 1/7/2000 only and not applicable to be assessment year 2000 - 2001. 6. In support of the above substantial questions of law, Mr.K.Venkatesh, Government Advocate submitted that (i). The assessee has failed to exercise the option to pay tax, under compounded rate of tax, within the time prescribed under 7 C of the TNGST Act. (ii). The assessee has failed to file monthly returns by exercising option, under Section 7 C of the Act, before commencement of the financial year. (iii). Proviso to Section 7 C of the Act, is effective from 31st January 2000. In the instant case, assessment relates to 2000 2001 and therefore, the dealer/assessee has to exercise his option, to pay compounded rate of tax, and filed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereunder:- "The contention of the appellant is that the appellants have not executed any works contract in the previous assessment year (1999-2000) and the one and only works contract executed was in the month of March 2001 (2000 01) and hence there was no question of exercising their option along with the first monthly return (i.e April 2000) for the financial year 2000 2001. According to sub-Rule 14 (4-CC) which governs the procedure for exercising the option, it was not made applicable to works contract falling under Section 7 C of the Act till sub-rule 15 (4-CC) was amended by a Notification issued in G.O.Ms.No.76 CT (B1) dated 27/6/2002 and amendment was given effect from 1/7/2002 only and similarly form A 11 which is the form prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 16,48,510/- in the monthly return filed March 2001 and in the Self Assessment return in Form A 11 filed for 2000 01 constitute sufficient compliance of the option mentioned in Section 7 C of the Act, as there were no works contract executed by the appellants in the earlier months (i.e, prior to March 2001). The Madras High Court in the case of the State of Tamil Nadu vs. Ball Bearing Centre reported in 41 STC 264 while delivering judgment in a similar case has held, "The application under Section 7 (2) is only option and it does not say that failure to apply in the relevant year deprived the benefit of Section to an assessee once and for all. In giving effect to sub-Section (2) it is not possible for the rule making author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but had not furnished any details, records, documents for the works contract turnover and therefore, proposed to assess the entire turnover at 11% but after verification of relevant records filed by the appellants along with their objection, the Assessing Authority took a different stand and proceeded to pass assessment order levying tax at 11% or 10% of works contract turnover under Section 3 B of the Act for the reason that appellant had not exercised their option for payment of compounded rate of tax under Section 7 C of the Act at any time not even before the commencement of the financial year or along with monthly return on the commencement of each work contract. Further, the reason stated by the Assessing Authority in the impugned pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of STA filed by the revenue along with the connected records and notified that the revenue have miserably failed in their case, in countering the order of the Appellate Assistant Commissioner (CT). The grounds adduced by the revenue in the State appeal that the Appellate Assistant Commissioner (CT) has given findings that the one and only works contract executed was in the month of March 2001. Therefore, for the earlier month there was no works contract but only trading activities. Under this circumstances, they have to pay tax under Section 3 -B of the Tamil Nadu General Sales Tax Act, 1959 only and not under Section 7 C of the Act, unless option was given under Section 7 - C. Therefore, the Appellate Assistant Commissioner's ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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