BHAT CONSTRUCTIONS Vs. STATE OF J&K

JUDGEMENT

(1.) Notification SRO 117 dated 30.3.2007 is called in question in this petition. It is also prayed that respondents be directed to release the payment in favour of the petitioner without charging service tax imposed w.e.f. 1.4.2007. It is further prayed that respondents be prohibited from imposing and charging service tax on the works executed by the petitioner. On issuance of notice the respondents have filed reply affidavit.

(2.) Mr. Bhat, learned counsel for the petitioner submitted that section 4 of the J & K General Sales Tax Act 1962 (for short Act of 1962) does not authorize levying of service tax; learned counsel further submitted that the petitioner was to pay service tax at the rate of 4 per cent when NIT was issued and after execution of the allotted work the rate of service tax has been enhanced from 4 per cent to 8 per cent which the petitioner is not liable to pay; learned counsel further submitted that the petitioner has been subjected to double taxation inasmuch as he had already paid sales tax on the raw material which was used in the execution of the contract work and therefore, he could not further be charged with the taxes on these goods. Learned counsel accordingly prayed that writ petition be allowed.

(3.) Learned counsel further submitted that in terms of 16-C of the Act of 1962 the authority has already deducted the sales tax and in terms of court order same is retained by the said authority and till date has not been paid to the Sales Tax department.