TaxTMI 
TaxTMI 
2015 (4) TMI 784
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....14). Mr. Rajesh Goyal, Advocate for Mr. Pritam Saini, Advocate for the petitioner (in CWP No. 8093 of 2014). Mr. Amar Pratap Singh, Advocate and Mr. Amrinder Singh, Advocate for the petitioner (s) (in CWP Nos. 9314, 9364, 9370, 9456, 11072, 110911 and 13684 of 2014). Mr. Sanjay Singh, Advocate for Mr. Karanvir Singh Khehar, Advocate for the petitioner (in CWP No. 11696 of 2014). Mr. Vikram Jeet Singh, Advocate for Mr. Aman Pal, Advocate for the petitioner (in CWP No. 12170 of 2014). For the Respondent : Ms. Tanisha Peshawaria, DAG, Haryana with Mr. M.K. Dutta, Advocate for State of Haryana. JUDGMENT Ajay Kumar Mittal, J. 1. This order shall dispose of a bunch of 65 petitions bearing CWP Nos. 5730, 5731, 5746, 5751, 5753, 5754, 5755, 6043, 6044, 6050, 6051, 6119, 6132, 6135, 6142, 6143, 6148, 6149, 6165, 6199, 6224, 6250, 6363, 6845, 7138, 7440, 7441, 7575, 7614, 7720, 7832, 7833, 7834, 7908, 8093, 8338, 8339, 9314, 9342, 9364, 9370, 9456, 9748, 10027, 10029, 10030, 10342, 10404, 10405, 10408, 10409, 10411, 10412, 10413, 10422, 11072, 11091, 11696, 12107, 12387, 12429, 12667, 13684, 18075 of 2014 and 5120 of 2015 as according to learned counsel for the parties, the issues involv....
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....on builders and developers. Subsequently, vide circular dated 10.2.2014, the circular dated 7.5.2013 was varied and value of the land was sought to be included for imposition of VAT. Notices (Annexure P-3 Colly) for re-assessment for the year 2010-11 under Section 17 of the Act were issued for imposing tax on the transaction of sale of flats, floors and villas amounting to Rs. 42,98,90,718/- as being under assessed. The petitioner filed reply (Annexure P-4) to the said notices. However, no response was received in this regard. The developer being engaged in the sale of immovable property where stamp duty was paid and also there being no mechanism provided under the Act for computation of tax, the imposition of tax insisted by the authorities was unconstitutional and beyond the provisions of the Act and Rules. Hence, the present writ petitions. Upon notice, respondents No.2 and 3 contested the writ petitions by filing written statement. It was pleaded therein that the issue regarding applicability and levy of VAT on builders and developers engaged in the activities of construction of building, flat and commercial properties and selling the same to the prospective buyers which the pe....
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.... No. 16751 of 2011 [reported as (2013) 57 VST 453] relegated the petitioner therein to the appellate authority to challenge the assessment order before it. The respondents knowing well that sale of land was not taxable under the Act being immovable goods, issued notice only for computing the tax liability on sale of goods liable to tax involved in the execution of the works contract under the Act and no notice proposing levy of tax on value of land has been issued by them. According to the respondents, the circulars dated 7.5.2013 (Annexure P-2), dated 4.6.2013 and dated 10.2.2014 were issued by respondent No.2 which related to works contractors and developers/ builders so as to remove some confusion amongst the departmental officers in determining the gross turnover and deductions allowable therefrom and consideration which was liable to tax. The said circulars in no way interfere with the quasi judicial functions of the Assessing Officers. It was further pleaded that there is transfer of property in goods in the said execution of the contract and the transfer is for a consideration to be paid in stages. Such transfer of property in goods was covered under clause (zt) of subsectio....
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....n goods, property in which gets transferred after entering into agreement with the buyer. It was further contended that when the definition of 'works contract' was to be read with the definition of 'sale price', it was clear that the assessment had to be framed keeping in view pure and simple works contractors and not developers. Even no tax can be charged on the developer in respect of materials transferred directly by the subcontractor as Section 42 of the Act provides for levy of tax on the developer only in cases where property had been transferred by the subcontractor who fails to discharge his liability. Further, Section 42 of the Act stipulates joint and several liability of the contractor and subcontractor involved in the execution of the works contract. Section 42(2) of the Act provides that in case the main contractor proves to the satisfaction of the assessing authority that the tax has been paid by the sub-contractor and the assessment of such tax has become final, then he shall not be liable to pay tax on the sale of such goods. According to the learned counsel, taxing the contractor and sub-contractor for the same sale amounted to double tax and there ....
