2017 (9) TMI 393 - HC - VAT and Sales Tax

Validity of assessment order - levy of tax - tax not deducted at source - Held that - This Court is aware of the fact that there is no privity between the first respondent and respondents 4 and 5. Therefore, there is no statutory duty on his part to cause such verification. Nevertheless, the first respondent, being the Assessing Officer of the petitioner has to ensure that there is no double taxation - slight departure can be made in the instant case, where the first respondent using his official machinery can verify from the respondents 4 and 5 as to whether the taxable turn over pertaining to the subject construction has been reported with the respondents 2 and 3 in their returns and whether taxes have been paid or in the alternative, the first respondent may address the respondents 4 and 5 for issuance of necessary declaration as sought for - petition allowed by way of remand.

Summary

Issues:
Challenge to assessment orders regarding tax deduction at source under TNVAT Act for multiple assessment years.

Analysis:
The petitioner, a registered dealer under the TNVAT Act, contested assessment orders for several years due to tax not being deducted at source. The petitioner engaged contractors for construction work, who assured they would pay the tax and provide necessary certificates. The petitioner, relying on this assurance and their organization's size, did not deduct tax at source. However, the petitioner was aware of the requirement to produce a declaration from the contractors' Assessing Officers. Despite efforts, the certificates obtained were not sufficient, leading to disputed assessments.

Regarding other issues apart from tax deduction, the petitioner appealed to the statutory appellate authority. The petitioner faced challenges in obtaining necessary declarations from the contractors' Assessing Officers promptly. Seeking relief, the petitioner requested their Assessing Officer to accept the certificates provided and verify with the contractors' Assessing Officers to avoid double taxation. While there is no direct obligation on the Assessing Officer to conduct such verification, the court acknowledged the need to prevent double taxation. Consequently, the Assessing Officer was directed to review the petitioner's application, conduct a hearing, and issue a reasoned order in compliance with the law.

In conclusion, the court disposed of the writ petitions, emphasizing the Assessing Officer's duty to ensure fair treatment and directing cooperation from the petitioner in the process. No costs were awarded, and related petitions were closed following the judgment.