Anurag Enterprises vs State of U.P. and Others

Om Prakash, J.—Whether Respondent No. 3 is entitled to deduct trade tax u/s 8D(1) of the U.P. Trade Tax Act (for short, ''the Act") from the running bill of the Petitioner who carried on the works of painting and colouring under a works contract dated 24.1.1995 is the question for consideration in this petition.

Briefly, Sub-section (1) of Section 8D of the Act states that every person responsible for making payment to any contractor for discharge of any liability on account of valuable consideration payable for transfer of property in goods in pursuance of works contract, shall at the time of making such payment to the contractor deduct an amount equal to four per centum of such sum towards part or full satisfaction of the tax payable under this Act on account of such works contract.

By notification No. ST-II-2399/X-9 (195)/85-U.P. Act-XV/48-Order-87. dated 27th April, 1987 fifteen types of works contracts have been specified. Type (6) of works contract as specified in the notification dated 27th April, 1987 is relevant for the purposes of this case and that is reproduced below:

(6) Civil works like construction of buildings, bridges, roads, dams, barrages, sewage, spillways and diversions.

Whereas the contention of the Petitioner is that the works of colouring and painting are not the works contract within the meaning of ''works contract'' of type (6) or of any other type as specified in notification dated 27.4.1987, the stand of the Respondent is that the contractual activity of the Petitioner falls within the works contract of Type No. (6) as specified in a notification dated 27.4.1987. The question for consideration is whether the contract of colouring and painting, admittedly carried out by the Petitioner, comes within the works contract of Type No. 6 as reproduced above. The definition of civil works at serial No. (6) of the notification is illustrative and that is apparent from the word "like" which precedes the words" construction of buildings, bridges, roads, dams, barrages, sewage, spillways and diversions". The submission of the standing counsel is that when contract of Type No. (6) gives illustrative definition of works contract, it will be legally permissible to include works of painting and colouring within the meaning of works contract of Type No. (6). No doubt, the definition of works contract of Type No. (6) is illustrative, but, in our opinion, that will not Include all types of civil works. Type (6) of works contract, in our view, refers to civil works, only of the nature which have been stated at serial No. (6) of the notification. This is clear from the principle of ejusdem generis which has to be applied to interpret the civil works as specified at serial No. (6) of a notification dated April 27, 1987. Applying the said principle, it must be held that only those works which are in the nature of the works as specified at serial No. (6) are civil works. The words "civil works" will take their colour and shade from the following words and that has to be given restricted meaning consistent to the illustrative words occurring at serial No. (6) of the notification. The word "like" is significant and that indicates that works of the type which are specifically mentioned at serial No. (6) only are the civil works and not beyond that. Cardinal principle of interpretation is that legislation does not use any word redundantly and if that is borne in mind, then the word "like" deserves appropriate meaning and that cannot be rendered as superfluous. Significance of the word "like", therefore, is that civil works only of the nature of the following illustrative works are the works contract at serial No. 6 and not the civil works which are inconsistent to the illustrative words. From the Illustrative words occurring in serial No. 6 of the notification, it is manifest that the element of ''construction'' is predominant and the works not involving that element cannot be said to be civil works in serial No. (6) of the notification.

We are, therefore, of the considered view that the contractual activity of the Petitioner is not covered by the civil works as defined in serial No. (6) of the notification and hence that does not come within the ambit of works contract within the meaning of Section 8D (1) of the Act. That being so, no deduction can be made from the bill of the Petitioner u/s 8D (1) of the Act.

It is not disputed that the Petitioner made an application to the Respondents that no deduction be made u/s 8D (1) from its bill and in alternative, it sought benefit of compounding scheme u/s 7D of the Act. Benefit of the scheme u/s 7D was denied to the Petitioner on the ground that the works carried out by the Petitioner are not civil works. The Respondents cannot blow hot and cold together. When the nature of the works undertaken by the Petitioner is not that of civil works for the purposes of Section 7D, how can it be said that the works carried out by the Petitioner are of the nature of civil works under clause (6) of the notification. Before us, counsel for the Petitioner clearly stated that benefit of scheme u/s 7D is not sought and, therefore, we do not go into that question. The Petitioner confines its case only to Section 8D of the Act.

On the premises, the petition succeeds and is allowed and Respondent No. 3 is directed not to deduct any amount from the running bill of the Petitioner relating to his works of colouring and painting under a works contract dated 24th January, 1995.