ASPINWALL AND COMPANY LTD. V. COMMISSIONER OF INCOME TAX AND OTHER

WP(C)/5227/2010

AI Insights

The case involves Aspinwall & Company Ltd., the petitioner, seeking clarification on their liability to deduct tax at source from payments made to the Kerala Headload Workers Welfare Fund Board, the third respondent, for manpower services related to loading and unloading operations. The petitioner argued that such deductions are mandatory under Section 194C of the Income Tax Act, and failure to comply could lead to penalties. The third respondent acknowledged the possibility of deductions but highlighted ongoing proceedings to obtain an exemption, which if granted, would necessitate a refund of the deducted amounts. The court's decision balanced the statutory requirements of tax deduction with the operational realities of the third respondent's services.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 756055 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-02-2010
• Assessment Year: misc
• Laws Referred To: Kerala Headload Workers Act, 1978, Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KOSHY GEORGE
• Assessee Lawyers: E K NANDAKUMAR; A K JAYASANKAR NAMBIAR; K JOHN MATHAI; P BENNY THOMAS; P GOPINATH; RAJAKANNAN
• Keywords: Income Tax; Mandamus; Tax Deduction; TDS; Headload workers
• Section: 194C

Judgement Text

" 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 23rd February, 2010 J U D G M E N T The petitioner has approached this Court with the following prayers: “i. Issue a writ of mandamus or such other writ, order or direction directing the first and 2nd respondents to issue a clarification regarding the liability of the petitioner to deduct tax at source from payments made to the 3rd respondent Board. ii. Issue a writ of mandamus or such other writ, order or direction, directing the 3rd respondent to accept the payments made by the petitioner after deduction of tax at source, for the supply of manpower to the petitioner, in connection with the loading and unloading and allied operations coming within the scope of the Kerala Headload Workers Act, 1978. iii. To declare that the payments made by the petitioner to the 3rd respondent, for services rendered by the latter under the Kerala W.P.(C) No. 5227 OF 2010 2 Headload Wrokers Act, would attract the provisions of Section 194C of the Income Tax Act, 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 3rd respondent Board and a further direction to the 3rd respondent Board to accept such payments, made by the petitioner after complying compliance with the procedural aspects under the Income tax Act, pending disposal of this Writ Petition; v. Grant such other and incidental reliefs as this Hon'ble Court may deem just and necessary on the facts and circumstances of this case; vi. Allow this Writ Petition (Civil) with costs to the petitioner. 2. Heard the learned Standing Counsel appearing on behalf of the respondents 1 ands 2 and also the learned Standing Counsel for the third respondent. W.P.(C) No. 5227 OF 2010 3 3. The issue involved is whether the petitioner is liable to effect 'TDS' in respect of the payments effected to the third respondent, while engaging Head Load Workers provided by the third respondent as the employer of such workers. The learned Counsel for the petitioner submits that the deduction is liable to be made as per the statutory prescriptions, as envisaged under Section 194 C of the Income Tax Act and that if any failure is there, the petitioner is liable to face the adverse consequences at the hands of the departmental authorities. It is in the said circumstance, that the petitioner has sought to get a clarification as to the course of action to be pursued. 4. The learned Standing Counsel appearing for the third respondent submits that necessary proceedings have already been filed by them before the appropriate authorities for getting 'exemption'. So far as the payments effected to the third respondent are concerned, if any deduction is made by the petitioner, the amounts naturally to be distributed to the workers concerned will be lower than the actual wages payable, which in turn may lead to a series of disputes. However, this cannot be W.P.(C) No. 5227 OF 2010 4 a persuading circumstance to hold that the petitioner could be permitted to act contrary to the mandate under the statute with regard to 'TDS'. As and when exemption is obtained,the 3rd respondent can bring it to the notice of the petitioner, who will be bound to give effect to the order in accordance with law. 5. In the above facts and circumstances, the petitioner is permitted to effect necessary deduction, in tune with the stipulation under Section 194C and effect payment to the Income Tax authorities and shall issue necessary certificates as to the 'deduction of tax at source' to the third respondent . The third respondent is at liberty to pursue further steps for getting exemption from such deduction and once exemption is obtained, the third respondent is to approach the departmental authorities for getting refund , if any. The Writ Petition is disposed of as above. P.R. RAMACHANDRA MENON, JUDGE. lk "