Judgment:
Prafulla C. Pant, J.
1. In all the above three revisions, following common questions of law are involved, as such the same are being disposed of together:
(i) Whether, the Commercial Tax Tribunal has erred in law in dismissing the second appeal, filed under Section 10 of the U.P. Trade Tax Act, 1948, on the ground that the Joint Commissioner, Commercial Tax, has no authority to sign the memorandum of appeal on behalf of Commissioner, Commercial Tax?, and whether an appeal filed only by the 'State' is maintainable on behalf of Revenue, against order of the Joint Commissioner (Appeals)?
(ii) Whether, the Commercial Tax Tribunal and the Joint Commissioner (Appeals), Commercial Tax, have erred in law in holding that the assessee, a works contractor, is not liable to pay the tax in respect of amount mentioned in the certificate of tax deduction at source, which was not verified nor the deducted amount paid in the account of the State Government?
2. Heard learned Counsel for the parties at length.
3. Brief facts, giving rise to these revisions, are that the assessee/respondent-M/s. J.K. Ghai, Moti Bazar, Dehradun, is a works contractor, who had done works in the assessment years 1999-2000, 2000-01 and 2001-02, in State of Uttarakhand, and contractee was Airport Authority of India. Under Section 8D of the U.P. Trade Tax Act, 1948 (applicable to State of Uttarakhand), a contractee, i.e., a person responsible for making payment to a dealer (assessee) is required to deduct amount equal to four per cent in full satisfaction of tax payable under the Act on account of such works contract. It appears that in respect of the tax deduction at source (for short hereinafter referred as 'T.D.S.'), certain certificates were issued for the assessment year 1999-2000 by the contractee, and the same were submitted by the contractor to the assessing officer (for short hereinafter referred as 'the A.O.'). The payment by contractee to the tune of Rs. 47,193 (out of Rs. 85,081) for that assessment year, could not be verified, as the contractee failed to show in which bank and under which head of State of Uttarakhand the amount shown to be deducted was deposited. Similarly, for the assessment year 2000-01, the T.D.S. in respect of amount of Rs. 19,368 (out of Rs. 82,522), found not verified as no such amount was deposited in the account of State of Uttarakhand. Also, in respect of assessment year 2001-02, in respect of the T.D.S. certificates, amounting Rs. 44,679, payment of Rs. 15,090 was found not to have been deposited in the account of the State Government. Originally, A.O. accepted the T.D.S. certificates as true and passed the, assessment orders, but after coming to know that the aforesaid amounts were not deposited in the account of the State Government, as required under Sub-section (5) of Section 8D of the U.P. Trade Tax Act, 1948, he issued separate notices under Section 22 of the U.P. Trade Tax Act, 1948, for each year, for rectification of mistakes, and after hearing the dealer (assessee/respondent), A.O. directed him to deposit the tax to the above extent. Aggrieved by said orders of the A.O., appeals were preferred by the dealer before first appellate authority, which were registered as Appeal No. 406 of 2006 (assessment year 1999-2000), Appeal No. 404 of 2006 (assessment year 2000-01) and Appeal No. 405 of 2006 (assessment year 2001-02). After hearing the parties, the Joint Commissioner (Appeal) II, Commercial Tax, Uttarakhand, Dehradun, vide his orders dated December 11, 2006, allowed the appeals and set aside the orders passed by the A.O., under Section 22 of the U.P. Trade Tax Act, 1948. On this, the Revenue filed Second Appeal No. 52 of 2007 (assessment year 1999-2000), Second Appeal No. 53 of 2007 (assessment year 2000-01), and Second Appeal No. 54 of 2007 (assessment year 2001-02), against the orders passed by the first appellate authority, before the Commercial Tax Tribunal, Dehradun. The Tribunal vide its impugned judgment and orders dated July 11, 2007, passed in aforesaid second appeals dismissed the same. Hence these revisions filed by the Revenue.
