2018 (2) TMI 1814 - HC - VAT and Sales Tax

Adjustment of amount payable - remittance of the amount - KVAT Act - Amnesty Scheme - Held that - There is no difficulty in issuing the direction sought by the petitioners, if the first petitioner executes the supplementary agreement required to be executed by them. As far as the work covered by Ext.P2 agreement is concerned, it is admitted by the petitioners themselves that the work has been executed by another contractor. True, the petitioners have made the said contractor as a party to this proceedings and the said contractor has not appeared on receipt of notice. But, according to me, that by itself is not sufficient to issue the direction sought by the petitioners. The writ petition is disposed of directing the Board to transmit the amounts due to the first petitioner in respect of the work covered by Ext.P1 agreement to the second respondent to be adjusted against the amounts payable by the petitioners in terms of Ext.P6 order, if the first petitioner executes all the requisite agreements/documents for effecting the payments due.

Summary

Issues involved:
1. Disbursement of amounts due to the first petitioner from the Board in connection with works covered by Exts.P1 and P2 agreements.
2. Settlement of liability to pay Value Added Tax under the Amnesty Scheme.
3. Dispute regarding the work executed by another contractor under Ext.P2 agreement.
4. Request for appropriate directions to the Board for remittance of due amounts.

Analysis:

1. The first issue pertains to the disbursement of amounts due to the first petitioner from the Board for works covered by Exts.P1 and P2 agreements. The first petitioner, a partnership firm engaged in civil works, seeks payment of due amounts from the Board. The Board admits the amounts due but requires supplementary agreements and clearance certificates under the Value Added Tax Act for disbursement. The court directs the Board to transmit the amounts due under Ext.P1 agreement to be adjusted against the amounts payable by the petitioners in terms of Ext.P6 order upon execution of requisite agreements.

2. The second issue involves the settlement of the first petitioner's liability to pay Value Added Tax under the Amnesty Scheme. The first petitioner applied for settlement under the scheme and was permitted to pay a specified amount. The petitioners express willingness to settle the liability if the Board remits the due amounts to them. The court's decision to direct the Board to transmit the amounts due from Ext.P1 agreement aligns with this issue, ensuring the settlement of the tax liability.

3. The third issue relates to a dispute concerning the work executed by another contractor under Ext.P2 agreement. The first petitioner executed an irrevocable power of attorney in favor of this contractor, who completed the work. The Board requires a no objection certificate from the contractor for releasing the due amount. The court notes the dispute between the petitioners and the contractor, emphasizing the need for a bonafide resolution. It declines to direct the Board to remit the amounts due for the work executed by the contractor, considering the unresolved dispute.

4. The final issue involves the petitioners' request for appropriate directions to the Board for remittance of due amounts. The court's decision to dispose of the writ petition by directing the Board to transmit the amounts due from Ext.P1 agreement for adjusting against the tax liability, upon fulfillment of necessary agreements, addresses this request. The judgment emphasizes the importance of executing required agreements/documents for effecting payments due, ensuring compliance with legal procedures.