CIC: The Indirect taxes are destination based taxes & the intermediaries merely pass on the burden on to the ultimate beneficiary; The payee has an equitable right to know if the amount paid as tax reaches Government or not; no loss to third party
CIC: The Indirect taxes are destination based taxes and as such, the intermediaries merely pass on the burden on to the ultimate beneficiary. Thus, the payee has an equitable right to know if the amount paid as tax reaches Government or not. With such disclosure, the third party does not stand a chance to lose out anything much less its commercial competitiveness but on the other hand, the Taxman does stand a chance to lose tax due to misappropriation by intermediaries
Information sought and background of the case:
Vide RTI application dated 11.05.2016 the applicant sought following information w.r.t. the deposition of tax collected by builder from him on account of rendering construction services at H-39, Green Park Extension Delhi:
1. Whether the said amount had deposited in the Govt. A/c for G.F, basement+1/4 of stilt area of the property.
2. How much amount deposited by above referred company as Trade & Tax in r/o property no. H 39 green park extn. New Delhi.
3. The amount deposited of first floor+1/4 stilt area be intimated by the builder/ contractor of above referred companies.
4. The amount deposited of second floor+1/4 of stilt area be intimated.
5. The amount deposited of third floor +1/4 of stilt area deposited.
6. Is there any rule the builder/ contractor constructed his own floor i.e. 2nd floor+1/4 of stilt area is not liable to pay any trade& tax etc.
7. Is there any rule the owner constructed his floor from builder/ of contractor+1/2 stilt area is not liable to pay any trade & tax etc.
8. The builder constructed so many buildings in the financial year/ calendar year+ he was not liable to pay trade & tax (i.e.) financial year or jan-dec.
The CPIO/Asstt. Commissioner transferred the RTI application to the PIO Ward No. 107. PIO, Ward no. 114 furnished the information on 09.06.2016. Dissatisfied with the reply dated 09.06.2016, the appellant approached to FAA dated 14.06.2016. FA order dated 05.07.2016 upheld the decision of PIO and observed that no further information was required to be given. Feeling aggrieved, the appellant approached the Commission.
Relevant facts emerging during hearing:
Both the parties are present and heard. The appellant states to have availed the services of M/s SSG Buildcon LLP, M/s Vista Residency Pvt. Ltd. and M/s SSG Exi Pvt. Ltd. in construction of his residential property at H-39, Green Park Extension, New Delhi. In this context, the aforesaid builder firms are stated have charged a sum of Rs. 4,03,200/- on a whole out of which the appellant bore a sum of Rs. 1,51,831 as his share amongst other co-owners of the said property. Through the present RTI application, the appellant sought to know if the said amount was ever deposited with the respondent Department besides other incidental information. He also wants to know if other floor owners were also charged similarly by the builder. The appellant expresses his apprehension that the said amount was misappropriated by the builder firm. Per contra, the PIO states that out of the three firms only M/s Vista Residency Pvt. Ltd. and M/s SSG Exi Pvt. Ltd. were found to be registered with the department at the relevant point of time as presently both the ventures have shut. The other firm M/s SSG Buildcon LLP is stated to have never registered with the department with a valid TIN account. The PIO expresses his inability to furnish any further information as the appellant had not shared precise date of transaction or copy of bill whereof VAT or Service Tax was charged by the builder.
The Commission takes note of the copy of an undated invoice letter issued under the name of ‘SSG Buildcon LLP’ calling upon the appellant to pay a sum of Rs. 4,03,200/- favouring ‘SSG Buildcon LLP’. It remains a mystery as to how a non TIN registered entity can collect sums on account of Service Tax, VAT etc.
On the other hand, the decision of PIO to deny information under Rule 98 of Delhi VAT Act, 2004 and Section 8(1)(d) Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen, information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information; of the RTI Act, 2005 is premised on a complete misreading of the provisions of law. It is a settled position that the Indirect taxes are destination based taxes and as such, the intermediaries merely pass on the burden on to the ultimate beneficiary. Thus, the payee has an equitable right to know if the amount paid as tax reaches Government or not. With such disclosure, the third party does not stand a chance to lose out anything much less its commercial competitiveness but on the other hand, the Taxman does stand a chance to lose tax due to misappropriation by intermediaries.
After hearing parties and perusal of record, the Commission directs the PIO to furnish complete information to the appellant within 2 weeks. The Commission also recommends the Commissioner, Trade & Taxes Department to enquire into the matter to rule out any instance of tax evasion.
The appeal is allowed accordingly.
Citation: Harpal Singh Marwah v. Department of Trade & Taxes in F. No.CIC/DPTATA/A/2016/305114, Date of Decision : 09.08.2017