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....o tax land component in the case of developers/builders. It was argued that the other provisions of the Act and the Rules, the validity of which have been challenged by the petitioners, were in conformity with law. 7. We have heard learned counsel for the parties. 8. Noticing the contentions of learned counsel for the parties, the following primary issues emerge for our consideration:- (i) Whether the developers and builders are works contractors and the agreement between the developer/builder/promoter and the prospective purchaser to construct a flat and thereafter sell the same with some portion of land, authorises the State to impose VAT thereon? (ii) If the answer to the first issue is in the affirmative, whether the method of valuation of VAT on such agreements, can directly or indirectly, include the value of land by following the method of calculation of the taxable turnover in the manner expressed by the Commissioner vide circulars dated 7.5.2013, 4.6.2013 and 10.2.2014 and also in terms of Explanation (i) to Section 2(1)(zg) of the Act and Rule 25(2) of the Rules? (iii) Whether the provisions of Section 42 of the Act and also Section 9 of the Act read with Rule 49 of ....
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...., construction, building, altering, manufacturing, processing, fabrication, installation, fitting out, improvement, repair or commissioning of any movable or immovable property. "Goods" have been described under Section 2(1)(r) of the Act as under:- "(r) "goods" means every kind of movable property, tangible or intangible, other than newspapers, actionable claims, money, stocks and shares or securities but includes growing crops, grass, trees and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale." The definition of "gross turnover" falls under Section 2(1)(u) of the Act in the following terms:- "(u) "gross turnover" when used in relation to any dealer means the aggregate of the sale prices received or receivable in respect of any goods sold, whether as principal, agent or in any other capacity, by such dealer and includes the value of goods exported out of State or disposed of otherwise than by sale; Explanation. - (i) The aggregate of prices of goods in respect of transactions of forward contracts, in which goods are actually not delivered, shall not be included in the gross turnover. (ii) Any amount recei....
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.... out of the territory of India; (e) turnover of export of goods out of State; (f) turnover of disposal of goods otherwise than by sale; (g) turnover of sale of exempted goods in the State; (h) turnover of sale of goods to such foreign diplomatic missions/consulates and their diplomats, and agencies and organisations of the United Nations and their diplomats as may be prescribed; and (i) turnover of sale of goods returned to him, subject to such restrictions and conditions as may be prescribed, and to the remainder shall be added the purchases taxable under subsection (3) of section 3, if any, Note. - 1. In this sub-section "turnover" means. - (i) for the purpose of clauses (a), (b), (c), (d), (g) and (h), the aggregate of the sale prices of goods which is part of the gross turnover; (ii) for the purpose of clauses (e) and (f), the aggregate of value of goods exported out of State or disposed of otherwise than by sale, as the case may be, which is part of the gross turnover; and (iii) for the purpose of clause (i), the aggregate of the sale prices of goods which is or has been part of gross turnover (including under the Act of 1973). Note. - 2. If the turnover in respect o....
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.... reads thus:- "42. Joint and several liability of certain class of dealers. -(1) Where a works contractor appoints a sub-contractor, who executes the work contract, whether in whole or in part, the contractor and the subcontractor shall both be jointly and severally liable to pay tax in respect of transfer of property in goods whether as goods or in some other form involved in the execution of the works contract by the subcontractor. (2) If the contractor proves to the satisfaction of the assessing authority that the tax has been paid by the sub-contractor on the sale of the goods involved in the execution of the works contract by the subcontractor and the assessment of such tax has become final, the contractor shall not be liable to pay tax on the sale of such goods but he shall be entitled to claim input tax, if any, in respect of them if the same has not been availed of by the sub-contractor. (3) Where an agent purchases or sells any goods on behalf of a principal, such agent and the principal shall both be jointly and severally liable to pay tax in respect of the purchase or sale of goods by the agent. (4) If the principal on whose behalf the agent has purchased or sold the....
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.... State, pay in lieu of tax payable by him under the Act on the transfer of property (whether as goods or in some other form) involved in the execution of the contract, a lump sum calculated at four per cent of the total valuable consideration receivable for the execution of the contract, by making an application to the appropriate assessing authority within thirty days of the award of the contract to him, containing the following particulars: (1) Name of the applicant contractor: (2) TIN: (Append application for registration, if not registered or not applied for registration) (3) Name of the contractee: (4) Date of award of the contract; (5) Place of execution of the contract: (6) Total cost of the contract: (7) Period of execution: and appending therewith a copy of the contract or such part thereof as relates to total cost and payments. (2) The application shall be signed by a person authorised to make an application for registration. On receipt of the application, the assessing authority shall, after satisfying itself him that the contents of the application are correct, allow the same. (3) The lump sum contractor shall be liable to make payment of lump sum quarterly ca....
