9911796707
TMI Blog1999 (2) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... tor other than the civil work construction to pay tax at the rate of seventy per cent shown in the Fourth Schedule. Proviso to sub-section (7A) states that if the contractor s contracted amount does not exceed rupees fifty lakhs, he can opt to pay tax at five per cent of such contracted amount. 2.. Sub-section (7B), as it stood prior to April 1, 1998, obliged that every awarder shall deduct at the rate of 2 per cent in respect of civil contracts and 5 per cent in respect of other contracts. Subsequently section 7(7B) of the Act is amended by the Kerala Finance Act, 1998 (Act 14 of 1998) making a distinction between registered contractor and unregistered contractor. In case of unregistered contractor the awarder has to deduct 70 per cent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been deducted. Every contractor including the petitioners who want to opt to pay at the compounded rate has to make an application under sub-section (8) of section 7. Sub-section (8) states that the option has to be exercised either by an application or by an express provision in the agreement. Rule 30 of the Kerala General Sales Tax Rules, 1963 states that every dealer who decides to exercise option has to make an application for permission in a prescribed form on or before the first day of May of the year to which the option relates. Sub-rule (2) provides for the assessing authority to conduct necessary enquiries and after which he shall pass an order granting or rejecting the application. A dealer is obliged to submit annual return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. They being unregistered contractors, form a separate class of contractors. They are liable to pay the tax as per section 5(1)(iv) and a direction to deduct 70 per cent of the rates, therefore, cannot be held to be unreasonable. If the contractors make an application for option, they may have to take out the registration under section 13 since they may come within the requirements. They cannot avoid taking registration and at the same time get the compounding. This provision being a provision for collection of tax must be liberally construed so as to avoid the evasion of tax. The following observation of their Lordships in State of Kerala v. Builders Association of India [1997] 104 STC 134 (SC); (1997) KLT 88 (SC) will apply to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
