TaxTMI 
TaxTMI 
2012 (3) TMI 383
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.... of law relating to the legality of deduction of tax at source out of the payments to be made to the petitioner-dealers for the works executed by them. In W.P. (C) No. 519 of 2012, the petitioner is a dealer registered under the provisions of the Assam Value Added Tax Act, 2003 (in short, "the Act") and is executing works at the instance of railway authorities (respondent Nos. 7 to 10) including the work of construction of diversion between station Gogamukh and Dhemaji. The work includes earthwork in excavation, embankment and cutting, mechanical compaction, reinforced cement concrete, supply and placing of boulders hand packed of approved quantity, casting and supplying of pre-stressed concrete slabs/pre-cast RCC ballast retainer, suppl....
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....new Brahmaputra bridge at Guwahati at the instance of respondent No. 4, the national highway authority. The said work involves huge amount of labour and services apart from use of goods. In accordance with the provisions of the Act and the Rules, the petitioner applied in form 30 to get benefit of lower deduction in accordance with section 47(1)(b)(i) read with rule 28(2)(a) and such a certificate dated December 10, 2008 in form 31 was duly issued to the petitioner, according to which, the probable tax liability of the petitioner was equal to 2.42 per cent of the contract value. Accordingly, the petitioner sought for deduction of tax at source at that rate. However, vide notice dated July 6, 2009 lower deduction certificate dated December 1....
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....provision and deduction of tax equal to the tentative liability was permissible. The petitioner could be given hearing on the issue of cancellation of certificate earlier granted. We have heard learned counsel for the parties. There is no dispute between the parties on the legal issue that the competence of the State Legislature, even in respect of a machinery provision, was limited to allow deduction of tax as per tentative tax liability and deduction of tax at source could not be provided for de hors tax liability. Reference, in this regard, may be made to the judgments of the honourable Supreme Court in Bhawani Cotton Mills Ltd. v. State of Punjab [1967] 20 STC 290 (SC), Steel Authority of India Ltd. v. State of Orissa [2000] 118 S....
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....r of the assessee under the Act, the authority deducting the tax cannot act mechanically and has to make tentative determination of the tax liability as per law. Since no higher authority to oversee such determination is envisaged under the Act, and determination of tentative tax liability remains operative till final assessment is made, it is necessary that time gap between the final assessment and tentative assessment is minimum, so that in case where huge amount is deducted, which may not be found due, the assessee does not suffer unnecessary loss. Some difference in the perception of the authority deducting the tax and that of the assessing authority under the Act is not ruled out but the grievance in this regard can be redressed to a g....