CONTRACTOR ASSOCIATION (CIVIL) RAJASTHAN RAJYA VIDYUT MANDAL Vs. RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD

JUDGEMENT

(1.) THE petitioner, Contractor Association (Civil) Rajasthan Rajya Vidyut Mandal, Jodhpur, has filed this writ petition to espouse the common cause of its members against the respondent - -Rajasthan Rajya Vidyut Prasaran Nigam Ltd. ('Nigam' for short) inter alia challenging the impugned action of the respondent Nigam of deducting 50 per cent of the service -tax imposed under the provisions of the Finance Act, 1994, as amended from time to time, from the running/final bills of members of the petitioner association, namely, the various individual contractors, who executed the works contracts of raising civil construction for the respondent Nigam. By consent of learned counsel, the matter was heard finally at the admission stage itself.

(2.) MR . Dinesh Mehta, learned counsel for the petitioner association, mainly raised the following contentions:

(3.) ON the merits of the writ petition, without prejudice to the preliminary objections raised by him, Mr. R.K. Agarwal, senior advocate also urged that the liability to pay the service -tax is admittedly on the service provider i.e., the contractors under s. 68(1) of the Act and under s. 68(2) of the Act in case of individual contractors except body corporates, who are liable to regular audit and compliance with the various provisions of the Companies Act and other relevant statutes, such liability to pay 50 per cent of the service -tax has been shifted to the respondent Nigam and other body corporates, who are awarders of such contracts and with this change in law, in the absence of any terms in the contract itself, the respondent Nigam is perfectly justified in deducting 50 per cent of the service -tax at source while making payment of the bills to the contractors and depositing the same in public exchequer and no challenge can be made to the same. Learned counsel Mr. R.K. Agarwal relied on the decision of Supreme Court in the case of All India Federation of Tax Practitioners & Ors. vs. Union of India & Ors. : (2007) 211 CTR (SC) 449 : (2007) 7 SCC 527 and decision of Andhra Pradesh High Court in the case of Bhagyanagar Contractors Welfare Association vs. Managing Director, M.W.S. & Sewerage Board & Ors. : 2003 (4) ALD 489 (AP), which would be referred hereinafter.