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TMI Blog2023 (2) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... y the State Government. The Act of 2008 is a fiscal act, intended to raise revenue for the State Government. The very purpose is met out, once the dealer to whom the payment has been made by the educational institution is subjected to assessment proceedings and tax liability is created and realized. Initiation of penalty proceedings under Section 8(D)(6) against a Government Institution has not helped the revenue, but such exercise has led to financial loss to the Government by unnecessary expenditure on litigation which, at any cost, should be avoided. Once, U.P. Rajkiya Nirman Nigam was assessed to tax and an assessment order was passed on 31.03.2010 and a tax liability was created towards the payment received by it from the univers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of the facts and circumstances of the case, levy of penalty of Rs.34,86,000/- under Section 8(d)(6) of the U.P. Trade Tax Act, is justified? 4. The brief facts involved in the present revision are that the revisionist is an educational institution imparting education. The primary and dominant function of the revisionist is to impart education to students, which is not a business activity. 5. According to the revisionist, it is neither a dealer or a contractor nor has appointed any contractor for execution of work contract. It is functioning under the control of the U.P. Government. Whenever, there is a requirement for any building to be used by students and teachers in the university campus, it is forwarded to the State G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him, Section 8(D)(1) and (6) has to be read in harmony and the maximum penalty which can be imposed is double the amount of deduction which is to be made from the amount paid to a contractor at the rate of 4 %. According to him, the authorities without recording any finding had imposed maximum amount of penalty on the revisionist who is not a dealer and is an educational institution. 9. He next contended that the officers of the university were not aware of the provisions of Section 8 (D)(6) and the tax has already been paid by the contractor while his assessment has been made. 10. Reliance has been placed upon decision of Co-ordinate Bench of this Court in case of Lala Lajpat Rai and Associated Hospital Vs. Commissioner of Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch exercise has led to financial loss to the Government by unnecessary expenditure on litigation which, at any cost, should be avoided. 15. The sole object of Section 8 (D) is tax deduction from amount payable to works contractor. Such tax deducted at source from the payment to contractor is treated as payment of tax on behalf of the contractor, so that he may not escape assessment to tax and the revenue is secured. Once, U.P. Rajkiya Nirman Nigam was assessed to tax and an assessment order was passed on 31.03.2010 and a tax liability was created towards the payment received by it from the university, the penalty proceedings initiated by the Taxing Authorities looses its sheen. 16. Moreover, the assessing authority while making a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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