9911796707
TMI Blog2016 (12) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on account of delayed payment of tax was levied - On account of proofs attached by the appellant along with the returns showing payment of tax on his behalf by the contractees, deduction to the tune of ₹ 94,05,576/- was granted - Appeal disposed of. - VATAP No. 111 of 2012 (O&M) - - - Dated:- 9-12-2016 - Mr. Rajesh Bindal and Mr. Harinder Singh Sidhu, JJ. For The Appellant : Mr. Avneesh Jhingan, Advocate For The Respondent : Ms. Mamta Singla Talwar, Deputy Advocate General, Haryana Rajesh Bindal, J. 1. The assessee is in appeal against the order dated 9.8.2011 passed by the Value Added Tax Tribunal, Haryana, Chandigarh. The substantial questions of law as pressed at the time of final hearing are as under:- i) Whether in the facts and circumstances of the case on combined reading of Section 14(6), Section 24 and Rule 33, can interest be charged from the contractor for late deposit of TDS by contractee ? ii) Whether in the facts and circumstances of the case the liability of the contractor to deposit tax due according to the returns can be extended to mean that he is liable for timely deposit of TDS deducted by the contractee ? 2. Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides for procedure for deduction of tax at source and deposit with the department. The tax is to be deducted monthly and to be deposited with the department in next 15 days after the close of the month. Original copy of the challan is to be affixed with the return to be filed by the contractee and 5th copy is to be furnished to the contractor as a certificate of tax deduction and payment, who is to annex the same with his return to claim the credit thereof. 5. Section 14 of the Act provides for filing of return and payment of tax. On failure to make payment of tax in accordance with the provisions of the Act and the Rules, there is liability to pay interest under Section 14(6) of the Act. 6. As per Rule 49(3) of the Rules, a contractor opting to pay tax on lump sum basis is liable to make payment of tax calculated @ 4% of the payments received or receivable by him during the quarter for execution of a contract. The payment of lump sum so calculated is to be made within thirty days following the close of the quarter after reducing the amount paid on his behalf by any contractee under Section 24 of the Act for that quarter. The receipt for proof of the amount paid by the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but no action was taken against the contractee. 11. On the other hand, learned counsel for the State submitted that a contractor is liable to be registered under the Act, whereas a contractee is not. Concept of levy of tax and penalty are different. Special provisions providing for TDS under Section 24 of the Act talk about levy of penalty. Only this action can be taken against the contractee. Against the contractor, the action can be taken under Section 14(6) of the Act. In case a contractee is a registered dealer then only the provisions of the Section 14(6) of the Act will apply. Interest is to be charged and the contractee is liable to pay the same. There is liability on the appellant to file returns and deposit tax. He is entitled to claim credit of the amount of tax deducted/ paid on his behalf by a contractee. Balance amount is to be paid by him along with the returns. The payment is to be made every quarter within 30 days from the close of quarter. As the liability to pay tax on the transaction is of the contractor, he is liable to pay tax. In case of default, he is liable for payment of interest and penalty. The collection of tax from a contractee is merely an advance p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government may, having regard to the effective recovery of tax, require in respect of contractors or any other class or classes of dealers that any person making payment of any valuable consideration to them for the execution of a works contract in the State involving transfer of property in goods, whether as goods or in some other form or for sale of goods in the State, as the case may be, shall, at the time of making payment, whether by cash, adjustment, credit to the account, recovery of dues or in any other manner, deduct tax in advance therefrom which shall be calculated by multiplying the amount paid in any manner with such rate not exceeding ten per cent, as the State Government may, by notification in the Official Gazette, specify and different rates may be specified for different works contracts or class or classes of dealers, and that such person shall keep record, of the payments made and, of the tax deducted in advance therefrom, for a period of five years from the close of the year when the payments were made and shall produce such record before the prescribed authority when so required for carrying out the purposes of this Act. (2) The provisions of sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dealers who are required by the assessing authority to file returns by serving upon them a notice in Form VAT-N1 under clause (b) of subsection (2) of section 14 so long as they are not covered by entry 3 below. Quarter VAT-R12 2 Registered dealers in whose case composition of tax under section 9 is made and is in force As specified in the relevant rule relating to payment of lump sum for the specified class of dealers 3 Registered dealers holding registration certificate or whose application for registration is pending and who are not covered under entry 2 above Quarter VAT-R1 4 Government agencies, public sector undertakings or corporations procuring food grains in the State at the minimum support price who are liable to deduct tax in advance under sub-rule (1) of rule 33 Quarter VAT-R4 5. Contractees who are liable to deduct tax in advance under sub-rule (2) of rule 33 Quarter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy to the payee concerned as a certificate of tax deduction and payment, who shall affix it with his return. Provided that the Commissioner may by order in writing permit such person to pay by grouping a number of payees in a single challan or challans subject to each such challan showing the name of each payee and the amount deposited in respect of him separately: Provided further that such person shall provide to each payee whose name appears in the challan a self-authenticated copy of the challan: (6) The payee to whom a certificate of tax deduction and payment referred to in sub-rule (5) has been furnished shall, subject to verification of genuineness and correctness of the certificate, be entitled to deduct the amount shown in it from the amount of tax due from him for the period specified in the certificate and shall pay the balance in the manner laid down in rule 35 and any amount paid in excess shall be refundable on assessment. xx xx xx Rule 49 of the Rules Lumpsum Scheme in Respect of Contractors 1 to 2 xx xx xx (3) The lump sum contractor shall be liable to make payment of lump sum quarterly calculated at four per cent of the payments r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct tax in advance at the rates specified by the government, subject to maximum of 10%. If the amount payable by a contractee is upto ₹ 1 lac, the provisions for deduction of TDS are not applicable. The contractee is liable to furnish returns at specified intervals and pay tax in accordance with the returns, in the manner prescribed. Certificate for the tax deducted and paid is to be issued to the person on whose behalf tax was deducted and paid to Government. Any tax paid in accordance with the provisions of Section 24(2) is adjustable by payee on the authority of the certificate so issued against the tax payable by him. The claim is admissible on due verification of the payment. In case of failure of any person to deduct whole or any part of the tax to the department, the competent authority at any time within five years from the close of the year, to which the failure relates can levy penalty equal to the amount of tax which he failed to deduct or pay. 17. Rule 33 of the Rules provides for procedure for deduction of tax at source and deposit with the department. Rule 33(5) of the Rules provides that the amount of tax deducted by a contractee is to be paid by him to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax had, in fact, not been paid by the contractee and the certificate was bogus and the contractor was not party to the fraud, the position may be different. In that eventuality, cases will have to be examined in facts of a particular case. 20. In the case in hand, it is not in dispute that the appellant is a contractor executing works for different contractees. For the year in question, he got payments from them. As per provisions of the Act and the Rules, he is liable to pay the tax. His receipts are to the tune of ₹ 23,75,67,368/-. Tax payable by him was calculated at the rate of 4% to the tune of ₹ 95,02,695/-. On account of proofs attached by the appellant along with the returns showing payment of tax on his behalf by the contractees, deduction to the tune of ₹ 94,05,576/- was granted. As the assessing authority found that the tax had not been deposited in time, interest on account of delayed payment of tax was levied. As the order of assessment suggests part of the additional payment was also on account of less payment of tax. The delay in payment of tax as available in the calculation-sheet annexed with the order of assessment runs upto 1,384 days. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
