Works Contracts – Composition Scheme

2014-VIL-293-AP
M/s MARK INFRASTRUCTURE PVT LTD Vs THE COMMERCIAL TAX OFFICER
Works Contract – Composition scheme – Assessment order assessing the petitioner to tax under section 4(7)(b) or (c) of the act, and not under section 4(7)(d) or (a) thereof, illegal and void ab-initio – HELD – Clause (8) of the agreement stipulates that the contract value is inclusive of all taxes; and any liability, on account of Sales Tax, VAT etc., shall be to the account of the petitioner. Having accepted liability to pay VAT, the petitioner cannot now turn around and contend that the liability to pay VAT is on contractee, and they are not liable to pay tax under the Act. No material has been placed on record to show that contractee had collected tax at 1.25% from independent purchasers, and had remitted the same to the State exchequer. On the other hand tax at 1.25% was deducted from the petitioners bills by SRMT and paid to the department. The petitioner has not even chosen to array contractee as a respondent in the Writ Petition. It is clear that SRMT is the contractee, and the petitioner is the contractor and not the sub-contractor – The petitioners contention that, even if they are not entitled for exemption under Section 4(7)(d) and its proviso, they are liable to be subject to tax under Section 4(7)(a) of the Act, and not under Section 4(7)(b)&(c) of the Act, is also not tenable. Having submitted an application for composition in Form VAT 250, the petitioner cannot now be heard to contend that they should have been assessed to tax under Section 4(7)(a) of the Act, as Section 4(7)(a) of the Act is applicable only to a dealer who has not exercised the option of composition under Section 4(7)(b) to (d) of the Act – Writ petition – Abuse of process of court – Not only has the petitioner suppressed relevant and material facts, but has also sought to mislead this Court misrepresenting facts. We see no reason, therefore, to exercise discretion, under Article 226 of the Constitution of India, to interfere – Both on merits and for abuse of process of Court, the Writ Petition is liable to be, and is accordingly, dismissed – Assessee petition dismissed with exemplary cost.