Works contract deduction at source upheld as constitutional challenge to Haryana sales tax provisions failed

The constitutional validity and enforceability of section 25-B of the Haryana General Sales Tax Act, 1973, and the deduction mechanism under section 26(2) read with the notification for works contracts were upheld. The petitioners challenged the contractor deduction from running bills and argued that the provisions exceeded State legislative competence, but the Court found those objections meritless because identical challenges to the same provisions had already been rejected in an earlier decision. The writ petition was therefore dismissed and the statutory deduction scheme sustained.

---

---

Issues: Whether section 25-B of the Haryana General Sales Tax Act, 1973, and the deduction mechanism under section 26(2) read with the related notification were constitutionally valid and enforceable against works contractors.

Analysis: The writ petition challenged the authority of the contractee to deduct 2 per cent from running bills and contended that the statutory provisions were beyond the legislative competence of the State. The petitioners also relied on the nature of works contracts and the alternative scheme of payment under the Act. The Court noted that identical challenges to sections 25-B and 26(2), along with the notification issued thereunder, had already been rejected in an earlier decision, and found no merit in the renewed submissions.

Conclusion: The challenge to the validity and operation of section 25-B and the connected deduction scheme was rejected.

Final Conclusion: The writ petition failed and the statutory deduction mechanism under the Haryana General Sales Tax Act, 1973, was upheld.

Ratio Decidendi: A taxing provision regulating deduction at source in respect of works contracts will be sustained where an identical constitutional challenge has already been negatived and no fresh ground of merit is shown.

---