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....) A lump sum contractor may, when rate of lump sum is revised, opt out of the scheme of payment of lump sum in lieu of tax payable under the Act by appearing before the appropriate assessing authority himself or through an authorised agent within ninety days of such revision and expressing in writing his intention to opt out of the scheme of payment of lump sum. Such contractor shall be liable to pay lump sum for the period before the revision in lump sum rate at the un-revised rate and in respect of transfer of property in any goods, whether as goods or in some other form, involved in the execution of the contract(s) thereafter he shall be liable to pay tax as a contractor not being a lump sum contractor." 18. In order to appreciate rival submissions, legislative history of the taxability of 'works contract' needs to be noticed. 19. The power to levy sales tax was conferred on the legislatures of States by Entry 54 of List II of the Seventh Schedule to the Constitution of India. The entry as originally enacted, read thus:- "54. Taxes on the sale or purchase of goods other than newspapers." 20. After the judgment of the Apex Court in Bengal Immunity Co. Ltd. v. State of....
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.... Supreme Court had noted in subsequent decisions that the said decision though was rendered on the basis of the provisions in the Government of India Act, 1935 was equally applicable to the provisions found in Entry 54 of List II of Schedule VII of the Constitution. By virtue of this decision, no sales tax could be levied on the amounts received under a works contract by a building contractor even though he had supplied goods for the construction of the buildings. 22. In the year 1982 Parliament passed the 46th Amendment amending the Constitution in several respects in order to bring many of the transactions, in which property in goods passed but were not considered as sales for the purpose of levy of sales tax, within the scope of the power of the States to levy sales tax. By the 46th Amendment a new clause, namely clause (29A) was introduced in Article 366 of the Constitution. Clause (29A) of Article 366 of the Constitution reads thus: "366, Definitions.--In this Constitution, unless the context otherwise requires, the following expressions have the meaning hereby respectively assigned to them, that is to say- (29-A) 'tax on the sale or purchase of goods' includes-- (....
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.... the Constitution as including all materials, commodities and articles. Sub-clause (b) of clause (29-A) states that 'tax on the sale or purchase of goods' includes among other things a tax on the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract. The emphasis is on the transfer of property in goods (whether as goods or in some other form). While referring to the transfer, delivery or supply of any goods that takes place as per sub-clauses (a) to (f) of clause (29-A), the latter part of clause (29-A) stipulates that 'such' transfer, delivery or supply of any goods' shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made. Hence, a transfer of property in goods' under sub clause (b) of clause (29-A) is deemed to be a sale of the goods involved in the execution of a works contract by the person making the transfer and a purchase of those goods by the person to whom such transfer is made. The introduction of new definition in clause (29-A) of Article 366 of th....
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....nth Schedule to the Constitution enabling the States to levy tax on sales and purchases independent of Entry 54 thereof. As the Constitution exists today the power of the States to levy taxes on sales and purchases of goods including the "deemed" sales and purchases of goods under clause (29A) of Article 366 is to be found only in Entry 54 and not outside it. We may recapitulate here the observations of the Constitution Bench in the case of Bengal Immunity Company Ltd. (supra) in which this Court has held that the operative provisions of the several parts of Article 286 which imposes restrictions on the levy of sales tax by the States are intended to deal with different topics and one could not be projected or read into another and each one of them has to be obeyed while any sale or purchase is taxed under Entry 54 of the State List. 41. We, therefore, declare that sales tax laws passed by the Legislatures of States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and conditions mentioned in each clause or sub-clause of Article 286 of the Constitution. We, howev....
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....be made. On behalf of the States, it has been urged that it would be permissible for the State to prescribe a formula on the basis of a fixed percentage of the value of the contract as expenses towards labour and services and the same may be deducted from the value of the works contract and that the said formula need not be uniform for all works contracts and may depend on the nature of the works contract. We find merit in this submission. In cases where the contractor does not maintain proper accounts or the accounts maintained by him are not found worthy of credence it would, in our view, be permissible for the State legislation to prescribe a formula for determining the charges for labour and services by fixing a particular percentage of the value of the works contract and to allow deduction of the amount thus determined from the value of the works contract for the purpose of determining the value of the goods involved in the execution of the works contract. It must, however, be ensured that the amount deductible under the formula that is prescribed for deduction towards charges for labour and services does not differ appreciably from the expenses for labour and services that wo....
