ASHWANI KUMAR MISHRA,J. - (1.) The revisionist, herein, is a works contractor, who is aggrieved by the order of the authorities under the Act, as affirmed by the order of the Tribunal, in so far as the payment made towards the labour charges have been disallowed deduction and only 30% deduction for the purpose has been permitted. The matter pertains to the assessment year 2010-2011. Reliance is placed upon Rule-9 of The Uttar Pradesh Value Added Tax Rules, 2008.
(2.) Sri Krishna Agrawal, learned counsel appearing for the assessee has invited attention of the Court to Rule-9 of the VAT Rules. Rule-9(1) (d) and 9(3) are relevant and thus reproduced:- "Rule 9. Determination of turnover of sale of goods involved in the execution of a works contract - (1) Subject to other provisions of these rules, the tax on turnover of sale of goods where such sale is affected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a work contract shall be computed on the taxable turnover of sale of taxable goods. For the purposes of determining the taxable turnover of sale of such goods, the amounts specified below shall be deducted if included in the gross amount received or receivable in respect of the works contract:- (2) all amounts representing the value of service and labour and profit thereon; (3) Where accounts maintained by the contractor do show separately the value of labour and services and amount of profit accrued on such labour and services, or accounts maintained by the dealer are worthy of credence or if the dealer has maintained accounts, for the purpose of determining turnover of goods in which transfer of property in goods has taken place, in cases other than those mentioned in the table below, an amount, representing twenty percent of gross amount received or receivable, shall be deducted towards labour and services and amount of profit accrued thereon and in the cases described or mentioned in column 2 of the table given below, amount of deduction towards such labour and services and amount of profit accrued thereon shall be computed at the rate percentages, given in column 3 against the entry in column 2 of the table, of the amount received or receivable".
(3.) Learned Counsel, with reference to Rule-9 (1)(d) contends that the amount representing the value of service and labour and profit is liable to be deducted if it is included in gross turnover while determining the taxable turnover of sale of such goods. It is contended that such benefit can be granted if it is shown separately, as has been done herein. Submission is that only in its absence or where necessary ingredients to attract sub Rule-(3) exists on record that benefit under rule 9(1)(d) can be denied. It is contended that there is no justification reflected in the orders of the authority, which may justify discrediting the figures disclosed in the Books of Account by the assessee so as to warrant having recourse to sub Rule (3) of Rule-9.;