Saikh Abdul Motaleb, Member (J) - (1.) IN this application in the nature of writ of mandamus, filed under section 8 of the West Bengal Taxation Tribunal Act, 1987, the petitioner -company has challenged the order dated January 30, 2009 passed by the Deputy Commissioner of Sales Tax, Ballygunge Charge (respondent No. 1), refusing to refund forthwith the amount of Rs. 27,500 deducted as tax at source on the sale price of Rs. 15,14,423 of the goods supplied to the Bally Municipality and deposited in terms of form 18, Sl. No. 9/196 dated March 7, 2008 and for other consequential reliefs like payment of cost and interest and for directing the officer concerned to revoke/rescind/cancel and quash the order. The facts and circumstances leading to filing the writ are - -the petitioner -company of Chennai carries on business of sale of medical equipments from its branch office at Krishna Villa, 1st Floor, 100C, Park Street, Kolkata 700 017 and is a registered dealer under the West Bengal Value Added Tax (VAT) Act, 2003. On or about August 17, 2007, the petitioner -company, received one purchase order from the Chairman, Bally Municipality for supply of one TOSHIBA Digital Whole Body Colour Ultrasound Imaging System for a total price of Rs. 15,75,000 less buyback value of Rs. 2,00,000 and in compliance thereof one tax invoice bearing No. KOL/ SA/0021/2007 -08 dated September 29, 2007; was raised charging Rs. 15,14,423 as the sale price and Rs. 60,577 as sales tax payable. At the time of making payment of Rs. 13,75,000 the Bally Municipality deducted Rs. 27,500 being the four per cent tax at source and issued the certificate in form 18 under Sl. No. 9/196 dated March 9, 2008 under rule 47 of the VAT Rules, 2005 and stating therein that the deducted amount had deposited with the State Bank of India, Howrah branch, on January 10, 2008 under challan No. 8566/2. The petitioner -company thereafter filed an application before respondent No. 1 claiming refund of that amount of Rs. 27,500 deducted as tax at source. Respondent No. 1 kept himself silent on the matter for a long time and for that the petitioner -company filed writ application before this Tribunal, i.e., Case No. RN -630 of 2008 alleging inaction of respondent No. 1 in making refund of the said amount. By an order dated December 16, 2008, the Tribunal was pleased to dispose of the said application directing the concerned assessing authority to dispose of the pending application of the petitioner -company under sub -rule (2) of rule 81 of the West Bengal Value Added Tax (VAT) Rules, 2005 by January 31, 2009. The petitioner -company was thereafter called by respondent No. 1 and then all relevant documents, accounts and records related to the matter were produced before respondent No. 1 as required. On or about February 9, 2009, the petitioner -company received the memo No. 16545 dated January 30, 2009 passed by him declaring that the matter of refund of the sum of Rs. 27,500 deducted by Bally Municipality, should be considered in course of assessment proceedings under section 46(1) of the VAT Act for the period fourth quarters ending on March 31, 2008 and it is opined that the petitioner -company was not entitled to any refund under section 40(6) of the VAT Act read with rule 81(2) of the VAT Rules assigning some reasons and thereby treating the petitioner -company as a works contractor and hence this writ application.
