Charging scheme governs sub-contractor tax liability; stay pre-deposit not modified absent proof of tax discharge by main contractor.

Tax liability arises under the charging scheme of the Finance Act and is not displaced by a later circular. The Tribunal rejected the claim that sub-contractors were outside the tax net for the relevant period and found that the circular did not support that proposition. It also held that the additional evidence did not establish, with clear proof, that the main contractor's tax payment covered the appellant's services, nor had that material been shown before the lower authorities. As no subsequent development justified interference, the stay direction requiring pre-deposit of the tax amount was not modified, while the additional evidence application was left for consideration at the appeal hearing.

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Issues: Whether the stay order directing pre-deposit of the entire tax amount should be modified on the basis of additional evidence and the plea that the main contractor had already discharged the tax liability, and whether the circular relied upon supported the claim that sub-contractors had no tax liability for the relevant period.

Analysis: The Tribunal held that tax liability is created by the charging scheme under the Finance Act and not by a later circular. It found no merit in the contention that sub-contractors were outside the tax net prior to the circular. The additional evidence was not shown to have been placed before the lower authorities or supported by clear proof that the tax paid by the main contractor included the value of the appellant's services. The request would effectively shift the burden of verification onto the Tribunal and the Revenue, which was not acceptable. No subsequent development justified interference with the earlier stay direction.

Conclusion: The request for modification of the stay order was rejected, while the application for additional evidence was left to be considered at the time of appeal hearing.

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