ASHOK KUMAR GARG Vs. UNION OF INDIA

JUDGEMENT

(1.) Is the sales tax leviable on the supply of man-power by a contractor in view of the provisions of the Punjab General Sales Tax (Amendment) Act, 1997 A few facts as relevant for the decision of this case may be briefly noticed.

(2.) The Divisional Engineer, Telephones, invited tenders for the supply of labour. In response to this notice, the petitioner submitted a tender. Vide letter dated March 10, 1998, the petitioner was informed that the General Manager had conveyed approval of the rates quoted by him. He was called upon to execute an agreement. On March 18, 1998, the agreement was executed. It was, inter alia, provided that "the man-power shall be charged Rs. 84 per day per labour (or)". It appears that the petitioner was periodically submitting the bills. Respondent Nos. 2 and 3 sanctioned the payment after deduction of the income-tax and the sales tax at 2 per cent each. To illustrate for the month of September, 1998, it was found that the petitioner has supplied 260 labourers at Rs. 84 per labourer. The petitioner was entitled to a payment of Rs. 21,840. However, deduction was ordered to be made at 2 per cent on account of income-tax and sales tax. Thus, Rs. 437 were ordered to be deducted on account of sales tax. An equal amount had also to be deducted on account of income-tax. Accordingly, the bill was sanctioned for payment of Rs. 20,966. Similar was the position in regard to another bill. Copies of these two bills/payment orders have been produced as annexures P.5 and P.6 with the writ petition.

(3.) The petitioner complains that according to the agreement, he was "required to supply man-power and not any material on which sales tax is leviable nor...has supplied any goods on account of which sales tax could be deducted...". Thus, he prays that the action of the respondents in making the deduction be set aside and that they be directed "not to deduct sales tax from the labour bills...in future...". He also prays for the refund of the amount already deducted.