9911796707
TMI Blog2018 (3) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of tiles, marble granite work on contract basis. The petitioner had executed a contract work for M/s.DLF Info City Developers (Chennai) Ltd., who are the developers of Special Economic Zone for the assessment year 2006-2007. The petitioner was assessed to tax on a total and taxable turnover of Rs. 1,84,19,590.00 under Section 22 of the TNVAT Act. Subsequently, the petitioner's place of business was inspected by the officers of the Enforcement Wing on 31.08.2012 and during the course of inspection, it was pointed out that the petitioner has done works contract to M/s.DLF at Ramapuram and they have not exercised their option to pay tax under compounded scheme under Section 6 of the TNVAT Act. Therefore, it was pointed out that the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction. This fundamental error would render the impugned proceedings as unsustainable. The respondent has referred to Section 40(2) of the TNVAT Act to justify his action in levying penalty. So far as the deduction of tax at source in works contract is concerned, the same is governed by Section 13 of the TNVAT Act. Sub-section (1) of Section 13 of the TNVAT Act starts with a non obstante clause stating that notwithstanding anything contained in the TNVAT Act, every person responsible for paying any sum to any dealer for execution of works contract shall, at the time of payment of such sum, deduct an amount calculated at the rates mentioned in the said provision. In order to protect the interest of dealers who are not liable to pay tax, sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard penalty cannot be imposed. Admittedly in the revision notice dated 30.11.2012, there was no proposal to levy penalty under Section 40(2) of the TNVAT Act. However, more importantly, what is required to be seen is whether Section 40(2) of the TNVAT Act would stand attracted to the case on hand. Admittedly, the petitioner not deducted tax at source and therefore, the petitioner cannot be brought within the ambit of sub-section (1) of Section 40 of the TNVAT Act. If that be so, the question of invoking sub-section (2) of Section 40 of the TNVAT Act does not arise. However, in the instant case the contractee has deducted tax at source on the premise that the works contract are taxable. However, when the assessment proceedings were made, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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