M/S SUPRA MARKETING AGENCIES versus COMMERCIAL TAX OFFICER, HYDERABAD AND ORS.

Citation: [2006] SUPP. 8 S.C.R. 1120 · Decided: 13-11-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

... 
A 
MIS SUPRA MARKETING AGENCIES 
v. 
COMMERCIAL TAX OFFICER, HYDERABAD AND ORS. 
NOVEMBER 13, 2006 
B 
[ARIJITPASAYAT ANDLOKESHWARSINGHPANTA,JJ.] 
-~ 
Andhra Pradesh General Sales Tax Act, 1957/Central Sales Tax, 1956-. 
Sales Tax-Direction from Revenue-To Corporation seeking services /rvm 
c assessee-dealer-To deduct sales tax at source on the payments made by it 
to the assessee-dealer-Due to some dispute regarding amounts payable to 
the assessee, only part of the sales tax deducted at· source deposited by 
t, 
Corporation to the Revenue-Revenue demanding balance amount from the 
assessee-Demand challenged in Writ Petition-Dismissed-On appeal, held: 
It is the Corporation and not the assessee who is required to deposit the 
D tax-Since the tax had been deducted at source by the Corporation in terms 
of directions given by the Revenue. 
< 
f 
Appellant was a dealer registered underr Andhra Pradesh General Sales 
t 
Tax Act, 1957 and Central Sales Tax Act, 1956. State Commercial Tax 
r 
Department issued a letter to the Andhra Pradesh .Backward Classes 
f
E Cooperative Finance Corporation, directing that taxes are to be deducted at 
source on the payments made by it to the appellant The Corporation, for the 
purpose of a project entered into an agreem~nt with the appellant for supply 
of certain articles. Corporation deducced certain amounts at source in respect 
of sales tax payable. There W?~ some dispute between the Corporation and the 
F appellants with regard to the amount payable to the appellants. The 
Corporation deposited only a part of the amount deducted at so~rce. The Sales 
Tax Authorities wanted to recover the balance amount from the appellant 
Respondent-Revenue issued notices of attachment to .Bank to attach bank 
·"\. 
account of the appellant to the extent of the balance amount due. Appellant 
filed Writ Petition, questioning the act and the same was dismissed by High 
G Court. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: The amount which has been deducted at source by the 
Corporation is required to be deposited with the Commercial Tax Department 
H 
1120 
'-" 
SUPRA MARKETING AGENCIES i: COMMERCIAL TAX OFFICER, HYDERABAD [PASA Y AT. J.] 
1121 
The amounts have been deducted in terms of the directions given by the A 
Commissioner. The stand of the Corporation that it has raised the di£pute 
about the amounts payable is really unconnected with the issue under. 
consideration. Undisputedly, since the amounts have been deducted at source 
from the amounts paid to the appellant for supply of articles, Corporation had 
to deposit the amounts. In the Circular of the Deputy Commissioner, it has B 
been clearly stated that the tax is to be deducted at source wherever tax is 
leviable. In the Commissioner's Circular, it has been clearly stated that in a 
meeting it was decided to deduct tax at source in respect of all purchases 
made by the Corporation and to deposit the said amount with the Commissioner. 
In view of the factual position, it is directed that the Corporation should deposit 
the amounts which have not yet been deposited in respect of amounts deducted C 
at source as tax. (1123-D-E; 1124-A-D) 
CIVIL APPELLATE JURISDICTION: Civil Appeal No.4912 of2006. 
From the Judgments and final Orders dated 9-8-2005 and 28. I 0.2005 of 
the High Court of Judicature, Andhra Pradesh at Hyderabad in W.P. No.3398/ D 
2005 and Review WPMPNo. 28707/2005 in W.P. No.3398/2005 respectively. 
D. Dave, Rana Mukherjee, Siddarth Gautam and Goodwill Indeevar for 
the Appellant . 
R. Sunderavardhan, Manoj Saxena, Rajni Kr. Singh, Rahul Shukla, T.V. E 
George and Mrs. D. Bharathi Reddy For the Respondents. 
The Judgment of the Court was delivered by 
ARIJIT PASAY AT, J. Leave granted. 
The controversy in the present appeal lies within a narrow compass. F 
Th~ appellant is a dealer registered under the provisions of Andhra Pradesh 
General Sales Tax Act, 1957 (in short the 'Act') and the Central Sales Tax Act, 
1956 (in short the 'CST Act'). The present disputes relates to the assessment 
years I 998-1999 and 1999-2000. The State Government in the Commercial Tax 
Department issued a letter to the Andhra Pradesh Backward Classes G 
Cooperative Finance Corporation Limited (in short 'Corporation') directing 
that taxes are to be deducted at a source on the payments made by it to the 
appellant. It was stipulated that the amounts so deducted at source are to be 
deposited with the Commercial Tax Depart

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