TMI Blog2023 (9) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority, deduction shall be of such amount as is calculated at the rate specified in column (3) of the Table to Rule 8(5) of the TNVAT Rules, 2007. Since, it is the case of the petitioner that few more TDS certificate have been issued to the Petitioner by the Greater Corporation of Chennai, the petitioner is directed to furnish the same to the respondent within a period of thirty (30) days from the date of receipt of a copy of this Order. The 1st respondent is directed to issue a corrigendum to the impugned order by revising the tax liability after adjusting the TDS certificates said to have been issued during the pendency of this Writ Petition, within a period of sixty (60) days from the date of receipt of a copy of this order. The petitioner shall thereafter file an appeal before the Appellate Authority under the provisions of the TNVAT Act, 2006, within a period of ninety (90) days from the date of receipt of a copy of this order. Petition dismissed. - Honourable Mr.Justice C.Saravanan For the Petitioner : Mr.T.Promod Kumar Chopda Senior Counsel for Ms.P.Pooja Chopda For the Respondent : Ms.Amirtha Poonkodi Dinakaran Government Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e table indicates that the reported turnover as per the returns comes to only Rs. 10,19,52,599/- (Rs.9,63,47,907/- + Rs. 56,04,692/-). However, in the beginning of the impugned order in the second table, the reported turnover has been arrived as Rs. 10,65,71,282/-. 5. The estimated taxable turnover has been arrived at Rs. 19,81,79,432/-, by deducting 30% towards labour charges and like charges from the total contract income of Rs. 28,31,13,474/- reported in the Profit Loss Account. 6. The petitioner is a Civil Contractor and executes works contract for statutory Corporations and State Departments such as Greater Chennai Corporation, Highways and Rural Works Department, etc. The petitioner had earlier filed W.P.No.26508 of 2021. The petitioner had prayed for a mandamus to direct the respondents therein to consider and grant refund of the TDS (deduction of tax at source) amount of Rs. 56,18,991/- to the petitioner covered by certificate in Form T and statement of tax deduction at source in Form R filed by the Greater Chennai Corporation. 7. The said Writ Petition was disposed of by this Court by its order dated 14.12.2021 without expressing any opinion on merits by directi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less: 30% towards labour and like charges 8,49,34,042.00 Total estimated taxable turnover 19,81,79,432.00 Less: Sales reported 10,65,71,282.00 Suppressed sales turnover proposed to assess at 5% and 14.5% in the ratio of 70:30 9,16,08,150.00 13. That apart, several discrepancies were also pointed out under the following heads: (i) Purchase difference of Rs. 1,96,208/-; (ii) Purchases effected from unregistered dealer for Rs. 34,50,508/- for being assessed at 5% under Section 12 of the TNVAT Act, 2006; (iii) Turnover of Rs. 9,63,47,907/- to be assessed at 5%; (iv) Turnover of Rs. 56,04,692/- to be assessed at 14.5%; (v) ITC of Rs. 10,37,164/- carried forward from 01.04.2016 asking the petitioner to furnish proof of records; (vi) Rs. 6,50,599/- for exempted sales; (vii) A sum of Rs. 6,05,000/- for sale of Innova; (viii) Hire income of Rs. 11,49,978/- liable to tax under Section 4 of the TNVAT Act, 2006; (ix) Assessment of Rs. 5,07,876/- towards output tax due without filing any proof of records for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within the statutory period prescribed for filing the appeal before the expiry of limitation for filing statutory appeal before the Appellate Authority had expired. 19. Arguing on behalf of the petitioner, the learned Senior Counsel for the petitioner submits that the petitioner had resorted to valuation for the purpose of Section 5 r/w Rule 8(5)(d) of the TNVAT Act, 2006 r/w TNVAT Rules, 2007 as per the ratio of the Hon'ble Division Bench of this Court in Tax Case (Revision) Nos.31 to 34 of 2017 vide its order dated 10.01.2018. 20. It is submitted that the Hon'ble Division Bench has considered the difficulties of dealer that it is not possible to cull out each and every item transferred along with related Gross Profit and thus the dealer can arrive at the taxable turnover notionally by calculating the deemed sales value by adding a percentage to the value of purchase. 21. It is submitted that it is the practice of the dealers to adopt 10% gross profit on the purchase value of the items used in the execution of works contract to arrive at the deemed sales turnover for which tax at the respective rate was paid to the Department. 