(2.) NOW it is the contention in the application and submission of Mr. S. Dasgupta, learned advocate for the petitioner, that according to the provisions of rule 81(2) of the VAT Rules, respondent No. 1 was duty -bound to make the refund within a period of six months as the applicant was not liable to pay tax under section 14 of the VAT Act but that was not complied with. It is further contended and submitted that though there was a warranty clause in the quotation in question for supply of the system declaring that there could be free servicing and replacement of materials during the warranty period for one year the petitioner -company was not liable to pay tax on such replaced articles/goods under section 14 of the VAT Act because such services and/or replacement of goods were not required to be done under any terms of the works contract. Admitting that the petitioner -company subsequently submitted an application for amending its registration certificate for inclusion of works contract in declaring its nature of business but as per definition clause of "works contract" under section 2(57) of the VAT Act the supply of the ultrasound imaging system machine to the Bally Municipality cannot be treated as made under works contract as there was no case of construction, fitting out, improvement or repair of any building or other immovable property and/or installation or repair of any machinery affixed to a building or other immovable property and/or for overhaul or repair of any motor vehicle, sea going vessel, other vessels propelled by internal combustion or by any other mechanical means, any component or accessory part of the goods mentioned in items I -IV, or the fitting of, assembling, lettering or ornamenting, finishing, furnishing, improving, processing, photocopying, developing, treating, attaching or printing of any goods was there. It is submitted by Mr. Dasgupta that the sale of the system by the petitioner -company to Bally Municipality was not in execution of any works contract being the work not included in any of the aforesaid categories of works contract as per the definition of the VAT Act as aforesaid and hence there was no question of assessment before refunding the tax amount deducted at source by the municipality and deposited at the Government exchequer through bank. It is also contended in the application and submitted by Mr. Dasgupta that simply because the petitioner -company filed application for amending of its registration certificate for its inclusion as works contractor, the petitioner -company cannot be made liable to pay tax on its sales of goods without considering the nature of business it performed/made with the Bally Municipality. Mr. Dasgupta, therefore, prays for the direction upon respondent No. 1 to revoke/rescind/cancel the order dated January 30, 2009 and to refund forthwith the sum of Rs. 27,500 deducted as tax at source. The respondents are contesting this application by filing affidavit -in -opposition and thereby denying the allegations made against the respondents and contending, inter alia, that the aforesaid work order placed by the Chairman, Bally Municipality, in reply to the quotation of the petitioner -company and other documents mentioning therein the whole work consisted in three parts, i.e., first part - -buyback of Siemens Adora with mechanical probe in working condition, second part - -supply of the system and the third part - -after sale service and hence those indicate that the sale was done in execution of works contract as defined under section 2(57) of the VAT Act and it was not a mere sale of a machine. It is further contended there and submitted by Mr. B. Majumdar, learned State Representative, that mere submission of the petitioner -company that the sale, made with the Bally Municipality, was a mere sale of goods under the Sale of Goods Act, 1930 is not based on any solid ground and is inappropriate to the merit of the case. It is also contended and submitted for the respondents that supply of the system in question was happened after receiving the work order placed by the Chairman, Bally Municipality, with some expatiate condition laid down by the municipality without raising any objection by the petitioner -company and accordingly after sale service was rendered by the petitioner to the municipality and, therefore, the sale was clearly a part and parcel of the whole works contracted and hence the petitioner -company was liable to pay tax under section 18 of the VAT Act, 2003 and in view of that the impugned order dated January 30, 2009 is neither arbitrary nor illegal or a misconceived one and, therefore, not liable to be set aside as is prayed. It is submitted by Mr. Majumdar that in compliance with the order passed by this Tribunal in Case No. 630 of 2008, the assessing authority communicated the application to the Chairman to ascertain the nature of the transaction and thereafter considered the application for refund and it was found not merely a simple sale under the Sale of Goods Act, 1930 but a sale under works contract and has finally disposed of the application as per provision of law and hence it deserves to be confirmed by dismissing the application of the petitioner -company with cost. The respondents have annexed some documents in support of their contention taken in the affidavit -in -opposition.
(3.) WE have perused the documents annexed by the petitioner -company with the application and by the respondents with the affidavit -in -opposition. We have considered the rival submissions made for both the sides with reference to the contents of the documents filed. There is no dispute and/or it is the admitted fact and also established by document on record that the Chairman of the Bally Municipality invited tender for supply of TOSHIBA Digital Whole Body Colour Doppler Ultrasound Imaging System and the petitioner -company bid for that and submitted quotation to supply the goods one set with accessories at Rs. 15,75,000 less buyback value of the Siemens Adora with mechanical probe in working condition for Rs. 2,00,000 and net amount payable at Rs. 13,75,000 and that was accepted by the municipality and accordingly placed the purchase order to the petitioner -company under purchase order No. 1175/X -4 dated August 16, 2007. There is also no dispute and it is also established by documents that at the point of supply of the machine and making payment of the price, the Bally Municipality deducted the sum of Rs. 27,500 as tax at source. There is also no dispute and it is also established by document, i.e., the tax invoice that VAT at four per cent amounting to Rs. 60,577 was charged from the Bally Municipality on the sale value of the goods supplied and there is no dispute that the said amount has been deposited by the petitioner -company in the Government exchequer. There is also no dispute that the tax of Rs. 27,500 deducted at source by the Bally Municipality under section 40(2) of the Act was also deposited in the Government exchequer through bank. Now the question comes for consideration is whether the transaction as aforesaid can be treated as one under the works contract as per the provision of section 2, sub -section (57) of the Act or not.;