Hon'ble Subhash Chandra Nigam, J.
(Delivered by Prakash Krishna, J.) By means of the present petition, the petitioner challenges Clause 4 of the compounding scheme dated 11-2-2005 for the civil contractors for the year 2004-05. By Clause 4 of the said scheme, an amendment to the scheme has been made effective from 15-2-2005 whereby the compounding fee on contract executed on 15-2-2005 is to be computed at the rate of 2% of contract value as against 1%, the earlier one.
The petitioner is a Class II civil works contractor, approved by the Central Public Works Department. Under Section 7D of U.P. Trade Tax Act (hereinafter referred to as the Act), the State Government has been empowered to float scheme for payment of trade tax as a composition money either in lump sum or at the agreed rate on the turnover of a dealer in lieu of tax that may be payable by it in respect of such goods or class of goods and for such period as may be agreed upon. In pursuance of the aforesaid statutory provision, the State Government on 10-8-2000 issued a composition scheme in respect of civil contractors with which we are concerned in the present petition. The petitioner, a civil contractor, opted to pay trade tax in lump sum in lieu of actual turnover as provided for under Section 7D of the Act in pursuance of the aforestated scheme. Initially, the payment of lump sum amount in lieu of trade tax was @1% of the contract amount. By subsequent notification, it has been provided, vide clause 4 thereof, that the composition amount shall be payable at the rate of 2% in place of 1% w.e.f. 15-2-2005. Challenging the said order of the State Government, the present writ petition has been filed. The principal contention is that the enhancement in the composition fee cannot be made 2 during the currency of a financial year. It could be made with effect from the date of commencement of a financial year.
A counter affidavit, on the pleas inter alia that the State Government is authorised to vary the compounding scheme unilaterally in the mid of a financial year, has been filed. The impugned action has been sought to be justified on the ground that clause 15 of the scheme so authorises the State Government to enhance the composition amount at any time without assigning any reason. The petitioner has entered into the agreement with the State Government by opting the composition scheme and it cannot wriggle out from the terms and conditions which are part and parcel of the contract in between the petitioner and the State Government.
Sri S.D. Singh, learned counsel for the petitioner submits that on a true and correct interpretation of clause 15 of the composition scheme, it is but evident that the composition amount can be enhanced only on the beginning of the financial year and not in the mid session of the financial year. Sri U.K. Pandey, learned Standing Counsel, on the other hand, submits that the State Government has every right to vary the composition amount even during currency of a financial year. Elaborating the arguments, he submits that the said power has been given to the State Government by virtue of Section 7D of the Act itself and as such, there is no infirmity in clause 4 of the scheme dated 11-2-2005.
Considered the respective submissions of the learned counsel for the parties and perused the record.
By means of the G.O. Dated 11-2-2005, it has been provided that w.e.f. 15-2-2005 the composition amount shall be payable at the amended rate i.e. at the rate of 2% of the contract amount instead of 1%. Its clause 4 provides that the said enhancement in the composition amount shall be applicable in respect of all such contracts which are entered into on 15-2- 2005 or thereafter. It was not contended by the learned counsel for the petitioner that the State Government do not possess power to enhance the composition amount. The only objection raised by the petitioner is that the rate of compounding fee prescribed at the rate of 1% of the contract value remained constant from 10-8-2000 to 14-2-2005 i.e. for about 4-1/2 years. The petitioner opted for compounding under the compounding scheme dated 3 10-8-2000. Clause 15 of the compounding scheme dated 10-8-2008, under which the petitioner had applied for composition fee for the financial year 2000-01 and onwards till 15-2-2005, reads as follows:-
"(15) fdlh foRrh; o"kZ ls ;kstuk dks fcuk dkj.k crk;s lekIr djus vFkok ;kstuk dh fu/kkZfjr lek/kku /kujkf'k esa c<~ksRrjh djus vFkok vU; fdlh izdkj dk la'kks/ku djus dk vf/kdkj ek0 O;kikj dj ea=h dks gksxk] fdUrq ftl fnu ls jkT;
ljdkj lek/kku ;kstuk u ykxw djus dk fu.kZ; ysrh gS ml fnu rd izkjEHk dh xbZ lafonkvksa ds dk;Z ij rRle; ykxw ;kstuk dk ykHk ml lafonk ds lEcU/k esa fn;k tk;sxk vkSj ml fnu ds ckn dh lafonkvksa ls lEcaf/kr dk;Z ij u;s izkfo/kku ykxw gksaxsA ** Learned counsel for the petitioner contends that the composition amount cannot be enhanced in the mid of the financial year. It could be done only in the beginning of the financial year. On a plain reading of the aforestated clause 15, it is difficult to agree with him. The contention is that the said clause should be read along with the opening part of clause 15. The opening part of clause 15 provides that in any financial year, without giving any notice, the scheme can be abolished. The said abolition of scheme should be in the beginning of a financial year. The words " fdlh foRrh; o"kZ*** cannot be read with clause which begins with "vFkok ;kstuk dh fu/kkZfjr lek/kku /kujkf'k esa c<~ksRrjh djus**. Use of words "vFkok** (or) in clause 15 shows that the opening words of clause 15 do relate to the abolition of the scheme in the beginning of a financial year. The words "relating to beginning of financial year" cannot be imported in the second clause i.e. the clause which reads after the word "vFkok** (or). This being so, we do not find any substance in the writ petition. The petition is devoid of any merit.
It is, therefore, dismissed, but no order as to costs.
(Prakash Krishna, J.) (S.C. Nigam, J.) Date:13-1-2010 ALS 4 5 6 7