PREM KUMAR & CO.,A PROPRIETORSHIP CONCERN HAVING ITS OFFICE AT 187, MAHARSHI DEBENDRA ROAD, KOLKATA Vs. GENERAL MANAGER,EAST COAST RAILWAY,RAIL BHAWAN, CHANDRASEKHARPUR, BHUBANESWAR

JUDGEMENT

(1.) These two Writ Petitions have been filed for a direction to opp. party-railway authorities restraining them from making any deduction towards value added tax from the payments made to the Petitioner, who is a Transport Contractor and to refund the amount of tax already deducted from the payments made to the Petitioner.

(2.) Bereft of unnecessary details, the facts and circumstances giving rise to the present writ petitions are that the Petitioner is engaged in the business of transporting goods for remuneration. In pursuance of tenders issued by opposite party-Railway authorities, the Petitioner participated in the said tenders. Being found qualified, the opp. parties issued two work orders in favour of the Petitioner. The required agreements' were executed on 30.03.2009 and 04.12.2009 between the Petitioner and the Railway authorities. The nature of the work undertaken by the Petitioner is transportation of rails, PSC, sleepers, glued joints etc. from any place to the site of work including loading, unloading, rehandling and stacking as per direction of the Engineer-in-Charge. While making payment towards interim bills the Railway authorities deducted tax @ 4% from the said payment towards Value Added Tax (for short, "VAT") under Section 54 of the Orissa Value Added Tax Act, 2004 (for short, 'OVAT Act') and also issued certificates for Tax Deducted at Source (for short, 'TDS'). Being aggrieved, Petitioner has filed these writ petitions.

(3.) Mr. D.K. Dwibedi, learned Counsel appearing for the Petitioner submits that the Petitioner has been assigned with the job of transporting materials from one place to another for remuneration as fixed under the contracts and during execution of his assigned work, the ownership of the said material remains with the railways and at no point of time the same is either vested with or transferred to the Petitioner. Under the terms of contract, the Petitioner has been assigned with the work of transportation of rails, pre-stressed concrete, sleepers, glued joints etc. including loading, unloading from any place to the site of work. The rate includes all lead, lift, ascent, descent, crossing of one or more railway lines, if necessary cutting of rails from the available longer rail panel to suitable length of not less than 10 metres if required, labour, materials, all taxes, royalty, tools and plants, machineries and all other incidental charges etc. Thus, the Petitioner is merely a transporter and the activities carried on by him are not coming under Section 9 of the OVAT Act so as to make the Petitioner liable to pay tax under the said Act. The Petitioner is a bailee and his job is to transport the goods from one place to another/He is no way connected with sale or purchase of goods on behalf of the opp. parties. Neither he has any licence to sell or purchase the goods in any capacity. Therefore, the action of the opp. parties in deducting VAT from the payments made to him for undertaking transportation work is illegal and without any authority of, law. The opp. parties may be directed to return the amount of tax deducted from the payments made to the Petitioner.