DHINGRA CONSTRUCTION CO Vs. UNION OF INDIA

JUDGEMENT

(1.) TWO assessment orders one passed by the Sales Tax Authority in Delhi and the other by the Excise and Taxation Officer-cum-Assessing Authority Gurgaon, have been assailed in the present writ petition. The grievance of the petitioner against both these orders primarily is that the same result in double taxation in as much as the same transaction is sought to be taxed twice. The controversy arises in the following circumstances : The petitioner is a contractor registered as a dealer under the Delhi Sales Tax on Works Contract Act, 1999. It is also registered in the adjoining State of Haryana under the Haryana General Sales Tax Act. Contracts for laying and repairing roads in Delhi have been alloted to the petitioner by different agencies like NDMC, MCD, CPWD and PWD. Since no hot mix plant can be set up in the National Capital Territory of Delhi the petitioner has set up its plants in the State of Haryana from where it brings the hot mix (Rori and Bajri mixed with Bitumen) to Delhi for being used in laying roads here.

(2.) FOR the assessment year 2003-2004, the Assessing Authority under the Haryana General Sales Tax Act treated the transfer of hot mix from Haryana to Delhi in connection with the execution of the works contract as a inter-state sale and determined the taxable turn over of the petitioner at Rs. 3,66,45,948/- giving rise to a tax liability of Rs. 14,65,838/ -. FOR the same year, the assessing authorities under the Delhi Sales Tax on Works Contract Act, 1999 accepted the petitioners request for composition under section 6 read with section 7 of the said Act and recovered a sum of Rs. 32,66,867/- by way of tax deducted at source on a taxable turn over of Rs. 8,16,71,682. 50. The petitioner thus paid tax on the same transaction not only in the State of Haryana where the transaction was treated as an inter-State sale but also in Delhi where the same has been treated to be an intra-State sale.

(3.) IT was argued, on behalf of the petitioner, that aggrieved by the orders passed by the Assessing Authorities concerned and impugned in this petition, the petitioner had filed an appeal before the Central Sales Tax Appellate Authority constituted under section 19 of the Central Sales Tax Act. The purpose underlying the filing of the said appeal, it was contended, was to invite an authoritative determination of whether the transaction in question was an inter-state or intra-state and whether it would attract tax in the State of Haryana or in Delhi. Since, however, the Authority was not, according to the petitioner, functional no progress was made in that direction. After the authority became functional, the appeal filed by the petitioner was transferred by it to the Haryana Sales Tax Appellate Tribunal for hearing and disposal where the same is presently pending. IT was submitted that this Court could itself determine the nature of the transaction and the tax liability arising from the same instead of waiting for an adjudication from the Tribunal especially when the Delhi Administration was not a party to the proceedings before the Tribunal in Haryana and even if it is impleaded as a party respondent to the said proceedings it may not appear to facilitate a proper adjudication of the issue that arises for consideration. Reliance was placed by the learned counsel upon the decision of the Supreme Court in Gail India Ltd. v. Sales Tax Officer, (2005) 10 SCC 192 in support of the submission that determination of the nature of transaction in cases where two States claim the right to recover taxes on the same transaction was necessary.