Case Law Details
Bundelkhand University Vs Commissioner Commercial Tax (Allahabad High Court)
Allahabad High Court held that penalty proceedings initiated against a Government Institution for non-deduction of tax under section 8(D) of U.P. Trade Tax Act from amount payable to works contractor unsustainable as once the said contractor was assessed to tax creating tax liability on payment received from the Government Institution.
Facts- The revisionist is an educational institution imparting education. The primary and dominant function of the revisionist is to impart education to students, which is not a business activity.
According to the revisionist, it is neither a dealer or a contractor nor has appointed any contractor for execution of work contract. It is functioning under the control of the U.P. Government. Whenever, there is a requirement for any building to be used by students and teachers in the university campus, it is forwarded to the State Government to execute construction work. The State Government on receipt of the requirement allocates budget and transfers the same to the university and authorizes and appoints the U.P. Public Works Department for construction of building.
The university had got the building constructed by Government Agency called as U.P. Rajkiya Nirman Nigam Ltd. For the relevant assessment year, U.P. Rajkiya Nirman Nigam was subjected to the assessment and an order u/s. 7 (3) of the Act of 2008 was passed by the Deputy Commissioner (Assessment), Khand 8, Commerical Tax, Jhansi, wherein a liability of Rs.6,76,290/- was made against the Government Agency.
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