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.... in the execution of a works contract at a uniform rate which may be different from the rates applicable to individual goods because the goods which are involved in the execution of the works contract when incorporated in the works can be classified into a separate category for the purpose of imposing the tax and a uniform rate may be prescribed for sale of such goods. 51. The aforesaid discussion leads to the following conclusions:- (1) In exercise of its legislative power to impose tax on sale or purchase of goods under Entry 54 of the State List read with Article 366 (29-A)(b), the State Legislature, while imposing a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract is not competent to impose a tax on such a transfer (deemed sale) which constitutes a sale in the course of inter-State trade or commerce or a sale outside the State or a sale in the course of import or export. (2) The provisions of Sections 3, 4 and 5 and Sections 14 and 15 of the Central Sales Tax Act, 1956 are applicable to a transfer of property in goods involved in the execution of a works contract covered by Article 366(29-A)(b). ....
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....entage of the value of the works contract but while doing so it has to be ensured that the amount deductible under such formula does not differ appreciably from the expenses for labour and services that would be incurred in normal circumstances in respect of that particular type of works contract. It would be permissible for the legislature to prescribe varying scales for deduction on account of cost of labour and services for various types of works contract. (8) While fixing the rate of tax it is permissible to fix a uniform rate of tax for the various goods involved in the execution of a works contract which rate may be different from the rates of tax fixed in respect of sales or purchase of those goods as a separate article." 27. On another occasion, where the developers were undertaking to build for the prospective purchasers on payment of the price in various installments set out in the agreement for such construction/development, the issue of taxability under VAT was considered by a two Judge Bench of the Apex Court in K. Raheja Development Corporation v. State of Karnataka (2005) 5 SCC 162, wherein it was held as under:- "19. To consider whether the Appellants are executi....
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....a lump sum agreed and quantified consideration of Rs. 3,25,000/- (Rupees three lacs twenty five thousand only) to be paid by the Prospective Purchaser to the Holders at the time and in the manner stated in Clause 2 hereof; b) K. Raheja Development Corporation, (as Developers) agree to build the said building named `Raheja Towers', having the specifications and amenities therein set out in the Second Schedule hereunder written and as Developers for the prospective Purchaser, the Developers shall build for and as unit/s to belong to the Prospective Purchaser, the said premises (details whereof are set out in the Third Schedule hereunder written) for a lump sum agreed and quantified consideration of Rs. 5,07,000/- (Rupees five lacs seven thousand only) to be paid by the Prospective Purchaser to the Developers at the time and in the manner set out in Clause 3 hereof. The said premises shall have the amenities set out in the Fourth Schedule hereunder written. XX XX XX 5. The undermentioned terms and provisions are express conditions to be observed, performed and fulfilled by the Prospective Purchaser, on the basis of which this Agreement has been entered into by the Holders/Devel....
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....t from them." 20. Thus the Appellants are undertaking to build as developers for the prospective purchaser. Such construction/development is to be on payment of a price in various installments set out in the Agreement. As the Appellants are not the owners they claim a "lien" on the property. Of course, under clause 7 they have right to terminate the Agreement and to dispose off the unit if a breach is committed by the purchaser. However, merely having such a clause does not mean that the agreement ceases to be a works contract within the meaning of the term in the said Act. All that this means is that if there is a termination and that particular unit is not resold but retained by the Appellants, there would be no works contract to that extent. But so long as there is no termination the construction is for and on behalf of purchaser. Therefore, it remains a works contract within the meaning of the term as defined under the said Act. It must be clarified that if the agreement is entered into after the flat or unit is already constructed, then there would be no works contract. But so long as the agreement is entered into before the construction is complete it would be a works contra....
