1994 (9) TMI 327 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge against the deduction of tax at source from running bills.
2. Constitutionality of provisions of the Rajasthan Sales Tax Act and Rules.
3. Retrospective amendment of the Rajasthan Sales Tax Act.
4. Determination of turnover in works contract.
5. Exclusion of tax on goods already transferred in works contract.
6. Applicability of tax in works contract where minimal material is utilized.
7. Reference to a judgment without providing particulars.

Analysis:

1. The petitioner challenged the deduction of tax at source from running bills, citing a contract with Oil and Natural Gas Commission. The petitioner argued that no tax should be deducted as per the contract terms. However, the court noted that the tax rate had been amended to 1.5% from 3%, and the petitioner should have informed the authorities about the change. The court emphasized that the assessment had not been made yet, so directing against the levy of tax at 3% was premature.

2. The constitutionality of the provisions of the Rajasthan Sales Tax Act and Rules was questioned, referring to a previous apex court decision. The court highlighted the retrospective amendment made in 1994, which altered the taxation on works contracts. The court emphasized that the petitioner should have challenged the validity of the amended section if deemed illegal. The current provisions of section 5 were to be followed, which determined tax rates in accordance with subsection (1).

3. The retrospective amendment of the Rajasthan Sales Tax Act in 1994 was discussed, which impacted the taxation on works contracts. The court stressed that the amended section had not been challenged for its validity, and therefore, the existing provisions had to be enforced. The court detailed the provisions of section 5 and the determination of turnover in works contracts under the Act.

4. The court analyzed the determination of turnover in works contracts, emphasizing the exclusion of goods already taxed or not liable to tax. The taxable turnover was to be calculated as per the Act and Rules, with deductions as provided. The court rejected the contention that sufficient provisions did not exist for the levy of tax under the Rajasthan Sales Tax Act.

5. The applicability of tax in works contracts where minimal material was utilized was discussed. The court pointed out that service contracts were excluded, and if material used was up to 15% of the contract value, no tax was levied. The petitioner was advised to seek a certificate from the assessing authority if entitled to exemption, but such matters could not be resolved under extraordinary writ jurisdiction.

6. The petitioner referenced a judgment of a Division Bench without providing particulars or a copy. The court emphasized that when citing judgments, it was essential to provide details or copies for consideration. As the petitioner failed to furnish the judgment, it could not be taken into account. Consequently, the writ petition was dismissed with the observations made by the court.