A Writ Petition challenging the deduction of 2% sales tax from service contracts under the Punjab VAT Act. The Court held that no tax is leviable without a sale or transfer of goods, declaring the deduction illegal.
Petitioner is released from deduction under Section 27; liberty granted to claim refund of amounts deducted.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
C.W.P. No.12223 of 2008 Date of decision: 12.11.2008
Freedom Info Systems.
-----Petitioner
Vs.
Bharat Sanchar Nigam Limited and others.
-----Respondents
CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL
HON'BLE MR JUSTICE L.N. MITTAL
Present:Mr. Raman Sharma, Advocate for the petitioner.
Mr. Anil Rathee, Advocate for respondent No.1-BSNL.
Mr. Piyush Kant Jain, Addl.A.G., Punjab. for respondents No.2 and 3.
ORDER :
C.W.P. No.12223 of 2008
2
which in substance related to data entry, apart from certain other
jobs. Job description of the contract is as under:-
| Sr. | Description | Rates |
|---|---|---|
| No. | inclusive of all taxes |
|
| 1. | Reconcilation of remittance in | Rs.1.40 per |
| bank | cheque/draft | |
| I. | - Data feeding of cheques & drafts |
|
| II. | - Preparation and printing of remittance challan in triplicate |
|
| III. | - Affixing of rubber stamps on each copy of remittance challan & cheques. |
|
| IV | Tearing of challan in two parts & stitching of cheques/drafts |
|
| V | Posting of cheques, cheques | |
dishonour and reconciliation |
||
| VI | Printing of cleared items | |
| VII | Printing of unlinked items | |
| VIII | Printing of schedule of remittance to bank |
|
| 2. | Reconciliation of drawing from bank |
0-01 per entry |
| The work comprises of following | ||
| stages: | ||
| I | The feeding of cheques | |
| II | Printing of schedule | |
| III | Posting of date of clearance of | |
| cheques, dishonour of cheques | ||
| IV | Reconciliation of drawing from bank |
|
| V | Printing of cleared items | |
| Vi | Printing of unlinked items |
C.W.P. No.12223 of 2008
3
| 3. | Date feeding and reconciliation of | 0-01 per |
|---|---|---|
| trial balance The work comprises of following stages: |
entry | |
| I | - Data feeding of entries |
|
| collection cash book | ||
| II | - Data feeding of entries |
|
| III | collection bank book | |
| - Reconciliation with collection bank cheque |
||
| IV | Taking out of print of | |
| balance/sheet current (receipt side) |
||
| B | The work includes of following | 0-01 per |
| stages of operation: | entry | |
| I | - Data feeding of entries |
|
| collection cash book | ||
| II | - Data feeding of entries |
|
| III | collection bank book | |
| - Reconciliation with collection bank cheque |
||
| IV | Taking out of print of | |
| balance/sheet | ||
| C | Detail of printing trail balance | |
| I | - Detail of print of J/Slip - Reconciliation of J/Slip - Printing trail balance - Printing sub ledger - Print of Ledger |
|
| 4. | Other computerized items |
Rs.2/- per entry |
| 5. | Data feeding of change in various | 0.01 paise |
| component of salary like basic | per entry | |
| pay, DA, HRA, CCA etc. and | ||
| recovery items like GPF (C), CPF | ||
| and advance etc. |
C.W.P. No.12223 of 2008
4
| 6. | Taking out of print of | 0-01 per | set |
|---|---|---|---|
| balance/sheet current (receipt | |||
side) |
|||
| The work referred includes | |||
| a) | GPF (C) and Refund class IV | ||
| b) | GPF (C) and Refund other than class IV |
||
| c) | Loan and Advances | ||
| d) | HRR | ||
| e) | PLI | ||
| f) | Society dues | ||
| g) | Welfare | ||
| 7. | Printing of pay vouchers/A | 0-01 per | set |
| Roll/Pay slip | |||
| 8. | Printing of Rent bill/MO list | 0-01 per | set |
| 9. | Data feeding of rent bill/MO list | 0-01 per | set |
| 10. | Data feeding of Medical & OTA | 0-01 per | set |
| 1 | Data entry of medical & OTA | ||
| 2 | Printing of voucher medical & | ||
| OTA | |||
| 3 | Printing of A roll Medical & OTA | ||
| 11. | Feeding of travels allowance | 0-01 per | set |
| 1.Data entry 2.Printing of voucher |
|||
| 12 | 3.Printing of A ROLL Printing of GPF (widrawal) |
0-01 per | set |
| sanctioning & maintenance of | |||
| employees wise records | |||
| 13 | Despatch of refund cheques & | 0-01 | per |
| building rent cheques | cheque” |
C.W.P. No.12223 of 2008
5
tax was attracted. Reference was made to Section 6 of the Act, which is the charging section. Gross turnover is defined in Section 2(m) of the Act, to include aggregate of the amounts of sales/purchase. It is submitted that before Section 6 of the Act is attracted, there has to be some sale or purchase. In the present case, it is not the case of the respondents that any sale or purchase is involved in executing the contract in question. Reliance has also been placed on a Single Bench judgment of this Court in M/s Keshob Plants v. BSNL C.W.P. No.19579 of 2002 decided on 13.8.2008, holding that if in a works contract, no sale of goods was involved, no sales tax could be allowed to be collected merely on the ground that the same could be refunded later.
C.W.P. No.12223 of 2008
6
on behalf of the petitioner is clearly applicable and supports the case of the petitioner.
to.
( ADARSH KUMAR GOEL ) JUDGE
November 12, 2008 ( L. N. MITTAL ) ashwani JUDGE
2 issues framed by the court
Whether deductions of 2% sales tax can be made under Section 27 when no transfer of goods or sale of goods is involved in a works contract.
Whether tax liability arises merely from the agreement between parties in absence of a statutory provision making the transaction exigible.
Colour shows how this judgement treated each authority
M/s Keshob Plants v. BSNLRelied on¶31
M/s Keshob Plants v. BSNL C.W.P. No.19579 of 2002
2 provisions across 1 enactments
Freedom Info Systems
Bharat Sanchar Nigam Limited
Adarsh Kumar Goel
L. N. Mittal
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
