Works contract tax liability remitted for fresh determination under the applicable VAT or GST regime

The writ petition concerned whether tax liability on a works contract fell under the VAT regime or the GST regime, depending on when the taxable event occurred and the effect of the relevant GST circular on payment and tax deduction at source. The High Court did not decide the substantive rate of tax payable; instead, it required the tax authority to examine the contract, execution, payment records and supporting documents and then determine the applicable regime and rate in the first instance. The matter was remitted to the Commissioner of Taxes, Assam for fresh determination, with liberty to the petitioner to pursue further remedy if aggrieved.

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Issues: Whether the petitioner's tax liability in respect of the works contract was to be determined under the value added tax regime or the goods and services tax regime, and whether the matter required remand for fresh determination.

Analysis: The liability was not finally adjudicated on merits. The dispute turned on the point of time when the taxable event occurred and the effect of the relevant GST circular governing payment of tax and deduction at source for works contractors. The proper course was for the tax authority to examine the contract, execution, payment, and supporting documents and then determine the applicable tax regime and rate in accordance with the circular.

Conclusion: The tax liability was left to be determined by the Commissioner of Taxes, Assam, and the writ petition was remitted for that purpose.

Final Conclusion: The order does not decide the substantive rate of tax payable by the petitioner and instead directs administrative determination in the first instance, leaving the petitioner free to seek further remedy if still aggrieved.

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