2016-VIL-335-AP
M/s GVPR ENGINEERS LIMITED Vs THE STATE OF TELANGANA
Telangana Value Added Tax Act – Works Contract – Composite Contract – Sale price – deduction of tax at source – disallowance of receivables as deduction – liability of the petitioner to pay VAT only when payment is made by the contractee on the running account bills – change in the procedure of assessment – bifurcation of the turnover, into supply and work contracts portions – Refund – forfeiting the tax collected at source without notice – Interpretation of G.O.Ms.No.11 dated 29.07.2005
- HELD – The G.O. issued by the Government in the exercise of the powers conferred by Section 76(2) of the Act, all that the instructions issued in G.O.Ms.No.11 provide is for tax to be collected at source at 4% as and when the bills are paid. The words “for implementation of VAT”, in clause (5) of G.O.Ms.No.11, cannot be read out of context to mean that a dealer is required to pay VAT only when payment, for the running account bills, are received by him
- Rules, made under the Act, must be read as part and parcel of the Act under which it is made – it is impermissible to interpret G.O.Ms. No.11 that under the guise of exercising power to remove difficulties, the Government intended, by issuing G.O.Ms.No.11, to nullify the statutory prescription of Section 22 of the Act read with Rule 24 of the Rules – On a conjoint reading of Section 22 of the Act and Rule 24 of the Rules, the tax declared in the return for a particular month is required to be paid, and proof of payment filed along with the return before the 20th of the succeeding month, and the obligation to pay VAT cannot be postponed to the indefinite date of receipt of sale consideration
- The assessing authority was, therefore, justified in subjecting the petitioner to tax under the Act on the value of the goods when they were incorporated in the works, and in rejecting their claim that VAT was payable only when sale consideration was received – Consequent upon the bifurcation of the State, any tax paid by the petitioner to the Government of Andhra Pradesh cannot be adjusted against the tax due to the Government of Telangana pursuant to an order of assessment passed under the Telangana Value Added Tax Act. Any grievance, which the petitioner may have, regarding payment of tax to the Government of Andhra Pradesh, can only be agitated in appropriate legal proceedings instituted against them, and it is not open to the petitioner to seek adjustment of the tax so paid to the Government of A.P. with the taxes due to be paid to the Government of Telangana pursuant to the assessment order passed under the Act