TaxTMI 
TaxTMI 
2010 (4) TMI 977
X X X X Extracts X X X X
X X X X Extracts X X X X
....un, Uttarakhand. The aforesaid appeal was, however, dismissed by the appellate authority on October 4, 2007. The order rendered by the appellate authority on October 4, 2007 was again assailed by the respondent before the Commercial Tax Tribunal, Uttarakhand. The Commercial Tax Tribunal, Uttarakhand by an order dated September 7, 2009 reduced the penalty inflicted upon the respondent from twice the amount of TDS required to be deposited, to an amount equivalent to TDS required to be deposited. The order dated September 7, 2009 rendered by the Commercial Tax Tribunal, Uttarakhand, has been assailed by the Commissioner of Commercial Tax, Uttarakhand before this court. We have heard the learned counsel for the revisionist. The learned counsel for the revisionist placed reliance on section 35 of the Act of 2005. Section 35 of the Act of 2005 is being extracted hereunder: "35. Recovery of tax by way of tax deduction at source-(1) Notwithstanding anything contained in sub-section (1) of section 22, every person responsible for making payment to any dealer (hereinafter in this section referred to as the contractor) for discharge of any liability on account of valuable consideration paya....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that where any deduction has been made by a contractor from the payment made to his sub-contractor in accordance with sub-section (3), the amount of such payment shall be deducted from the amount on which deduction is to be made under this sub-section. (3) Any contractor responsible for making any payment for discharge of any liability to any sub-contractor in pursuance of a contract with the sub-contractor for the transfer of property in goods (whether as goods or in any other form) involved in the execution of a works contract or for transfer of right to use any goods for any purpose, whether wholly or in part, of the work undertaken by the contractor, shall, at the time of such payment or discharge, in cash or by cheque or draft or by any other mode, deduct an amount equal to four percent of such payment or discharge, purporting to be a part of full amount of tax payable under this Act on such transfer from the bills or invoices raised by the sub-contractors as payable by the contractor: Provided that no deduction under this sub-section shall be made on the amount on which deduction has already been made under sub-section (1) or sub-section (2). (4) The amount deducted under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(9) shall be a charge upon all the assets of the person concerned. (11) Payment by way of deduction in accordance with sub-section (1) or sub-section (2) or sub-section (3) shall be without prejudice to any other mode of recovery of tax due under this Act from the contractor or the sub-contractor, as the case may be. Explanation.-For the purpose of this section, 'assessing authority' means the officer having jurisdiction over the place where the place of business or residence of the person is located. (12) Nothing contained in this section shall prevent the assessing authority from making an assessment of tax payable by the dealer in accordance with other provisions of the Act and notwithstanding anything contained in this section the dealer shall be liable to pay tax according to other relevant provisions of the Act." Based on sub-section (8) of section 35 of the Act of 2005, it is the submission of the learned counsel for the revisionist, that it was in the exercise of discretion vested in the assessing officer, that penalty was inflicted upon the respondent, which was equivalent to twice the amount of TDS liable to be deposited. The TDS, according to the learned coun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot executed through M/s. IVRCL Infrastructures & Projects Ltd., Srinagar, District Pauri Garhwal (Contractor). As per the provisions of section 35(1) of the State Act, the amount of deduction, made at source (TDS(VAT)) out of the payment made by the dealer to the contractor, has been deposited in the Department through the collection agency, i.e., bank, as per provisions of section 35(4). But the assessing officer, for the minor delay, occurred in the transfer of the amount from the bank to the account of the Department, has imposed very big amount in the form of penalty under section 35(8). Whereas, for the said delay there have been sufficient reasons, which are beyond the control of the dealer. On the date of payment, made by the dealer to the contractor, itself, bank drafts got prepared in the name and designation of the assessing officer, but due to the head office of the dealer being situated at Hyderabad (Andhra Pradesh) and his business being new for the State of Uttarakhand, the dealer was not aware of the fact that which branches of which banks are authorised for collection of tax. Drafts in favour of the Assistant Commissioner, Commercial Tax, Rishikesh got prepared by ....