9911796707
TMI Blog2007 (5) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1994, deductions at the rate of two per cent of the value of contract were to be made towards tax payable by the contractor in case the works contract exceeds a value of Rs. one lac. Since the contract of the petitioner did not involve essentially supply of goods, the petitioner applied for a certificate for concessional rate of deductions under section 35 of the Madhya Pradesh Commercial Tax Act, 1994, and respondent No. 3 issued a certificate under section 35A of the Madhya Pradesh Commercial Tax Act, 1994 to the effect that deductions from the value of contract of the petitioner would be made at concessional rate of 0.5 per cent instead of two per cent. Thereafter, the Madhya Pradesh VAT Act, 2002 came into force with effect fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a concessional rate. Accordingly, the petitioner applied for a certificate for deduction of tax at concessional rate under section 27 of the Madhya Pradesh VAT Act, 2002, and was also granted such certificate on June 2, 2006 to the effect that payment to the petitioner up to Rs. 20 crores could be made by respondent No. 4 without deduction of any amount towards tax under the M.P. VAT Act, 2002. But, subsequently, the certificate granted under section 27 of the Madhya Pradesh VAT Act, 2002 was cancelled by respondent No. 3 on December 2, 2005 with retrospective effect from the date the certificate was granted because of omission of section 27 of the Madhya Pradesh VAT Act, 2002, by the Second Amendment Madhya Pradesh VAT Act, 2006 with ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch in Jaiprakash Associates Ltd. [2007] 6 VST 1 (MP) has found that section 35(1) of the Madhya Pradesh Commercial Tax Act, 1994 did not provide for excluding from the value of works contract, sales made outside the State, sales made in the course of inter-State trade and commerce and sales made in the course of export and import although these transactions were not exigible to tax under the Madhya Pradesh Commercial Tax Act, 1994. He further submitted that sub-section (2) of section 26 of the Madhya Pradesh VAT Act, 2002 as also section 35(1) of the Madhya Pradesh Commercial Tax Act, 1994 did not provide for exclusion of value of labour and services from the value of the contract for the purpose of deduction of sales tax at source and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetence of the State Legislature and as ultra vires the Constitution. We have considered the aforesaid submissions of Mr. Sumit Nema and Mr. Sanjay K. Agrawal and we find that section 26(2) of the Madhya Pradesh VAT Act, 2002 as it stood prior to its amendment by the Madhya Pradesh VAT (Amendment) Act, 2007 is identically worded as section 35(1) of the Madhya Pradesh Commercial Tax Act, 1994. In other words, section 26(2) of the Madhya Pradesh VAT Act, 2002 prior to its amendment by the Madhya Pradesh VAT (Amendment) Act, 2007, did not provide for exclusion of value of labour and services. Hence, all deductions made from the bills of the petitioner by respondent No. 4 in accordance with section 26(2) of the Madhya Pradesh VAT Act, 2002, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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