The Commissioner, Trade Tax vs J.K. Sugar

Rajes Kumar, J.—Present revision u/s 11 of U.P. Trade Tax Act (hereinafter referred to as the ''Act'') is directed against the order of the Tribunal dated 31.05.1999 relating to the assessment year 1995-96, by which, the Tribunal has deleted the penalty levied u/s 8-D(6) of the Act.

The brief facts of the case are that during the year under consideration vide agreement dated 01.11.1994, Dealer/Opposite Party (hereinafter referred to as the "Dealer") had purchased one Began Fired Boiler from M/S Bal Chandra Nagar Industries, Pune and also entered into a contract on 27.4.1995 with Sri O.P. Singh, Contractor for erection of the said Began Fired Boiler, Pune. The Assessing Authority was of the view that the supply as well as erection of the Began Fired Boiler by M/S Bal Chandra Nagar Industries, Pune and its erection by Sri O.P. Singh, Contractor was a works contract, therefore, while making the payment to the aforesaid two parties, dealer should have deducted the tax u/s 8-D(1) of the Act. Dealer submitted that it had purchased Begun Fired Boiler from M/S Bal Chandra Nagar Industries, Pune against From- C and the contract was for supply and not for the works contract. It was also Submitted that the second agreement with Sri O.P. Singh, Contractor dated 27.4.1995 was also for erection which was in the nature of labour work, in which, there was no involvement of the material, therefore, there was no liability of dealer to deduct the tax u/s 8-D(1) of the Act. The Assessing Authority, however, had not accepted the plea of the dealer and levied the penalty u/s 8-D(6) of the Act. The First Appellate Authority remanded back the matter to the Assessing Authority. Being aggrieved by the order of the First Appellate Authority, the dealer filed appeal before the Tribunal. The Tribunal by the impugned order accepted the appeal of the dealer. The Tribunal held that both the agreements were not in the nature of works contract and the first agreement dated 1.11.1994 with M/S Bal Chandra Nagar Industries, Pune was for supply of Began Fired Boiler, Pune against Form-C and the second contract dated 27.4.1995 with Sri O.P. Singh, Contractor was for the labour contract.

Heard Counsel for the parties and perused the order of the Tribunal and the authorities below.

Finding of the of the Tribunal is the finding of fact. Learned Standing Counsel is not able to show anything to the contrary.

Section 8-D(1) reads as follows:

8-D- Tax deduction from the amount payable to works contractor-

Notwithstanding anything contained in Sub-section (2) of Section 8-A, every person responsible for making payment to any dealer (hereinafter in this section referred to as the contractor) for discharge of any liability on account of valuable consideration payable for the transfer of property in goods (whether as goods or in any other form) in pursuance of a works contract, not being a building contract of such class or value as may be notified by the State Government in public interest in this behalf, shall at the time of making such payment to the contractor, either in cash or in any other manner, deduct an amount equal to four per centum of such sum towards part or, as the case may be, full satisfaction of the tax payable under this Act on account of such works contract;

(Provided that the (Commissioner) may, if satisfied that it is expedient in the public interest so to do and for reasons to be recorded in writing order that in any case of class of cases no such deduction shall be made or, as the case may be, such deduction shall be made at a lesser rate.)

(Provided further that where any deduction has been made by a contractor from the payments made to his sub contractor in accordance with Sub-section (2) the amount of such payments shall be deducted from the amount on which deduction is to be made under this Sub-section.)

Section 8-D(1) provides the deduction by the person responsible for Making payment to any dealer for discharge of any liability on account of valuable consideration payable for the transfer of property in goods in pursuance of works contract, therefore, the provisions of Section 8-D(1) is applicable only in a case of works contract and not in a case of supply simplicitor or labour work and in the present case, the Tribunal held that the first contract was for supply of Began Fired Boiler and the second contract was for the erection in the nature of labour contract and was not the works contract, Therefore, the dealer had no obligation to deduct the tax u/s 8-D(1) of the Act. The view of the Tribunal is correct and is, accordingly, up held.

In the result, revision fails and is, accordingly, dismissed.