4. Answer to question of law No. 1: (Re: competence to maintain and sign the appeal)
This question relates to the maintainability of the second appeal filed by the Revenue before the Commercial Tax Tribunal, against the orders passed by the Joint Commissioner (Appeal) II. Sub-section (2) of Section 10 of the U.P. Trade Tax Act, 1948 (applicable to State of Uttarakhand), provides that any person aggrieved by an order passed under Section 9 other than the orders referred in said Sub-section may within a period of ninety days from the date of service of copy of order/decision, prefer an appeal to the Tribunal. An Explanation has been added to Sub-section (2) of Section 10 of the Act, whereby it is clarified that for the purposes of the sub-section, expression 'any person' in relation to any order passed by an authority other than the Commissioner includes the Commissioner and, in relation to any order passed by the Commissioner includes State Government. The learned Counsel for the respondent drew attention of this court to Clause (b) of Section 2 of the Act and pointed out that the word 'Commissioner' means Commissioner of Trade Tax appointed by the State Government, and includes Additional Commissioners or Joint Commissioners of Trade Tax appointed by the State Government. On the basis of it, it is argued that the Commissioner had no authority to file the appeal, and only the State Government could have filed the second appeal before the Tribunal against the order of the Joint Commissioner. Having gone through the relevant provisions of the Act, we do not find substance in the argument advanced on behalf of the respondent that against the order passed by the Joint Commissioner (Appeals), Commissioner was not authorized to file the second appeal before the Tribunal. Rather the Explanation to Sub-section (2) to Section 10 of the Act, which defines 'any person' aggrieved who can file appeal, clearly provides that the Commissioner would be such person for the purposes of orders passed by any authority. It is only as against the order of Commissioner that the State Government could be aggrieved person apart from the assessee. Apart from this, Sub-rule (2) of Rule 66 of the U.P. Trade Tax Rules, 1948, provides that the memorandum of appeal shall be signed by the appellant or his lawyer or his duly authorized agent. As to who is authorized to sign the memorandum of appeal, learned Counsel for the appellant drew attention of this court to the Letter/Order No. 2344, dated August 26, 1986 (annexure 8 to the appeal), whereby Deputy Commissioner was authorized to sign memorandum of appeal on behalf of the Commissioner, and vide Notification No. 173/Vitt Anu-5/Vya.Kar/2004, dated February 2004, (annexure 9 to the appeal), issued by the Government of Uttarakhand, it is provided that expression 'Joint Commissioner' shall be read in place of 'Deputy Commissioner'. Our attention is also drawn to authorization Order No. 802, dated June 11, 2007 (annexure 10 to the appeal), whereby the Joint Commissioners are authorized to sign the memorandum of appeal on behalf of Commissioners.
5. For the reasons as discussed above, the Tribunal has committed grave error of law in rejecting the memorandum of appeals filed before it by the Commissioner of Commercial Tax on the ground that neither Commissioner could maintain appeal in respect of order passed by Joint Commissioner, Commercial Tax, nor the memorandum was signed by the authorised person. The finding and order recorded by the Commercial Tax Tribunal, Dehradun, in this regard is liable to be set aside. We hold that the three second appeals filed by the Commissioner, Commercial Tax, before the Tribunal were maintainable against order of the Joint Commissioner, and were duly signed by the person authorized.
6. Accordingly, question of law No. 1 stands answered in favour of the Revenue/appellant.
7. Answer to question of law No. 2: (Re: the verified amounts mentioned in T.D.S.)
Admittedly, the respondent/assessee (dealer) is a contractor who had undertaken construction activities in the relevant assessment years, i.e., 1999-2000, 2000-01 and 2001-02. The contractee, in respect of the works contracts in question, is Airport Authority of India. It is not disputed that under Section 8D of the U. P. Trade Tax Act, 1948, the contractee was required to deduct the tax at source in respect of amount payable to works contractor (dealer). The learned Counsel for the appellant argued that the first appellate authority and the Tribunal have erred in law in holding that the assessee is not liable to pay the tax in respect of unverified amounts of T.D.S. certificates, issued by the contractee, which were not deposited in the Government treasury. On the other hand learned Counsel for the respondent argued that once the T.D.S. certificates were issued by the contractee, the dealer has no liability to pay the tax. It is further contended that whether the amount deducted is verified or not, or whether the amount mentioned in T.D.S. deposited in Government Treasury by the contractee or not, it cannot be directed to be recovered from the dealer particularly under Section 22 of the U.P. Trade Tax Act, 1948. In this connection reliance is placed on behalf of the respondent to the cases of Technical Construction Co., Muzaffarnagar v. Trade Tax Officer, Sector I, Muzaffarnagar [2006] 31 NTN 334 and Deora Electric Works, Allahabad v. State of U.P. [1995] UPTC 241.
