Tax deduction at source under sales tax law must track prima facie taxable turnover, not the full transaction value.

Tax deducted at source under sales tax legislation must be confined to the prima facie taxable turnover of a transaction and cannot be imposed on the entire bill value without a tentative view of tax liability. The State may authorise limited deduction where service elements or VAT liability are in issue, but the dealer remains entitled to contest the actual taxable turnover in the statutory assessment process. The writ court therefore did not grant a blanket restraint against deduction and left the merits of the liability dispute to be decided in appropriate proceedings.

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Issues: Whether tax could be deducted at source from the petitioner's bills only with reference to the prima facie taxable turnover, and not from the entire transaction value, in a case involving alleged service elements and possible VAT liability.

Analysis: Deduction of tax at source under sales tax law is permissible only with reference to a prima facie taxable value of the transaction and cannot be de hors the dealer's tax liability. The State cannot authorise deduction from bills without first forming a tentative view of taxable turnover. In the present matter, the Court noted that the respondents did not propose deduction from the entire transaction value but only from such value as appeared to be tentatively taxable. Since the dispute about actual liability could be examined in appropriate proceedings, the writ petition was not taken further on merits.

Conclusion: Deduction at source, if any, was confined to the prima facie taxable turnover and not to the full bill value; the petitioner was not granted a blanket injunction against deduction.

Final Conclusion: The petition was disposed of by preserving the petitioner's right to contest taxable turnover in the statutory assessment process, while permitting only limited deduction based on prima facie tax liability.

Ratio Decidendi: Tax deducted at source under sales tax legislation must be linked to the prima facie taxable turnover and cannot be levied on the whole transaction value irrespective of actual tax liability.

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