2017 (6) TMI 1199 - HC - VAT and Sales Tax

Issuance of Form-S - deduction of tax at source under the provisions of the Tamil Nadu Value Added Tax Act, 2006 in the hands of the appellant in respect of the inter-State works contract executed by the appellant head office at Rajasthan - Held that - If, according to the appellant, the assessments are deemed to have been completed for the relevant years, then, the appellant should approach the concerned assessing officer with such a plea so as to obtain appropriate communication to enable him, not only to get the bank guarantee of ₹ 5,00,000 furnished to the first respondent revoked and also to enable him to revoke the bank guarantee furnished to the respondents 2 and 3. The writ appeals are disposed of, by directing the appellant to approach the first respondent/assessing officer by way of a detailed representation requesting for release of the bank guarantees - appeal disposed off.

Summary

Issues:
Appeal against order dated April 20, 2017 - Writ of certiorarified mandamus - Writ of prohibition - Deduction of tax at source under Tamil Nadu Value Added Tax Act, 2006 - Bank guarantee issue - Deemed completion of assessments - Necessity for form S - Revisional authority's role - Appellant's plea for release of bank guarantees.

Analysis:
The judgment involved two writ appeals challenging an order dated April 20, 2017, related to the issuance of a writ of certiorarified mandamus and a writ of prohibition. The first appeal sought to quash the order of the first respondent and obtain form S, while the second appeal aimed to prevent the deduction of tax at source for inter-State works contracts. The writ petitions were directed to the revisional authority for further substantiation due to disputed factual questions. The appellant voluntarily provided bank guarantees to prove bona fide, leading to a direction to approach the revisional authority within a specified timeframe.

The appellant argued that assessments for relevant years were deemed completed under section 22(2) of the Tamil Nadu Value Added Tax Act, 2006, with no further proceedings initiated by the assessing officer. Despite nil returns being accepted, a challenge arose concerning the bank guarantees furnished by the appellant. The issue centered on whether tax should have been deducted at source, prompting the appellant to seek communication from the assessing officer to revoke the bank guarantees.

In the final disposition, the court modified the direction issued by the writ court, instructing the appellant to approach the first respondent/assessing officer with a detailed representation to request the release of bank guarantees. The first respondent was directed to consider the representation after providing a hearing to the appellant and issue a reasoned order within a specified timeline. The appellant was given four weeks to submit the representation, with a subsequent decision to be made within another four weeks. No costs were awarded in this judgment.