Writ relief against tax deduction in works contracts is premature before assessment; factual entitlement must be decided by the assessing authority.

Writ relief to deduction of tax at source from running bills was treated as premature where no assessment order had yet been made and the grievance was only apprehended. The Rajasthan Sales Tax Act, 1954 and Rules, as amended, were read as providing a workable scheme for levy and deduction of tax in works contracts, including determination of taxable turnover and prescribed rates. Questions about whether the contract was mainly for service, the extent of material used, or entitlement to exclusion or certificate against deduction were held to be matters for the assessing authority, not for decision in writ jurisdiction.

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Issues: (i) Whether a direction could be issued in writ jurisdiction to prevent deduction of tax at source at 3% from running bills when assessment had not yet been made and the grievance was only apprehended; (ii) whether the statutory scheme under the Rajasthan Sales Tax Act, 1954 and the Rajasthan Sales Tax Rules, 1955, as amended, provided authority for levy and deduction of tax in works contracts; (iii) whether the plea that no tax could be levied because the petitioner allegedly used little or no material in execution of the works contract could be adjudicated in writ proceedings.

Issue (i): Whether a direction could be issued in writ jurisdiction to prevent deduction of tax at source at 3% from running bills when assessment had not yet been made and the grievance was only apprehended.

Analysis: The petition sought a preventive direction against levy at a particular rate, but no completed assessment was shown. The challenge was therefore based on an apprehension that tax might be levied at 3% later. In the absence of an assessment order, the dispute had not matured into a justiciable demand for interference. Any illegal action, if taken later, could be challenged in appropriate proceedings.

Conclusion: The prayer was premature and no writ direction against levy at 3% was warranted.

Issue (ii): Whether the statutory scheme under the Rajasthan Sales Tax Act, 1954 and the Rajasthan Sales Tax Rules, 1955, as amended, provided authority for levy and deduction of tax in works contracts.

Analysis: The amended provisions, including the retrospective amendment to section 5(3), were treated as operative since their validity was not directly challenged. The Court read section 2(t), section 2(s), section 5(1), rule 29(2)(i), and the amended rule 46 together and held that the Act and Rules contained a workable scheme for determining turnover, excluding amounts not liable to tax, and levying tax on taxable turnover at the prescribed rate. The contention that the statutory framework was insufficient was rejected.

Conclusion: The statutory provisions validly supported levy and deduction of tax in works contracts, and the challenge failed.

Issue (iii): Whether the plea that no tax could be levied because the petitioner allegedly used little or no material in execution of the works contract could be adjudicated in writ proceedings.

Analysis: The Court held that questions such as whether the contract was a service contract, whether only a limited percentage of material was used, and whether the assessee was entitled to a certificate against deduction were matters for the assessing authority. The petitioner had not approached the statutory authority for appropriate relief, and such factual determinations were not suitable for adjudication under article 226.

Conclusion: The plea was not entertained in writ jurisdiction and could be pursued, if available, before the assessing authority.

Final Conclusion: The writ petition failed on all substantive grounds, as the challenge was premature, the statutory levy scheme was upheld, and the factual questions required adjudication before the appropriate taxing authority.

Ratio Decidendi: A preventive writ against tax deduction in a works contract will not lie before assessment, and the statutory levy scheme must be applied according to the amended Act and Rules; factual entitlement to exclusion or exemption must be worked out before the assessing authority.

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