RELIANCE GENERATORS P LTD Vs. SALES TAX OFFICER WORKS CONTRACT/LUXURY TAX PEROORKADA THIRUVANANTHAPURAM

JUDGEMENT

(1.) PETITIONER in both the original petitions is a contractor engaged in the supply as well as installation of generators for B. S. N. L. PETITIONERs are registered dealers before the Sales Tax Officer, Works Contract, the 2nd respondent. PETITIONERs raise various contentions, which are briefly stated hereunder. Firstly, petitioner should not be subjected to tax at 10 per cent as against 4 per cent leviable to the petitioner by virtue of S. R. O. No. 1728/93 read with S. R. O. No. 1091/99. Secondly, according to the petitioner, awarder is to remit tax and when there is failure on the part of the awarder to remit tax, it is for the department to recover tax from the awarder under section 7 (10) of the Kerala General Sales Tax Act, 1963. Thirdly, the department cannot issue garnishee order in form No. 16 to the awarder for payment of tax assessed on the petitioner.

(2.) I have heard the learned counsel for the petitioner and also the Government Pleader and the Standing Counsel for the B. S. N. L. The provisions of the KGST Act with regard to the payment of tax, deduction of tax by the awarders, etc. , provide for settling the disputes between the parties by statutory authorities. Therefore, primarily the matter has to be taken before the statutory authority for taking decision. The petitioner being a registered dealer under the Act before the Sales Tax Officer, Works Contract, Thiruvananthapuram, can always approach the said officer with a request for issuing certificate under rule 22a (3) of the Kerala General Sales Tax Rules, 1963, to enable the petitioner to receive payment without deduction of tax or at lower rate, if the petitioner is eligible for either of these benefits. The certificate will be issued by the officer if the officer is satisfied that the petitioner is regular in payment of monthly tax. Similarly, petitioner's claim for concessional rate at 4 per cent on supplies to B. S. N. L. by notification S. R. O. No. 1728/93 is a matter to be decided by the Sales Tax Officer, Works contract and if he declines, the petitioner is free to challenge such order in appeal. Besides, the petitioner can also invoke the powers of the Commissioner of Commercial Taxes under section 59a for a clarification as to whether the benefit of the notification given for supplies to the telecom department will be available to the B. S. N. L. on obtaining the declaration from them.

(3.) THE contention of the petitioner is that tax is to be recovered from awarder and not from them cannot be accepted because it is only an option left to the department in the event of default by the assessee. THE contractor like any other dealer has to file returns and claim credit of tax deducted and paid by the awarder on the basis of the certificates issued. Moreover, section 7 (10) provides for assessment and recovery of tax and levy of penalty from the awarder arises only when the awarder fails to deduct tax from the contractor's bills. Since in this case B. S. N. L. is deducting sales tax from the petitioner's bills, section 7 (10) will not be applicable and the assessments have to be completed in the name of the petitioner. However, the petitioner is entitled to credit of tax paid by B. S. N. L. in petitioner's account or in their behalf. Moreover, section 7 (10) of the Act providing for recovery of tax from the awarder does not absolve the petitioners of their liabilities under the Act. B. S. N. L. will continue to deduct tax from the petitioner's bills unless the petitioner gets certificate from the assessing officer as stated above authorising payment without deduction of tax.