https://www.taxtmi.com/caselaws?id=158052 A State levy on works contracts was constitutionally limited by Article 286 and the rules governing State taxation of sales; it had to exclude inter-State, outside-State, import and export transactions and allow mandatory deductions for labour, service and other constitutionally required components. Because the charging provision and computation rule did not adequately provide those exclusions and deductions, they were declared invalid. Deduction at source was accepted as a permissible collection device in principle, but the sub-contractor withholding mechanism was struck down as arbitrary and prone to double deduction, double taxation, and penal consequences. The contractor-level deduction mechanism remained valid as an ancillary mode of collection. en-us Wed, 11 Jan 1995 00:00:00 +0530 Tue, 15 Oct 2013 16:42:36 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=158052 A State levy on works contracts was constitutionally limited by Article 286 and the rules governing State taxation of sales; it had to exclude inter-State, outside-State, import and export transactions and allow mandatory deductions for labour, service and other constitutionally required components. Because the charging provision and computation rule did not adequately provide those exclusions and deductions, they were declared invalid. Deduction at source was accepted as a permissible collection device in principle, but the sub-contractor withholding mechanism was struck down as arbitrary and prone to double deduction, double taxation, and penal consequences. The contractor-level deduction mechanism remained valid as an ancillary mode of collection. Case-Laws VAT and Sales Tax Wed, 11 Jan 1995 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=158052