Civil Writ Jurisdiction Case No. 4490 of 2006 ----------- In the matter of an application under Article 226 of the Constitution of India. ----------- M/S Arvind Techno Engineers Private Limited Dehri-on-Sone, District- Rohtas through its Managing Director- Arun Jain, son of Late Nirmal Prasad Jain Dehri-on-Sone, Rohtas --- -- ----------- Petitioner. Versus 1. The State of Bihar 2. The Commissioner of Commercial Taxes, Bihar, Patna. 3. The Deputy Commissioner of Commercial Taxes, Sasaram, Circle, Sasaram. 4.The Assistant Commissioner of Commercial Taxes, Sasaram Circle. 5. M/S Somdutt Builders Limited- N.C.C (J.V.) Dehri-on-Sone, District- Rohtas ---- -- --------- Respondents. ------------ For The Petitioner : Mr. K.N. Jain, Sr.Advocate, Mr. Rabindra Prasad & Dr. R. Usha. For The Respondent : Mr. Sunil Kumar Karn, A.C. to A.A.G. 6. -------- P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE KISHORE K. MANDAL S. K. Katriar & Kishore K. Mandal, JJ. This writ petition is directed against the following orders of assessment passed by the learned Assistant Commissioner of Commercial Taxes, Sasaram Circle, Sasaram, against the petitioner under the provisions of the Bihar Finance Act, 1981 (hereinafter referred 2 to as the Act), whereby he has made best-judgment assessment with respect to the taxable turnover of the petitioner for having executed works contract within the Sasaram Circle, and has assessed it to tax under the Act: (i) Order dated 7.2.2006 (Annexures 8 series), with respect to the financial year 2002-2003. (ii) Order dated 7.2.2006 (Annexures 8 series), with respect to the financial year 2003-2004. (iii) And the order dated 7.2.2006(Annexures 8 series), with respect to the financial year 2004-2005. 2. According to the writ petition, Somdatt Builders Ltd.(hereinafter referred to as ‘the main contractor’), has been awarded contract for laying down and/or strengthening, widening, and improvement of national highway by the National High Way Authority, Government of India. The main contractor has awarded sub-contract of its work to the petitioner company by an agreement between them. The petitioner’s further case is that the privity of contract is between the Authority and the main contractor, and the latter has been submitting returns and paying taxes under the Act to the State of Bihar. The learned Assessing 3 Officer declined to accept this position, and has assessed the petitioner to tax under the Act notwithstanding the petitioner’s contention that the main contractor has returned the figures with respect to the work off loaded to the petitioner, and (the main contractor) has paid taxes for the three financial years in question. 3. While assailing the validity of the impugned orders, learned counsel for the petitioner submits that the position is evident that the petitioner has worked only for the main contractor in the Sasaram Circle. He next submits that the assessment orders with respect to the main contractor have been completely over-looked by the learned Assessing Officer. He also submits that the respondent authorities have disclosed their case in the counter affidavit in this Court which shows that the learned Assessing Officer has taken into account documents which are of later dates than those of the assessment orders. He relies on the following reported judgments in support of his submission that double taxation with respect to work contracts is impermissible in law. Once it is established that the main contractor had paid the taxes under the Act with respect to the works contract in question, the 4 sub-contractor can not be made liable. He relies on the following reported judgment: (i) State of Andhra Pradesh and others Vs. Larsen & Toubro Limited and others, 2008(9) S.C.C.191. (ii) Hindustan Dorr-Oliver Ltd. and another V. Union of India and others, 1989 (75) S.T.C.211(Pat.). 4. Learned Government Counsel submits that the petitioner did not file returns before the learned Assessing officer in spite of repeated opportunities except for one quarter for the financial year 2002-2003. 5. We have perused the materials on record and considered the submissions of learned counsel for the parties. It appears to us that the petitioner is a registered contractor under the provisions of the Act. It further appears that he has executed works contract in the Sasaram Circle and was, therefore, liable to submit returns which it did not do except for one quarter for the financial year 2002-2003, showing gross turn- over as NIL. It is evident on a perusal of the assessment order(s) that the learned Assessing Officer gave repeated opportunities to the petitioner to appear and produce documents in support of its case. The petitioner did not 5 produce any material or document in support of its case, and indeed did not set up any case at all before the learned Assessing Officer creating a clear impression that it was trying to evade disclosure of the relevant information. The petitioner was represented by its counsel, and did not avail of the repeated opportunities afforded to it to produce the relevant documents. The learned Assessing Officer was very indulgent to the petitioner by adjourning the matter repeatedly for the purpose. The petitioner was determined to adopt unethical practices of total suppression of material facts and documents. The learned Assessing Officer was, therefore, left with the only option of best-judgment assessment. In view of complete absence of materials before the learned Assessing Officer, it was neither known to the learned Assessing Officer, nor is known to us, that Somdatt Builders Ltd. is the main contractor and the petitioner is the sub- contractor. There was no material to show that the main contractor had paid the taxes. It is a possible situation that the privity of contract may be between the Authority and the petitioner. On a perusal of the impugned orders, it is evident that the learned Assessing Officer acted with full fairness, giving repeated opportunities 6 to the petitioner to produce materials and documents in support of its case and was driven to the course of best-judgment assessment. As stated above, the petitioner has /had the audacity of not submitting its returns except for one quarter and that too showing gross turn-over as NIL. We are of the view that the learned Assessing Officer acted with great care and caution in determining the taxable turn-over of the petitioner and has reached the conclusions which are essentially in the domain of facts. In exercise of writ jurisdiction, we do not find it possible to examine the same. We entirely agree with the view taken by the learned Assessing Officer. 6. Learned counsel for the petitioner has made attempts before us to criticize some of the submissions made in the counter affidavit along with Annexures thereto, in an effort to satisfy us that irrelevant materials has been taken into account by the learned Assessing Officer. The attempt on the part of the petitioner is tantamount to converting this Court into one of Assessing officer. He is not mindful of the position that it is not a forum of facts, and it is difficult for us to go into those questions. Had this been placed before, and brought to the 7 notice of, the learned Assessing Officer, then this Court might have been in a position to go into those questions in exercise of supervisory writ jurisdiction to find out whether or not the conclusions arrived at by the learned Assessing Officer are grossly unjust and arbitrary, or are possible conclusions. 7. Learned counsel for the petitioner has relied on the two reported judgments which undoubtedly are to the effect that in a case of works contract, double taxation is impermissible. If the main contractor has been taxed for the goods incorporated in the production of the final product, then the sub-contractor can not be fastened with the liability of sales tax for the same goods. We are of the view that, it is an equally possible situation that there may be a contract between the main contractor and sub- contractor that the entire tax liability shall be discharged by the sub-contractor in which case the latter is surely liable for the taxation under the Act. No case at all was made out before the learned Assessing Officer. In that view of the matter, the judgments are inapplicable to the facts and circumstance of the present case. 8 8. In the result, there is no merit in this writ petition. It is accordingly dismissed. There shall be no order as to costs. ( S. K. Katriar, J.) (Kishore K. Mandal, J.) High Court Patna, Dated 5th February, 2010. Vinay/ NAFR