8. With due regard to the view taken by the learned single judge of the Allahabad High Court in Deora Electric Works case [1995] UPTC 241, we are unable to accept the said view in which it has been held that refund cannot be withheld for want of verification. In our opinion when the amount deducted at source is not deposited in the account of the Government of Uttarakhand, the said Government has no liability to refund any amount. In the present case before us the authority who issued T.D.S. certificates is Airport Authority of India not the Public Works Department or the Irrigation Department of the State Government. Had it been some Department of State of Uttarakhand the amount deducted by such Department could have been taken as the amount deposited in the Government treasury of the State, even if not deposited in proper head. Where the T.D.S. certificates are issued, which is not even verified nor any amount deposited with the State treasury or account, it cannot be said that the payment of tax has been made. In the present case, the amounts which were verified are already credited in favour of the dealer. It is only in respect of those amounts which were not deposited in the account of the State Government, A.O. has passed the orders under Section 22 of the U.P. Trade Tax Act, 1948, asking the dealer to make the payment. However, we agree with the view taken by a Division Bench of the Allahabad High Court in Technical Construction Co.'s case [2006] 31 NTN 334 that it is not the duty of the dealer to prove that the amount mentioned in the T.D.S. was deposited in the Government treasury by the contractee or not.
9. Sri S.K. Posti, learned Counsel for the respondent, argued that the assessee (dealer) cannot be asked to pay the same tax twice. What amounts 'payment of tax' in the cases like the present one is clear from the language contained in Sub-section (5) of Section 8D of the U.P. Trade Tax Act, 1948. Sub-section (5) of Section 8D provides that any deduction made in accordance with the provisions of the Section and credited into the Government treasury shall be treated as a payment of tax on behalf of a person from whose bills or invoices the deductions were made. Where the amount was neither deducted nor deposited in any of the account of the State Government, merely for the reason that T.D.S. certificate is issued, it cannot be said that the payment of tax has been made on behalf of the assessee (dealer). If we hold otherwise, it would encourage issuance of false T.D.S. certificates by the contractees.
10. On behalf of the respondent/assessee it is contended that the State of Uttarakhand/revenue should have initiated proceedings under Sub-section (6) and Sub-section (7) of Section 8D of the Act against the contractee, if he failed to deduct or to deposit the deducted amount with the Government treasury. We have gone through the said provision of law carefully and we find that, if the amount is deducted by the contractee but not deposited in Government treasury, the tax authorities can and should have resorted to remedy provided under Sub-sections (6) and (7) of Section 8D of the Act. Sub-section (9) of Section 8D provides that payment by way of deduction in accordance with Sub-section (1) or Sub-section (2) shall be without prejudice to any other mode of recovery of tax due under the Act from the contractor. In other words, merely for the reason that tax was not deducted at source by the contractee it will not be open for the dealer to say that he is not liable to pay the tax, and the same can be recovered from him. Therefore, where T.D.S. certificates are found false, it is open for the assessing authority to recover the tax from the assessee, but where T.D.S. is found genuine and the contractee failed to deposit the amount in the Government treasury, the authorities concerned would proceed against such person under Sub-section (6) or Sub-section (7) of Section 8D of the U.P. Trade Tax Act, 1948.
11. Having heard learned Counsel for the parties and after going through the referred case laws, we are of the view that where under a statute contractee has been made an agency to collect the tax in the form of deductions in the payment, if the amount of tax is deducted by such agency, the assessee (dealer) cannot be made liable to pay the same tax again. But if such deduction is found false or the T.D.S. certificate is found not genuine, it cannot be said that the dealer (assessee) is not liable to pay the tax demanded by the A.O.
12. Accordingly, question of law No. 2 stands also answered in favour of the Revenue/appellant.
13. For the reasons as discussed above, the revisions are allowed. The impugned orders dated July 11, 2007, passed by the Commercial Tax Tribunal, Uttarakhand, in Second Appeal No. 52 of 2007 (assessment year 1999-2000), Second Appeal No. 53 of 2007 (assessment year 2000- 01) and Second Appeal No. 54 of 2007 (assessment year 2001-02) are hereby set aside. However, orders passed by the first appellate authority, Joint Commissioner (Appeals), are not interfered with.