J. CHELAMESWAR J.

The petitioner is a partnership firm engaged in the business of works contract. The petitioner undertakes such contracts either directly from the contractee or in some cases from a contractor in whose favour contract is already awarded, as a sub-contractor. The petitioner is also a dealer within the meaning of section 2(e) of the Andhra Pradesh General Sales Tax Act, 1957 (for brevity, "the Act") and is liable to pay tax under the Act, by virtue of section 5F of the Act, insofar as the value of goods utilised in the execution of the said works contract. Under section 5-H ("5-H : Deduction of tax at source. - (1) Notwithstanding anything contained in this Act, the Central Government or the State Government or an Industrial, Commercial or Trading Undertaking of the Central Government or of the State Government or a Local Authority or a Statutory Body, or a company registered under Companies Act, 1956 or any other person which the Government may notify from time to time, shall deduct from out of the amounts payable by them to a dealer in respect of works contract executed for them, an amount calculated at such rate as may be prescribed, but not exceeding three per cent of the total turnover;

(2) The tax deducted under sub-section (1) shall be remitted to Government in such manner and within such time, as may be prescribed.

(3) The authority making deduction under sub-section (1) shall furnish to the dealer from whom such deduction is made, a certificate, containing such particulars as may be prescribed.

(4) to (5) ...

(6) Where, tax in respect of works contract is remitted under sub-section (2), the tax payable by the dealer in respect of such works contract shall be reduced by the amount of tax already remitted under the said sub-section :

Provided that the burden of proving that the tax on such works contract has already been remitted and of establishing the exact quantum of tax so remitted shall be on the dealer claiming the reduction.") of the Act, the bodies enumerated therein, the Central Government or the State Government, etc., are obligated to deduct from out of the amount payable by such bodies to a dealer, in respect of the works contract executed for such bodies, such amount, as may be prescribed. Under sub-section (2), the tax amount so deducted, is required to be remitted to the State Government. Under sub-section (3), the authority making deductions pursuant to the obligation under sub-section (1) (for the purpose of convenience referred to as "contractee"), is required to furnish to the dealer from whom such deduction is made, a certificate containing such particulars of deduction, as may be prescribed. Under sub-section (6), wherever such amount is deducted and remitted, as contemplated under sub-sections (1) and (2), same amount shall be given credit to while determining the tax liability of the dealer, as and when assessment is completed.

Under fourth proviso to section 5F of the Act, the Legislature took note of the fact that there is a possibility of the contractor who is engaged in business of the execution of the works contract delegating/sub-contracting his rights and obligations in favour of the sub-contractor and, therefore, provided that whenever there is such an assignment in favour of a sub-contractor either wholly or partially, the dealer (contractor) is not liable for any tax under section 5F of the Act, subject to the condition that the contractor establishes the fact that the sub-contractor is a registered dealer under the Act and that the amount passed on by the contractor to the sub-contractor is included in the return of the turnover, filed by the sub-contractor.

One of the contractors, who had passed on his obligations under the works contract to the sub-contractor, earlier, sought clarification from the State Government, as to the necessity of the contractor deducting any further amount at the time of making payments to the sub-contractor. Dealing on the subject, the C