2024-VIL-179-MAD
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VAT High Court Cases

Tamil Nadu Value Added Tax Act, 2006 - Section 13(1) – Non-deduction of TDS – Validity of initiation of proceedings against the petitioner-Works Contractor for alleged non deduction of TDS by the awarder of the contract - issue of Notices to the petitioner as no certificate was issued to the petitioner in Form S to claim exemption under proviso to Sub Clause (c) to Section 13(1) of the TNVAT Act, 2006 – HELD - In this case, payments have been made by CMRL to the petitioner without corresponding Tax Deducted at Source. Such action may warrant proceeding against CMRL under Section 13(8) of the TNVAT Act, 2006 - Irrespective of the fact whether the tax was to be paid under Section 5 or 6 of the TNVAT Act, 2006, at compounded rate, CMRL was required to deduct tax at the rates specified in Section 13(1) of the TNVAT Act, 2006 - Whether the petitioner was liable to pay tax under Section 5 or 6 of the TNVAT Act, 2006 is not clearly forthcoming from the documents. It is quite possible that the petitioner had opted to pay tax under Section 5 of the TNVAT Act, 2006 and therefore had obtained Form S Certificate of no tax liability under proviso to Section 13(1) of the TNVAT Act, 2006 read with TNVAT Rules, 2007 but had failed to pay the tax. This would require a fresh determination - if CMRL had failed to deduct the amounts under Section 13(1) of the TNVAT Act, 2006, machinery under Section 13(8) of the Act, is to be directed only against CMRL. Therefore, to that extent the impugned Notices are without jurisdiction. The 2% demand proposed in the Impugned Notices is to be directed only against CMRL and not on the petitioner - the proposed demand in the Impugned Notices are quashed with liberty to Department to complete the assessment if the petitioner was liable to pay tax under Sections 5 and Section 6 of the TNVAT Act, 2006 - writ petitions stands allowed
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