Proof of sub-contractor tax payment upheld as a valid anti-double-taxation requirement; writ challenge declined in favour of appeal remedy.

Section 69(2) of the Assam Value Added Tax Act, 2003 and rule 39(1) of the Assam Value Added Tax Rules, 2005 were upheld because the requirement that a contractor produce documentary proof of tax payment by the sub-contractor, along with a declaration, was treated as a valid procedural safeguard to prevent double taxation on the same works-contract turnover. The absence of a prescribed declaration format did not invalidate the scheme, as relevant particulars could still be furnished. The reassessment challenge was not entertained in writ jurisdiction because the objections turned on factual and legal matters suited to the statutory appeal remedy, and article 226 interference was declined where an efficacious alternative remedy was available.

---

---

Issues: (i) Whether section 69(2) of the Assam Value Added Tax Act, 2003 and rule 39(1) of the Assam Value Added Tax Rules, 2005 were invalid for requiring the contractor to produce documentary evidence of tax payment by the sub-contractor along with a declaration; (ii) Whether the impugned reassessment order was liable to be interfered with in writ jurisdiction on the ground of arbitrariness, or the petitioner had to be relegated to the statutory appeal remedy.

Issue (i): Whether section 69(2) of the Assam Value Added Tax Act, 2003 and rule 39(1) of the Assam Value Added Tax Rules, 2005 were invalid for requiring the contractor to produce documentary evidence of tax payment by the sub-contractor along with a declaration.

Analysis: The provision treated the contractor as not liable to pay tax again where the contractor proves, in the prescribed manner, that tax has already been paid by the sub-contractor on the taxable turnover involved in the works contract. The corresponding rule only required documentary evidence of such payment together with a declaration from the sub-contractor. This was treated as a procedural requirement to prevent double taxation on the same turnover and as a workable condition for proving the exemption from levy. The absence of a prescribed format for the declaration did not make the provision invalid, since relevant particulars connecting the payment to the turnover could still be furnished. The authorities relied upon by the petitioner were held inapplicable.

Conclusion: The challenge to section 69(2) and rule 39(1) failed and the provisions were upheld.

Issue (ii): Whether the impugned reassessment order was liable to be interfered with in writ jurisdiction on the ground of arbitrariness, or the petitioner had to be relegated to the statutory appeal remedy.

Analysis: The grievance against the reassessment involved factual and legal questions regarding maintenance of accounts, production of vouchers, and the propriety of additions to declared turnover. Such objections were held to be matters that could be urged before the departmental appellate authority. In the presence of an efficacious statutory appeal, interference under article 226 was declined at that stage.

Conclusion: No writ interference was granted against the assessment order and the petitioner was left to pursue the statutory appeal remedy.

Final Conclusion: The writ petition failed in substance, the impugned tax provisions were not struck down, and the assessment challenge was not entertained in writ jurisdiction.

Ratio Decidendi: A machinery requirement demanding proof of prior tax payment by a sub-contractor, including supporting documentation and declaration, is valid where it operates to prevent double taxation, and writ relief will ordinarily be declined against an assessment when an efficacious statutory appeal is available to examine the disputed factual and legal contentions.

---