9911796707
TMI Blog1997 (5) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... mount was not liable to be deducted at the time of making advance towards the mobilisation advance. 2.. The petitioner is an engineering and construction concern. By an agreement dated September 19, 1996 with the Governor of Haryana acting through Chief Engineer, Construction Unit (1), Haryana, the petitioner undertook, the construction of Hathni Kund Barrage, and its appurtenant works. One of the terms of the agreement was sub-clause 60.7 at annexure P-3 its caption is advance payment . That clause is divided into clauses (a), (b), and (c). Clause (a) states that the employer (respondent 3) will make an advance at the rate of 12 per cent interest to the contractor (petitioner) exclusively for the costs of mobilisation in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the contractor in respect of the work done. With this position on hand, I proceed to consider the clause under which the deduction was sought at the time of making the advance itself. For ready reference, relevant portion of section 25-B of the Haryana General Sales Tax Act is reproduced below: 25-B.-(1) Notwithstanding anything to the contrary contained in any other provisions of this Act, any contractee responsible for making any payment or discharging any liability on account of the valuable consideration payable for the execution of a works contract involving transfer of property in goods (whether as goods or in some other form), shall, at the time of credit to the account of or payment to the payee of such valuable considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tains to payment given as a loan so as to enable the contractor to obtain machinery, equipments, and other resources for the purpose of executing the work undertaken. The inference that it is a loan, is further fortified on finding that such an advance is at a rate of interest, and the recovery of the capital amount and the interest on it, is to be effected from the payments to be made in respect of the work executed from time to time. The liability to deduct the sales tax under section 25-B of the said Act would arise at the time of making payment towards the running account bill of the work executed up to the date of payment. The recovery of the advance amount would be by way of deduction or adjustment of accounts as per clause (c). Nonet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a deduction of Rs. 16,25,000 be adjusted towards the running account of the contractor, and the adjustment is to be done in accordance with sub-clause 60.7 referred above. 7.. The petitioner seeks quashing of the letter annexure P-6. That letter is only a direction to intimate the payment received in respect of the work executed. In view of my observation made above, it follows that the information to be supplied would be in respect of payment received for the work executed so far, and, thereafter, from time to time. Thus, the position having been made clear it would not be now necessary to quash, annexure P-6. The petition is allowed in the manner and to the extent as stated above. Petition allowed. - - TaxTMI - TMITax - CST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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