By TIOL News Service

JAMMU, APRIL 16, 2018: THE ISSUE IS - Whether the Revenue can deduct STDS for issuance of the refund merely because the assessee's application for refund submitted to the Deputy Commissioner is pending in nature. NO IS THE VERDICT.

Facts of the case:

The Assessee, an individual, a petty 'D' Class Contractor, had filed his return for the relevant AY. In the course of the assessment proceeding, the Revenue noted that the Assessee, being a registered contractor, was entitled to execute the works as per the classification under the registration of the Contractors Act. Further, the Revenue also noted that the Assessee had claimed that since he was covered within the definition of petty contractors, he was also entitled to get incentives from the government for the works executed by him. Again, the Assessee stated that there were few works of the government which were executed by him. The Assessee also submitted that the Revenue had deducted the sales tax at source (STDS) from the payments made to him in respect of several bills. Further, the Assessee claimed that being a petty 'D' class contractor, the Assessee was entitled to exemption from payment of sales tax and therefore, deductions from his bills were wrongly made by the Revenue. It was further submitted by the Assessee that despite of his repetitive requests and reminders to the Revenue, the amount of the sales tax were deducted wrongly and the same was not refunded to him.

The Assessee had earlier also approached to this Court which was disposed of by the Division Bench of this Court directing the Appellate Authority to consider the Assessee's appeal and decide the same within two months.

The High Court held that,

++ the Counsel appearing for the Assessee submitted that as a matter of fact no appeal was pending before the Appellate Authority and only an application for refund had been submitted to the Deputy Commissioner concerned and the order of the Division Bench was passed on wrong premise. Be that as it may, the Counsel for the Assessee submits that he has already made a representation to the Commissioner, Commercial Sales Tax, J&K for issuance of the refund on account of sales tax wrongly deducted TDS from him for the accounting years 2007-08 and 2009- 2010 and that he would feel satisfied, if this petition is disposed of by directing the Revenue to consider his representation and take an appropriate decision thereon in light of provision of SRO 256 of 1997. The representation is claimed to have been filed on 8.9.2010;

++ the interest of justice would be met, if dispose this writ petition is disposed of by directing the Commissioner, Commercial Tax, J&K to consider the representation stated to have been filed by the Assessee on 8.9.2010, if not already considered, and pass appropriate orders thereon with regard to the entitlement of the Assessee to the refund or otherwise in light of provision of SRO 256 of 1997, provided the same is applicable to the case of the Assessee.

(See 2018-TIOL-692-HC-J&K-CT)