Statutory tax remedies govern works-contract disputes, while recovery from the awarder depends on failure to deduct tax.

Where a works-contract tax dispute is governed by a statutory assessment and certification scheme, the assessee must first approach the Sales Tax Officer for the rule 22A(3) certificate and for determination of the correct tax liability, with ordinary appellate remedies thereafter. Section 7(10) does not apply to recover tax from the awarder when tax is in fact being deducted from the contractor's bills; the contractor remains liable to file returns and obtain credit for tax deducted and remitted on its behalf. The assessee may also seek clarification under section 59A on whether concessional rate benefits under the notification extend to supplies made to B.S.N.L. on production of the relevant declaration.

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Issues: (i) Whether the petitioner should be directed to work out its grievances before the statutory sales tax authority for a certificate under rule 22A(3) and for determination of the correct tax liability; (ii) whether section 7(10) applies so as to require recovery of tax from the awarder when tax is in fact being deducted from the contractor's bills; (iii) whether the petitioner can seek clarification under section 59A regarding availability of concessional rate benefits.

Issue (i): Whether the petitioner should be directed to work out its grievances before the statutory sales tax authority for a certificate under rule 22A(3) and for determination of the correct tax liability.

Analysis: The dispute concerned tax deduction, concessional rate, and the mode of payment in respect of works contracts. The appropriate statutory forum was the Sales Tax Officer who could examine whether the petitioner was in tax remittance and whether a certificate could be issued to permit payment without deduction or at a lower rate. The assessment authority was also the proper authority to determine the petitioner's liability in the first instance, with appellate remedy available if the assessment was adverse.

Conclusion: The petitioner was required to approach the Sales Tax Officer for the appropriate certificate and for assessment of tax liability.

Issue (ii): Whether section 7(10) applies so as to require recovery of tax from the awarder when tax is in fact being deducted from the contractor's bills.

Analysis: The provision invoked for recovery from the awarder operates only where the awarder fails to deduct tax. Since deduction was being made from the contractor's bills, that mechanism was not attracted. The contractor remained liable to file returns and obtain credit for tax deducted and remitted on its behalf, and the existence of the recovery provision did not absolve the contractor of liability under the Act.

Conclusion: Section 7(10) was held inapplicable on the facts, and assessment was to proceed in the name of the petitioner.

Issue (iii): Whether the petitioner can seek clarification under section 59A regarding availability of concessional rate benefits.

Analysis: The Court indicated that the petitioner could invoke the Commissioner's clarification power on the question whether the benefit of the notification for supplies to the telecom department would extend to B.S.N.L. on production of the relevant declaration. This was treated as an available statutory course for resolving the dispute over the concessional rate.

Conclusion: The petitioner was permitted to seek clarification under section 59A.

Final Conclusion: The controversy was left to be resolved primarily through the statutory assessment, certification, appeal, and clarification mechanisms, with directions to the assessing authority and B.S.N.L. to act accordingly.

Ratio Decidendi: Where a tax dispute is governed by a statutory assessment and certification scheme, the High Court may require the assessee to first invoke the prescribed statutory remedies, and a recovery provision against the awarder applies only when the statutory precondition of failure to deduct tax is satisfied.

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