2010 (2) TMI 1075 - HC - VAT and Sales Tax

Best judgment assessment with respect to the taxable turnover of the petitioner for having executed works contract within the Sasaram Circle, and has assessed it to tax under the Bihar Finance Act, 1981 Held that - There was no material to show that the main contractor had paid the taxes. It is a possible situation that the privity of contract may be between the authority and the petitioner. On a perusal of the impugned orders, it is evident that the learned assessing officer acted with full fairness, giving repeated opportunities to the petitioner to produce materials and documents in support of its case and was driven to the course of best judgment assessment. As stated above, the petitioner has/had the audacity of not submitting its returns except for one quarter and that too showing gross turnover as nil. t the learned assessing officer acted with great care and caution in determining the taxable turnover of the petitioner and has reached the conclusions which are essentially in the domain of facts. In exercise of writ jurisdiction, we do not find it possible to examine the same. W.P. dismissed.

Summary

Issues:
Challenge to assessment orders for works contract under Bihar Finance Act, 1981.

Analysis:
The writ petition challenges assessment orders passed by the Assistant Commissioner of Commercial Taxes for best judgment assessment of taxable turnover related to works contract within Sasaram Circle under the Bihar Finance Act, 1981. The petitioner, a sub-contractor, contends that the main contractor has already paid taxes for the works contract. The petitioner failed to submit returns before the assessing officer, except for one quarter. The assessing officer provided multiple opportunities for the petitioner to present supporting documents, but the petitioner did not comply, leading to a best judgment assessment due to the lack of material. The petitioner's attempt to shift the burden of proof onto the main contractor was unsuccessful, as there was no evidence of the main contractor's tax payments. The court found that the assessing officer acted fairly and cautiously, and the petitioner's failure to provide necessary information led to the assessment. The court upheld the assessing officer's conclusions, emphasizing that it cannot delve into factual determinations in a writ jurisdiction.

The petitioner's reliance on judgments prohibiting double taxation in works contracts was dismissed by the court. The court noted that while double taxation is impermissible, it is possible for the sub-contractor to bear the entire tax liability as per the contract terms. Since the petitioner failed to present a case before the assessing officer, the cited judgments were deemed inapplicable. The court highlighted that the assessing officer's conclusions were not grossly unjust or arbitrary, and the petitioner's attempt to challenge the assessment based on irrelevant materials was rejected. Ultimately, the court found no merit in the writ petition and dismissed it without costs.