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TMI Blog2007 (12) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Advocate, for the appellants. -------------------------------------------------- The judgment of the court was delivered by DR. ARIJIT PASAYAT J. Leave granted. Challenge in this appeal is to the judgment rendered by a Division Bench of the Chhattisgarh High Court. Respondent filed a writ petition before the Chhattisgarh High Court questioning constitutional validity of section 35 of the Chhattisgarh Vanijyik Kar Adhiniyam, 1994 (hereinafter referred to as, the Adhiniyam ). It corresponds to the Chhattisgarh Commercial Tax Act, 1994 (in short, the Act ). The respondent hereinafter is described as the assessee . Background facts highlighted by the respondent are as follows: The writ petitioner is a prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the contract. In such situation, it was very difficult for the Commercial Tax Department to trace out such contractors and eventually sales tax payable by such contractors could not be recovered at all thereby causing heavy financial loss to the Government. In order to safeguard the interest of the State, section 35 is enacted in the Act and that the State Legislature has legislative competence to enact section 35. It was stated that section 35 is not a unique provision in the Act and similar provisions are enacted in the Sales Tax Acts of other States, for example, section 6D of the Uttar Pradesh Trade Tax Act, 1948, section 6E of the Bengal Finance (Sales Tax) Act, 1941, section 25A of the Bihar Finance Act, 1981, section 25B of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machal Pradesh General Sales Tax Act, 1968 (in short, the Himachal Pradesh Act ). While striking down section 13AA of the Orissa Act, this court observed as follows in Steel Authority s case [2000] 3 SCC 200 See [2000] 118 STC 297 (SC).: There can be no doubt, upon a plain interpretation of section 13AA, that it is enacted for the purposes of deduction at source of the State sales tax that is payable by a contractor on the value of a works contract. For the purposes of the deduction neither the owner nor the Commissioner who issues to the contractor a certificate under section 13AA(5) is entitled to take into account the fact that the works contract involves transfer of property in goods consequent upon of an inter-State sale, an outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the purview of the State Act and those transactions in respect of which no tax can be levied even in terms of the enactment itself, such deductions have to be made in the bills or invoices of the contractors. To say that if a person is not liable for payment of tax inasmuch as on completion of the assessment refund can be obtained at a later stage is no solace, as noticed in Bhawani Cotton Mills Ltd. v. State of Punjab [1967] 20 STC 290 (SC); [1967] 3 SCR 577. Further, there is no provision for certification of the extent of the deduction that can be made by the authority. Therefore, we must hold that arbitrary and uncanalised powers have been conferred on the concerned person to deduct up to four per cent from the sum payable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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