TDS set-off under VAT law is available only to the dealer named in the certificate, not a subcontractor.

A subcontractor cannot claim set-off of TDS reflected in Form VAT 156 when the certificate was issued in the name of the main contractor. Section 9-A of the Karnataka Value Added Tax Act permits reduction of tax only to the dealer who can prove remittance of the deducted amount, and Rule 44(3)(f) bars transfer of Form VAT 156 to another person. On this reading, the first appellate order allowing the subcontractor's set-off was erroneous and prejudicial to the Revenue, so revision under Section 64(1) was justified and the reassessment was restored.

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Issues: Whether a subcontractor is entitled to claim set-off of tax deducted at source reflected in Form VAT 156 issued in the name of the main contractor, and whether the revisional authority was justified in interfering with the first appellate order allowing such set-off.

Analysis: Section 9-A of the Karnataka Value Added Tax Act, 2003 provides for deduction of tax at source in works contracts, payment of the deducted tax to the prescribed authority, reduction of tax payable to the extent of tax remitted under sub-section (5), and places the burden of proving remittance on the dealer claiming the reduction. Rule 44(3)(f) of the Karnataka Value Added Tax Rules, 2005 prohibits transfer of Form VAT 156 or similar forms to another person. On a conjoint reading of these provisions, the set-off is available only to the dealer in whose favour the TDS certificate is issued. Since Form VAT 156 was issued to the main contractor and not to the subcontractor, the subcontractor could not claim the benefit of that deduction. The first appellate order allowing such set-off was therefore erroneous and prejudicial to the Revenue, justifying revision under Section 64(1) of the Act.

Conclusion: The subcontractor is not entitled to set off the TDS deducted in respect of the main contractor, and the revisional order restoring the reassessment was upheld.

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