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....o transfer the property in goods and rather it is rendering of service or the ultimate transaction is transfer of immovable property, then also it is open to the States to levy sales tax on the materials used in such contract if such contract otherwise has elements of works contract. The enforceability test is also not determinative. (vii) A transfer of property in goods under clause 29- A(b) of Article 366 is deemed to be a sale of the goods involved in the execution of a works contract by the person making the transfer and the purchase of those goods by the person to whom such transfer is made. (viii) Even in a single and indivisible works contract, by virtue of the legal fiction introduced by Article 366 (29-A)(b), there is a deemed sale of goods which are involved in the execution of the works contract. Such a deemed sale has all the incidents of the sale of goods involved in the execution of a works contract where the contract is divisible into one for the sale of goods and the other for supply of labour and services. In other words, the single and indivisible contract, now by Forty-sixth Amendment has been brought on par with a contract containing two separate agreeme....
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....perty in those goods must be transferred to a third party either as goods or in some other form. These conditions are fulfilled in a building contract or any contract to do construction. In a contract to build a flat, necessarily there will be an element of sale of goods included therein and therefore, building contracts are species of the works contract. Still further, a contract comprising of both a works contract and a transfer of immovable property, such contract is not denuded of its character of being a works contract. Article 366 (29A)(b) of the Constitution of India does contemplate a situation where the goods may not be transferred in the form of goods but may be transferred in some other form which may even be in the form of immovable property. No doubt, there is no legislative competence in the State legislature to levy tax on the transfer of immovable property under Entry 54 of List II of the Seventh Schedule. However, the States are empowered to levy sales tax on the sale of goods in an agreement of sale of flat which also has a component of a deemed sale of goods. 31. Once it is concluded that the developer/builder/promoter are covered under the works contract while....
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....oods transferred after the agreement is entered into with the flat purchaser can only be made chargeable to tax by the State Government. Taxing the sale of goods element in a works contract under Article 366 (29A)(b) read with Entry 54 List II of Schedule VII of the Constitution of India is permissible even after incorporation of goods provided tax is directed to the value of the goods at the time of incorporation and does not purport to tax the transfer of immovable property. No tax can be charged from the developer/builder/promoter or contractor in respect of the value of goods incorporated in the works contract after the agreement with the flat purchaser on which the subcontractor has already paid the tax. 32. Next, it was claimed by learned counsel for the petitioners that the State of Uttar Pradesh has framed rule 9 of UPVAT Rules, 2005 and Delhi State under Rule 3 of Delhi VAT Rules, 2005 have introduced specific provisions for charging VAT on transaction of the developers etc. whereas there is no such provision in the rules. The developer who does not carry on construction activities itself but creates sub contractors for that work, would not be liable for any tax under the....
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....2) issued by respondent No.2 provides that the agreements/contracts entered by developers with prospective buyers for sale of apartments/ flats before the completion of construction constitutes 'works contract' and thus VAT was imposable on such transactions. Clause 4 of the said circular relates to measure of tax and deduction towards labour and other like charges. Circular dated 4.6.2013 was issued regarding making of assessments on builders and developers. In view of legal position enunciated hereinbefore, there is no illegality in the issuance of circulars dated 7.5.2013 and 4.6.2013. However, Circular issued on 10.2.2014 relates to lump sum tax under composition tax scheme and has been dealt with while analyzing the provisions of Section 9 of the Act and Rule 49 of the Rules. 35. Examining the validity of Explanation (i) to Section 2(1)(zg) of the Act and Rule 25(2) of the Rules, it would be essential to notice that in order to avoid declaration of unconstitutionality, the Courts have adopted such principles of interpretation which would result in sustaining the statute. The Constitution Bench of the apex Court in the State of Madhya and others v. M/s Chhotabhai Jetha....
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....ut of what may be. Under any other rule a constitution would indeed be as easy of application as it would be. Under any other rule a constitution would indeed be as easy of application as it would be deficient in efficacy and power. Its general principles would have little value, and be converted by precedent into impotent and lifeless formulae. Rights declared in the words might be lost in reality. And this has been recognised. The meaning and vitality of the Constitution have developed against narrow and restrictive construction." 37. The rule of interpretation requires that such meaning should be assigned to the provision which would make the provision of the Act effective and advance the purpose of the Act. This should be done wherever possible without doing any violence to the language of the provision. A statute has to be read in such a manner so as to do justice to the parties. Moreover, the Apex Court in B. R. Enterprises v. State of U.P., (1999) 9 SCC 700, Calcutta Gujarathi Education Society v. Calcutta Municipal Corporation (2003) 10 SCC 533 and M.Nagraj v. Union of India (2006) 8 SCC 212 has interpreted the rule of reading down statutory provisions to mean that a statu....
