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Gauhati High Court · body

2002 DIGILAW 197 (GAU)

Eleco Construction Co. v. State of Assam

2002-05-10

N.SURJAMANI SINGH

body2002
N.S. SINGH, J.— Upon hearing Mr G.K. Joshi, learned counsel for the petitioners and Mr A.C. Buragphain, senior GA, Assam and also on perusal of the available materials on record, I am of the view that this matter can be disposed of at this stage considering the simple nature of the case. Accordingly, it is disposed of on its own merits with the following short order. 2. The petitioners herein questioned the validity of the deduction of sales tax at source under Section 27 of the Assam General Sales Tax Act, 1993 (hereinafter referred as "the Act of 1993") by the respondent Nos. 3, 4 and 5 from the bills of the petitioner No. 1 in respect of the works contract executed by the petitioners by contending, inter alia, that it is a failure on the part of the Commissioner of Taxes, Assam, in clarifying the correct legal position in respect of the tax deduction at source under Section 27 of the Act of 1993 and Rule 35 of the Assam General Sales Tax Rules, 1993. According to Mr Joshi, this legal issue had already been examined by this Court and this Court had decided the issue finally and it has attained the finality for ever as there is no appeal and, this order has not been set aside as yet. In support of his contention, the learned counsel for the petitioners has produced a copy of the judgment and order dated 26.3.2002 passed by this Court in as many as 456 cases including CR No. 5161/96, 2002(1)GLT482. 3. I have perused the relevant observations and finding of this Court in CR No. 5161/96 and others which finds its place in paragraph-16 of the judgment and relevant portion of it is quoted below: "It is well settled proposition of law that generally the Courts would like to maintain the provision of law, if possible, and even if by reading down the provision, if required. Following the majority decision in the case of 20th Century Finance Corpn. Following the majority decision in the case of 20th Century Finance Corpn. Ltd. and another- Vs-State of Maharashtra, reported in (2000)6 SCC 12 , we hold that the provision of Section 27 of the Act should be upheld by reading it down as below:- (1) The word sale or supply of goods liable to tax under this Act appearing in Section 27 of the Act covers the supply of goods in works contract also and only those goods which are liable to tax or which are included in the taxable turnover will be subject to deduction of tax at source. (2) Section 27 of the Act will have to be read together with charging sections, namely, Sections 7 and 8 of the Act and deduction and exemption provided u/s 7 and 8 of the Act as regards the inter-State trade, declared goods, exempted goods etc. etc. shall also be applicable in case of deduction of tax at source u/s 27 of the Act. (3) The certificate under Rule 35(5) will be available to the Contractors executing works contract where deduction of tax at source u/s 27 is made. (4) In the schedule of exempted items and taxable items, which were amended vide notification dated 24th December, 1999 and 27th January, 2000. Schedule I is in respect of exemption of items and Schedule 2 provides for tax at the point of first sale. Rule 19 was amended during the pendency of this case and Rule 19(2) was amended 'omitted' w.e.f. 19th January, 2000. Prior to the omission it reads as follows:- "(2) Notwithstanding anything contained in sub-rule (1), the dealers specified in section 2(10)(iv) shall not be entitled to use the declaration in Form A. " Thus, in the light of sub-rule 2 the contractor or a lessor was not entitled to use the declaration in Form-A. The effect of exemption of the said sub-rule w.e.f. 19th January, 2000 is that, henceforth, the contractor or lessor shall be entitled to use the declaration in Form-A. Thus, when a declaration at Form-A is given by the contractor, no tax is charged from him at the time of purchase of goods described in Schedule-3 and the liability to pay tax shifts to the contractor. In view of above, after the Assam General Sales Tax Amendment Rules, 1999, the works contractor have become eligible to use declaration in Form-A. In the light of the aforesaid directions we hold that the previsions of Section 27 of the Act and Rule 8(3)(iv) of the rules are not ultra-vires and illegal and that cannot be said to be confiscatory in nature. Deduction of tax at source is permissible under the law and the above provision of law are to be red down as provided above. We may also mention here that deduction of tax at source under Section 27 of the Act is not an end of the matter and the dealers/assessee are at liberty to claim all permissible deduction if any available to them while final assessment is being made." 4. The factum of existence of this judgment and order passed by this Court is not disputed by the government advocate and apart from that, there is no dispute between the parties that the case is covered by the said judgment and order. In view of it, the petitioners shall also get the same benefit. In Bishnu Traders-Vs-State of Assam, (1995)1 SCC 461, the Apex Court held thus: "The need for consistency in approach and uniformity in the exercise of judicial discretion in respect of similar cases require that all similar matters should receive similar treatment except where the factual difference require a different treatment." 5. Following this decision of the Apex Court, this Court had also rendered certain judgments by holding that once a person got relief in a matter, another person who is Similarly statuted with that person shall also be afforded with the same relief. This is the law of land as contained under Article 14 of the Constitution. In view of the above decision the Court need not go more into depth as suffice is made with the above observation to make the following order and direction. 6. The respondents, particularly, the respondent Nos. 3, 4 and 5 are hereby restrained from making deduction of tax at source from the entire bill amount of the bills of the petitioners. However, they are at liberty to deduct tax at source from the bills of the petitioners after excluding therefrom the labour. 6. The respondents, particularly, the respondent Nos. 3, 4 and 5 are hereby restrained from making deduction of tax at source from the entire bill amount of the bills of the petitioners. However, they are at liberty to deduct tax at source from the bills of the petitioners after excluding therefrom the labour. Engineering and other service charges as well as turnover of declared goods, tax paid goods and mgoods obtained in the course of inter-State trade within India for being used in the related work in terms of the related provisions of the Act of 1993 and rules made thereof. With the above observations and direction, the writ petition is disposed of. No costs.