22. The learned Senior Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive at the estimated taxable turnover in absence of proper explanation. 29. It is submitted that the petitioner has declared the sales turnover of only Rs. 10,65,71,282/- and thus there was a escaped turnover of Rs. 9,16,08,150/- which has been correctly arrived. That apart, it is submitted that there are several other issues which have been considered in the impugned order dated 01.06.2022 and therefore the impugned order dated 01.06.2022 does not warrant any interference under Article 226 of the Constitution of India and therefore the petitioner should be asked to approach the Appellate Authority. 30. I have considered the arguments advanced by the learned Senior Counsel for the petitioner and the learned Government Advocate for the respondent. 31. Section 5(1) of the TNVAT Act, 2006 is the charging provisions for works contract. The taxable turnover is to be determined under Rule 8(5) of the TN VAT Rules,2007. Only the amounts specified in Clauses (a) to (i) to Rule 8(5) of the TNVAT Rules, 2007 are to be allowed to be deducted for determining the taxable turnover in the case of works contract. 32. Section 5(1) of the TNVAT Act, 2006 and Rule 8(5) of the TNVAT Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable by the customer, in respect of unexecuted portion of works contract based on the corrections on account of measurements or check measurements, subject to the conditions that (i) the turnover was included in the return and tax paid; and (ii) the amount including the tax collected from the customer is refunded or adjusted, within a period of six months from the due date for filing of the return in which the said amount was included and tax paid. (*See the next paragraph) 33. Table to Rule 8(5)(d) of TNVAT Rules, 2007 reads as under:- Sl. No. Type of works contract Labour or other charges as a percentage value of the works contract (1) (2) (3) 1. Electrical Contracts 15 2. All structural contracts 15 3. Sanitary contracts 25 4. Watch and / or clock repair contracts 50 5. Dyeing contracts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006. Merely on surmise and approximation the respondent dealer had chosen to adopt 5% Gross Profit to arrive the deemed sales turnover. Thus the Assessing Officer is left with no other options except to follow the convention and procedures as being adopted by other dealers of this type of business namely civil works contractors adopting 10% Gross Profit to arrive deemed sale turnover under Section 5 of the TNVAT Act 2006. 41. The said decision was upheld by the Hon ble Division Bench of this Court. The Tribunal had concluded that the Assessing Officer has rightly assessed VAT liability by adding 10% on the gross profit on the purchase turnover recorded under 4% and 12.5% of the commodities respectively. 42. The Hon'ble Division Bench of this Court took note of the nature of the project executed and the gross profit earned and after considering the audited Profit Loss Account, balance sheet and the certificate issued by the Chartered Accountant for the relevant year. 43. It also has to be kept in mind that as per Section 13 of the TNVAT Act, 2006, every person responsible for paying any sum to any dealer for execution of works contract, shall at the time of paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contract under Section 5 and same is acceptable. 52. At the same time, it also states that there was a huge difference in the works contract receipt, reported in the returns in the Profit and Loss Account. The stand of the respondent that it has not been properly explained with supporting documents by the petitioner is acceptable. 53. The petitioner was required to determine the taxable turnover out of Rs. 28,31,13,474/- reported in the Profit Loss Account for the works contract rendered to Greater Corporation of Chennai strictly in accordance of Rule 8(5) of the TN VAT Rules, 2007. 54. There, is no other method prescribed under Rule 8(5) of the TN VAT Rules, 2007. When law mandates a particular thing to be done in a particular manner, then it has to be done in that manner. This is accepted position of law. This principle was laid down by the Privy Council in Nazir Ahmad Vs. King Emperor , AIR 1936 PC 253 (II). The said principle has followed by the Hon'ble Supreme Court in several cases. 55. Attention is invited to the decision of the Hon ble Supreme Court in State of U.P. Vs. Singhara Singh , AIR 1964 SC 358 and a recent decision of the Hon'ble Suprem ..... 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