2016 (1) TMI 141 - HC - VAT and Sales Tax

Works contract service - TDS - Rajasthan Value Added Tax Act, 2006 - Held that - Court after perusing the present petition and without expressing any opinion on the merits of the case, we dispose of the present petition with liberty to the petitioner to file a detailed and comprehensive reply raising all the pleas as raised in the present writ petition within a period of two weeks from the date of receipt of certified copy of this order before respondent No.3 who shall decide the same in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of four weeks from the date of receipt of the reply. The petitioner shall be entitled to lead any evidence to substantiate its claim before the concerned authority. It is further directed that in case it is found that the petitioner is entitled to the amount of refund, the same be paid to the petitioner - Petition disposed of.

Summary

Issues:
1. Refund of deducted amount by respondent No.5 to the petitioner.

Analysis:
The petitioner, engaged in works contract in Rajasthan and Haryana, sought a writ of mandamus for the refund of the amount deducted by respondent No.5 and deposited with the Sales Tax Department. The petitioner, a Public Limited Company, entered into a service agreement with respondent No.5 for executing works without any transfer of property in goods. Despite being registered under various tax laws and having no service tax liability in the contract, respondent No.5 deducted Tax Deducted at Source (TDS) on payments made to the petitioner. The petitioner contended that as the transactions were in the course of inter-State trade and commerce with no transfer of property in goods, there was no provision for TDS deduction. The Sales Tax Department was approached, but respondent No.5 did not respond to submissions, leading to the writ petition.

The petitioner's counsel argued that despite filing a reply to respondent No.5's letter, no action was taken. The counsel requested permission to submit a detailed reply to the appropriate authority, incorporating the grievances raised in the writ petition. The petitioner sought a direction for the concerned authority to promptly decide on the reply in accordance with the law.

The Court, after hearing the petitioner's counsel, disposed of the petition with liberty for the petitioner to file a comprehensive reply within two weeks before respondent No.3. The authority was directed to decide on the reply by passing a speaking order after providing an opportunity for the petitioner to be heard within four weeks. The petitioner was allowed to present evidence to support its claim. If the petitioner was found entitled to a refund, it was ordered to be paid within two weeks in accordance with the law.