Tax deducted at source under works contracts is a separate statutory duty and can be enforced apart from assessment proceedings.

A writ petition over deductions from running bills in a works contract was treated as unsuitable for writ jurisdiction because the dispute turned on construction of the subcontract, disputed facts, and a private law controversy between contracting parties; the petition was therefore not maintainable on the facts. The sales tax obligation to remit tax deducted at source was treated as a distinct statutory duty, separate from assessment of turnover tax, and could be enforced independently of the assessment proceedings. The matter was to be examined on the basis of the account books and supporting material, with coercive recovery under the assessment order kept in abeyance pending fresh scrutiny.

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Issues: (i) whether a writ petition arising out of a dispute over deductions from running bills under a works contract was maintainable when the controversy was essentially between private contracting parties; (ii) whether the statutory obligation to remit tax deducted at source under the sales tax law could be enforced separately from the assessment proceedings.

Issue (i): whether a writ petition arising out of a dispute over deductions from running bills under a works contract was maintainable when the controversy was essentially between private contracting parties.

Analysis: The controversy depended on construction of the subcontract and on disputed factual questions concerning the deductions made from the running bills. The dispute was essentially between the contractor and the subcontractors, and therefore bore a private law character. In such a setting, the writ court would ordinarily decline to entertain the petition, especially when an efficacious alternative remedy was available.

Conclusion: The writ petition was not maintainable on the facts as presented before the High Court.

Issue (ii): whether the statutory obligation to remit tax deducted at source under the sales tax law could be enforced separately from the assessment proceedings.

Analysis: The Act treated the contractor and sub-contractor arrangement as giving rise to a distinct statutory obligation. The deduction of tax at source from running bills created a separate liability to remit the deducted amount, and this obligation was not the same as the assessment of turnover tax. The State and the assessing authority were not powerless to enforce that statutory duty merely because the assessment process was proceeding separately. The matter therefore required examination by the commercial tax authority on the basis of the account books and supporting material produced by the parties.

Conclusion: The statutory duty to remit tax deducted at source could be enforced independently, and the matter had to be examined by the Commissioner of Commercial Taxes or his nominee.

Final Conclusion: The appeal succeeded to the extent that the matter was sent for fresh examination by the commercial tax authority and coercive recovery under the assessment order was kept in abeyance until such decision was taken.

Ratio Decidendi: Liability to remit tax deducted at source is a separate statutory obligation from assessment, and the revenue authorities may enforce that obligation notwithstanding the existence of disputes arising out of a private contract.

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