Works contract tax deduction certificates must be verified first before recovery where source tax is alleged to have been deducted.

Section 7-F of the Tamil Nadu General Sales Tax Act places the primary duty to deduct, deposit and certify tax at source on the person paying for works contract execution. Adjustment of the dealer's liability depends on production of the prescribed deduction certificate, while the dealer must prove that tax was already deposited. Where the deductor allegedly deducted tax but did not issue the certificate, the proper course is to verify the deductor's records first and apply recovery only if tax was not deducted or deposited; on that footing, the attachment order and B6 notice were quashed.

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Issues: Whether the attachment order and B6 notice could be sustained when the principal contractor allegedly deducted tax at source in respect of works contract payments but failed to furnish the prescribed deduction certificate, and whether the burden under section 7-F of the Tamil Nadu General Sales Tax Act, 1959 justified recovery from the petitioner.

Analysis: Section 7-F places the primary duty to deduct, deposit, and certify tax at source on the person paying for execution of the works contract. Adjustment of the dealer's tax liability under sub-section (4) is contemplated on production of the prescribed deduction certificate, while the proviso casts on the dealer the burden of proving that tax has already been deposited. The record showed repeated requests by the petitioner for the deduction certificate and materials indicating deduction of tax, but the certificate was not issued. The order also recognised that the Act did not expressly provide for the situation where the deductor fails to furnish the certificate despite alleged deduction and deposit. In that setting, the proper course was to verify the second respondent's records first and then apply the recovery provisions only if tax had not been deducted or deposited.

Conclusion: The attachment order and B6 notice were quashed, and the petitioner obtained relief, with the authority directed to verify the deductor's records and grant deduction if tax had in fact been deducted.

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