- (1.) LEAVE granted. National Highway Authority of India granted a contract in favour of the respondent nos. 2 and 3, viz. , M/s. Madhucon Projects Ltd. and m/s. Madhucon Binapuri JV. The said respondents granted a sub-contract in favour of the appellant. The works contract involved in the agreement entered into by and between the respondent nos. 2 and 3 on the one hand and the appellant before us on the other, is exigible to sales tax in terms of the provisions of A. P. General Sales Tax Act, 1957 (for short 'the Act' ). Section 5f of the said Act provides for a non-obstante clause in terms whereof every dealer is to pay tax under the said Act for each year, on its turnover of transfer of property in goods whether as goods or in some other form, involved in the execution of works contract, at the rate specified therein. The fourth proviso appended tereto reads as under: "provided also that no tax shall be payable under this Section on the turnover relating to the amounts aid to a sub-contractor as consideration for the execution of works contract whether wholly or partly subject to the production of proof that such sub-contractor is a registered dealer liable to tax under the Act and that the turnover of such amount is included in the return of turnover filed by such sub-contractor". In terms of the said provision of law, the appellant before us only was to be considered as the 'dealer' within the meaning of the provisions of the said Act. It is thus an assessee under the said Act.
(2.) THE grievance of the appellant is that although tax had been deducted at source from his running bills by the respondent nos. 2 and 3 purported to be in terms of section 5-H of the said Act, but they did not fulfill their statutory obligation in remitting the amount so deducted in terms of sub-section (2) of Section 5-H thereof. Appellant in the assessment proceedings, inter alia, raised a specific contention that the tax deducted at source from its running bills by the respondent nos. 2 and 3 had not been remitted to the concerned authority. The assessing officer, however, held a purported meeting between the representatives of the appellant and respondent nos. 2 and 3 and arrived at a conclusion that the bills, showing deduction at source, submitted by the appellant are not correct. An appeal was preferred thereagainst. The appellate authority did not agree with the said finding of the assessing officer and remitted the matter back to it By reason of an order of assessment dated 22nd may 2006, the assessing officer held as under: "the assessment record for the year 2002-03 has also verified and found that the C. T. O. , Ashoknagar has recorded in his assessment order for the year 2002-03 stating that the 'assessee has submitted a signed statement of T. D. S. deduction made by M/s. Madhucon Binapuri J. V. , and m/s. Madhucon Projects Ltd. , for the year 2002-03 as detailed below: JUDGEMENT_756_DT(SC)1_2007Html1.htm
(3.) BUT on verification of the bills passed by M/s. Madhucon projects Ltd. , and M/s. Madhucon binapuri J. V. , in favour of M/s. Sri harsha Constructions they have made deductions on the value of the contract during the year 2002-03 as shown below. Despite the said finding, however, the appellant herein was directed to deposit the amount of tax assessed stating, "the claim against the TDS credit for an amount of Rs. 4300004/- is examined and found untenable and not in accordance to the provision of the APGST Act '57. The TDS certificate amounting to rs. 3515577/- issued in favour of the contractor M/s. Madhucon Projects ltd. , and M/s. Madhucon Binapuri j. V. cannot be given credit to their account as per the provision of the apgst Act'57. In view of above circumstances the contentions raised by them is rejected and confirmed the turnover proposed in the show cause notice issued for the year 2002-03". ;