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...., are entitled to all deductions admissible as per Law/Rules. 4. That as per the provisions contained in the Haryana VAT Act, 2003 and the rules framed thereunder, the tax is to be levied on transfer of property in goods involved in the execution of works contract. It is clarified that the definition of the word 'goods', as available in Section 2(1) (r) of the Haryana Value Added Tax Act, 2003, does not include immovable property, that is, land. 5. That the Act ibid, which is relatable to entry 54, List II Seventh Schedule of the Indian Constitution does provide for levy of tax on sale or purchase of goods except newspaper. 6. That having regard to above, neither any tax is leviable nor can it be levied on price of land involved in execution of works contract. 7. That the respondents, being law abiding officers, cannot violate the above constitutional mandate. NON-VAT DEALER (WORKS CONTRACTORS): 8. That there is, however, some difference as regards levy vis-a-vis non-VAT dealer i.e. works contractor operating under composition/lump sum scheme provided under section 9 of the Act and rule 49 of the Rules made thereunder. It is submitted that such works contractors, who ....
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....ng to the deduction pertain to the said works contract:-- (a) labour and service charges for the execution of the works; (b) amounts paid by way of price for sub-contract , if any, to subcontractors; (c) charges for planning, designing and architect's fees; (d) charges for obtaining on hire or otherwise, machinery and tools for the execution of the works contract; (e) cost of consumables such as water, electricity, fuel used in the execution of works contract, the property in which is not transferred in the course of execution of the works contract; (f) cost of establishment of the contractor to the extent to which it is relatable to supply of the said labour and services; (g) other similar expenses relatable to the said supply of labour and services, where the labour and services are subsequent to the said transfer of property; (h) profit earned by the contractor to the extent it is relatable to the supply of said labour and services: Provided that where the contractor has not maintained accounts which enable a proper evaluation of the different deductions as above or where the Commissioner finds that the accounts maintained by the contractor are not sufficiently clear or ....
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....volved in the execution of the construction contract is also transferred, then it is such transfer of goods alone which is liable to tax. The value of the goods at the time of transfer is to be calculated after making the deduction of the cost of the land from the total agreement value. The method for determining the cost of the land has also been specified thereunder. It stipulates that the cost of the land shall be determined in accordance with the guidelines appended to the Annual Statement of Rates prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995 on Ist January of the year in which the agreement to sell the property is registered. The rule provides for measure of determination of the tax. It does not create any liability to tax as a charging provision. The Supreme Court in Larsen & Toburo's case (supra) specifically read down Rule 58 which were computational provision whereby exclusion of value of land on the basis of circle rates and ceiling on such deduction had been provided. The Apex Court noticed as follows:- "The value of the goods which can constitute the measure of the levy of the tax has to be the value....
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....ry changes in the Rules in consonance with the above observations. 46. Adverting to the issue of challenge to Section 42 of the Act is concerned, according to the learned counsel for the petitioners the assessing VAT liability on the developer when the goods have been transferred by the sub-contractor was in clear contravention of States 's power vide Entry 54 List II of Seventh Schedule. Therefore, the provision wherein the tax was to be assessed in the hands of the developers even where the property was transferred by the sub-contractor was clearly untenable in law and was liable to be quashed. 47. Under sub-section (1) of Section 42 of the Act, where the works contractor gets the construction work executed through a subcontractor, whether in whole or in part, it shall be the joint and several liability of the contractor and the sub-contractor. Sub-section (2) of Section 42 thereof clarifies that a contractor shall not be under any liability to pay tax in respect of a "works contract", if the same has been paid by a sub-contractor and that his assessment has become final. This provision only safeguards the interest of the revenue in the event of failure on the part of the s....
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....rnative remedy in the matter relating to exercise of writ jurisdiction as under:- "From the various judicial precedents, enumerated above, this Court is of the considered opinion that availability of an alternative remedy for nonentertainment of a petition under Article 226 of the Constitution cannot be of universal application. It is true that ordinarily when the statute provides an alternative remedy, and particularly when there is complete machinery for adjudicating the rights of the parties, which by and large depend upon the facts, the High Court should refrain from entertaining and adjudicating upon the rights of the parties, but to this principle, there are certain exceptions and a citizen, who can successfully cover this case in either of the exceptions, cannot be shown the exit door of his entry to the High Court and be compelled to go before the authorities concerned. Some of the exceptions under which a petition may lie under Article 226 of the Constitution before the High Court without availing of an alternative remedy are when the very provisions of the statute are challenged as being ultra vires of the Constitution or repugnant to the Act itself. Obviously, the autho....