2016 (4) TMI 1436 - HC - VAT and Sales Tax

Certificate of tax recovery at source in Form JVAT 400 in favour of the petitioner- firm, not issued - grievance of the petitioner is that M/s Hindustan Steel Works Construction Limited made payment to the petitioner after deducting VAT at source - HELD THAT - The writ petition is bereft of foundational facts for seeking Mandamus to the respondent M/s Hindustan Steel Works Construction Limited to issue Form JVAT 400 to the petitioner firm. The petitioner has failed to produce a document which would disclose deduction on account of VAT for the works contract by M/s Hindustan Steel Works Construction Limited, for which the respondent M/s Hindustan Steel Works Construction Limited is under a duty to issue certificate in Form JVAT 400. Reliance placed by the petitioner on a clause in the Letter of Intent which provides that the rates are inclusive of sales tax and tax on works contract and if applicable, sales tax/tax at works contract @ 2% would be deducted and TDS for the same would be issued in due course, is also misconceived. Whether any amount has been deducted by M/s Hindustan Steel Works Construction Limited from the payments made to the petitioner for which it is under a statutory duty to issue Form JVAT 400 or not is a question of fact which cannot be ascertained in the present proceeding. The petitioner kept quiet for long 7 years and did not raise a grievance for non issuance of Form JVAT 400. If at all, it is found that tax deduction at source has been done from the running bills of the petitioner still, the petitioner has failed to establish that the respondent M/s Hindustan Steel Works Construction Limited is under a legal duty to issue the said certificate. In fact, pursuant to order of the Commissioner of Commercial Taxes Department, pending assessment of the petitioner firm by the Assessing Authority, the present writ petition appears to be pre mature also. The writ petition stands disposed of with liberty to the petitioner to avail remedy under the Jharkhand Value Added Tax Act, 2005 - Application dismissed.

Summary

Issues:
1. Non-issuance of tax recovery certificate by the principal contractor to the sub-contractor.
2. Interpretation of statutory provisions regarding tax deduction at source under the Jharkhand Value Added Tax Act, 2005.
3. Maintainability of the writ petition due to lack of foundational facts and evidence.
4. Pre-maturity of the writ petition in light of pending assessment proceedings.
5. Discretion of the court to decline interference and allow remedy under the Jharkhand Value Added Tax Act, 2005.

Analysis:
1. The petitioner, a registered firm, raised concerns about the non-issuance of a tax recovery certificate by the principal contractor, M/s Hindustan Steel Works Construction Limited. The petitioner argued that under the JVAT Act, 2005, the contractee is responsible for deducting tax at source, which had been done but the certificate was not issued.

2. The respondent, M/s Hindustan Steel Works Construction Limited, contended that as per JVAT Rules, 2006, the actual contractee for the project was Bokaro Steel Plant, not the respondent. They claimed that TDS had been deducted by the principal employer, Bokaro Steel Plant, and submitted to the Commercial Tax Department.

3. The court noted the lack of foundational facts in the writ petition to support the claim for mandamus. The petitioner failed to provide evidence of VAT deduction by the respondent or the non-issuance of the required certificate. The court highlighted the petitioner's past assessments and pending revision proceedings, indicating a need for proper evidence.

4. Considering the premature nature of the petition and the ongoing assessment process, the court found the petition untimely. The court emphasized that the dispute regarding tax deduction and certificate issuance should be addressed during the assessment proceedings by the relevant authority.

5. Ultimately, the court declined to intervene in the matter, dismissing the writ petition. The petitioner was granted liberty to seek remedies under the JVAT Act, 2005, indicating that the issues raised could be resolved through the appropriate legal channels.

This detailed analysis covers the key issues raised in the judgment, providing a comprehensive understanding of the court's decision and the legal principles involved.