Wp(C) v. Commissioner Of Income Tax And Other

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON TUESDAY, THE 23RD FEBRUARY 2010 / 4TH PHALGUNA 1931 WP(C).No. 5227 of 2010(C) ------------------------- PETITIONER: --------------- ASPINWALL & COMPANY LTD., P.O.BOX NO.560, WILLINGDON ISLAND, KOCHI-682003. REPRESENTED BY ITS DEPUTY MANAGER, MR. R.VENUGOPALAN. BY ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH SRI.RAJA KANNAN RESPONDENTS: --------------- 1. THE COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018. 2. THE DEPUTY COMMISSIONER OF INCOME TAX (TDS) CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018. 3. THE KERALA HEADLOAD WORKERS WELFARE FUND BOARD, COCHIN PORT TRUST AREA COMMITTEE, DLB JUNCTION, WILLINGDON ISLAND, KOCHI-682003. R3 BY BY ADV. SRI.KOSHY GEORGE, SC, KHLWWB THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23/02/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 5227 OF 2010 ......................................................................... Dated this the 23[rd] February, 2010 J U D G M E N T The petitioner has approached this Court with the followingprayers: “i. Issue a writ of mandamus or such other writ, order or direction directing the first and 2[nd]respondents to issue a clarificationregarding the liability of the petitioner to deduct tax at source from payments made to the 3[rd]respondent Board. ii. Issue a writ of mandamus or such other writ, order or direction, directing the 3[rd] respondent to accept the payments made bythe petitioner after deduction of tax at source,for the supply of manpower to the petitioner, inconnection with the loading and unloading andallied operations coming within the scope of theKerala Headload Workers Act, 1978. iii. To declare that the payments made by the petitioner to the 3[rd] respondent, for servicesrendered by the latter under the Kerala Headload Wrokers Act, would attract theprovisions of Section 194C of the Income TaxAct, with regard to deduction of tax at source; iv. To issue a direction, permitting the petitioner to deduct tax at source from payments made to the 3[rd] respondent Board and a further direction to the 3[rd] respondent Board to accept such payments, made by thepetitioner after complying compliance with theprocedural aspects under the Income tax Act,pending disposal of this Writ Petition; v. Grant such other and incidental reliefs asthis Hon'ble Court may deem just andnecessary on the facts and circumstances ofthis case; vi. Allow this Writ Petition (Civil) with costs tothe petitioner. 2. Heard the learned Standing Counsel appearing on behalf of the respondents 1 ands 2 and also the learnedStanding Counsel for the third respondent. W.P.(C) No. 5227 OF 2010 3. The issue involved is whether the petitioner is liable toeffect 'TDS' in respect of the payments effected to the thirdrespondent, while engaging Head Load Workers provided by thethird respondent as the employer of such workers. The learnedCounsel for the petitioner submits that the deduction is liable tobe made as per the statutory prescriptions, as envisaged underSection 194 C of the Income Tax Act and that if any failure isthere, the petitioner is liable to face the adverse consequencesat the hands of the departmental authorities. It is in the saidcircumstance, that the petitioner has sought to get a clarificationas to the course of action to be pursued. W.P.(C) No. 5227 OF 2010 3. The issue involved is whether the petitioner is liable toeffect 'TDS' in respect of the payments effected to the thirdrespondent, while engaging Head Load Workers provided by thethird respondent as the employer of such workers. The learnedCounsel for the petitioner submits that the deduction is liable tobe made as per the statutory prescriptions, as envisaged underSection 194 C of the Income Tax Act and that if any failure isthere, the petitioner is liable to face the adverse consequencesat the hands of the departmental authorities. It is in the saidcircumstance, that the petitioner has sought to get a clarificationas to the course of action to be pursued. 4. The learned Standing Counsel appearing for the thirdrespondent submits that necessary proceedings have alreadybeen filed by them before the appropriate authorities for getting'exemption'. So far as the payments effected to the thirdrespondent are concerned, if any deduction is made by thepetitioner, the amounts naturally to be distributed to the workers concerned will be lower than the actual wages payable, which inturn may lead to a series of disputes. However, this cannot be W.P.(C) No. 5227 OF 2010 a persuading circumstance to hold that the petitioner could bepermitted to act contrary to the mandate under the statute withregard to 'TDS'. As and when exemption is obtained,the 3[rd]respondent can bring it to the notice of the petitioner, who willbe bound to give effect to the order in accordance with law. 5. In the above facts and circumstances, the petitioner ispermitted to effect necessary deduction, in tune with thestipulation under Section 194C and effect payment to the IncomeTax authorities and shall issue necessary certificates as to the'deduction of tax at source' to the third respondent . The thirdrespondent is at liberty to pursue further steps for gettingexemption from such deduction and once exemption is obtained,the third respondent is to approach the departmental authoritiesfor getting refund , if any. The Writ Petition is disposed of as above. P.R. RAMACHANDRA MENON, JUDGE.