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TMI Blog2018 (2) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... AT 158 shall not either directly or through any other person transfer the same to another person. The order of the first appellate authority is contrary to these provisions which is apparently erroneous and prejudicial to the interest of the Revenue. The appellant is not entitled to claim set off on the TDS deducted in respect of main contractor regarding which VAT 156 is issued - appeal dismissed - decided against appellant. - S.T.A.No. 100013/2015 - - - Dated:- 12-12-2017 - MRS. S. SUJATHA AND DR. H. B. PRABHAKARA SASTRY JJ. Appellant: (By Sri. Narayan G. Rasalkar, Adv.) Respondents: (By Sri. M. Kumar, AGA For R1 to R4, Sri E.R. Indrakumar, Sr. Counsel For Sri E.I.Sanmathi, Adv., Sri H.R.Kambiyavar, Adv. For R5, R6 Notice Held Sufficient S. SUJATHA J. JUDGMENT This appeal is directed against the order passed by the Additional Commissioner of Commercial Taxes, Zone- III, Bengaluru, under Section 64 (1) of the Karnataka Value Added Tax Act, 2003 (for short the Act ). 2. The appellant is a private limited company engaged in civil construction work and is duly registered under the Act. M/s. Bharath Heavy Electricals Limited, Chennai, floated a tende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set off is to produce the proof of remittance of tax in respect of his work. It is the case of the appellant that the subcontractor has executed the work under contract between the contractee/employer and respondent No.5 /the main contractor. The RA bills were prepared by the appellant and transmitted by counter signature to respondent No.6/employer which was approved and VAT 156 was issued by deducting the tax of ₹ 1,20,35,4 78/- which has been duly deposited by the contractee/employer to the prescribed authority as per the provisions of sub Section (5) of Section 9-A of the Act. What is envisaged in sub Section (11) of Section 9-A of the Act is to discharge the burden of proof and the appellant has discharged the same by producing Form No.156 issued by the authorities. It was submitted that finding of the Addl. Commissioner of Commercial Taxes allowing TDS as per Form No.156 issued by respondent No.6 amounts to transfer of TDS from 5th respondent to the appellant which would be contrary to Rule 44 (3) (f) of the Rules is unjustifiable. According to the learned counsel, no TDS has been transferred or negotiated by the appellant. He has produced proof of tax remitted to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, transfer of property in goods takes place only once and that being so, the appellant is not entitled for the relief of set off of TDS as claimed. 6. Learned AGA appearing on behalf of Respondent No.1 to 4 supports the order impugned. 7. Heard the learned counsel appearing for the respective parties and perused the material on record. 8. It is not in dispute that the contractee/employer has entrusted the execution of the work in favour of the main contractor/respondent No.5 who in turn has entrusted certain work to the sub-contractor/assessee herein. It is true that on the basis of the RA bills pertaining to the assessee, main contractor was issued with TDS certificate in VAT 156. The employer/contractee has deducted TDS to the tune of ₹ 1,20,35,478/- relating to the main contractor and remitted to LVO 490 (assessing authority) whereas appellant-assessee has paid tax of ₹ 26,69 ,585/-. In the re-assessment proceedings, the claim of the appellant to set off the TDS being rejected, first appellate authority allowed the same observing that respondent No.5 was issued with VAT 156 from M/s.BHEL, Ballari, and the assessing authority shall set off tax on the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady remitted under the said sub-section. (11) The burden of proving that the tax on such works contract has already been remitted and of establishing the exact quantum of tax so remitted shall be on th e dealer claiming the reduction of tax under sub-sect ion (10). 10. Similarly, Rule 44 (3) (f) of the Rules is relevant which reads thus: 44 (3) (f) - Any authority or person deducting tax, having obtained Form VAT 156 or Form VAT 158 (or Form VAT 161) shall not either directly or through any other person transfer the same to another person. 11. It is incumbent and obligatory on the part of the contractee/employer who is a statutory body, to deduct out of the amounts payable by them, to a dealer, in respect of any works contract executed for them in the State, an amount equivalent to the tax payable by such dealer under the Act. In terms of sub Section (5), the authority making such deduction shall send every month to the prescribed authority, the particulars of tax deducted by way o f a statement in the prescribed Form within the prescribed period. As per sub Section (10) where tax is remit ted in respect of the works contract in terms of sub Section (5), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor. The main contractor deducting tax at source at 4% from the amounts payable to the assesse e for the works executed on its behalf is held to be unsustainable and contrary to the well established principles governing the taxability of the works contract receipts. It is held that the main contractor has wrongfully collected the tax and the same is liable for forfeiture under Section 47 (3) of the Act and directed the assessing authority to make correspondence with the concerned authority of the main contractor in order to ensure that wrong collection of tax by the main contractor shall be forfeited and after such proceedings are completed, it is left to the assessee to claim refund of such forfeited amount in terms of the Act and the corresponding Rules made thereunder. 15. This finding of the revisional authority has been acted upon by the assessing authority of the main contractor in passing the consequential order, forfeiting the tax amount collected from the appellant herein by the main con tractor. Prima facie, it appears such an order passed by the revisional authority directing the assessing authority of the main contractor to forfeit the wrongful collection of tax wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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