Sub-contract turnover taxable without prescribed proof of tax payment by the sub-contractor, confirming assessment under sales tax rules.

A sub-contractor executing works under a contract was treated as falling within the expression "contractor" under section 2(9) of the Assam General Sales Tax Act. Deduction of sub-contract turnover under Rule 14(1)(c) of the Assam General Sales Tax Rules, 1993 was available only on production of the prescribed proof of tax payment by the sub-contractor. Because the petitioner executed the sub-contract work but failed to establish entitlement to exclusion of that turnover, the authorities correctly assessed the amount as taxable in the petitioner's hands. The assessment and appellate orders were therefore upheld.

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Issues: Whether a sub-contractor executing works under a contract was liable to pay tax on the turnover reflected in the assessment, and whether such turnover could be excluded from the taxable turnover only on production of proof of tax payment by the sub-contractor.

Analysis: Section 2(9) of the Assam General Sales Tax Act includes a sub-contractor within the expression "contractor". Rule 14(1)(c) of the Assam General Sales Tax Rules, 1993 permits deduction of turnover relating to sub-contract work only where the prescribed proof of tax payment by the sub-contractor is produced. On the facts, the petitioner had executed the sub-contract work and had not established entitlement to exclusion of that turnover under the rule. The authorities below therefore proceeded on the correct legal footing in treating the turnover as taxable in the petitioner's hands.

Conclusion: The petitioner was liable to pay tax on the disputed sub-contract turnover, and the assessment and appellate orders were upheld.

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