JUDGMENT
K. SREEDHARAN J. – The petitioner has approached this court for the issuance of a writ of mandamus or other appropriate writ to the first respondent, the Kerala State Electricity Board, to a refund of Rs. 19,539 recovered from the petitioner towards income-tax as seen from exhibits P-1 and P-2 statements, or in the alternative, to direct the first respondent to furnish to the petitioner a certificate in Form No. 19C of the Income-tax Act, 1961, in respect of the amounts recovered as income-tax as shown in exhibits P-1 and P-2
Notice of this petition was served on the respondents way back in 1985. The first respondent has not cared to file a counter-affidavit disputing the claims made by the petitioner. Counsel representing respondents Nos. 1 and 2 were heard.
The short facts germane for the decision of the original petition are as follows : The petitioner secured a contract from the first respondent in 1973 to cut a bye-pass channel at T. I. point along the tail race system to the confluence of Valiar and Nachar construction. Before the work was completed, it was stopped. The dispute between the petitioner and the first respondent was referred to an arbitrator. In support of the plea put forward by the first respondent, they filed exhibits P-1 and P-2 statements. These statements show the amounts recovered by the first respondent towards income-tax in accordance with the provisions contained in the Income-tax Act. From exhibit P-1, it is seen that a sum of Rs. 13,953 was recovered towards income-tax due from the petitioner. Exhibit P-2 shows a recovery of Rs. 5,640. Thus, the total amount recovered towards income-tax due from the petitioner amounts to Rs. 19,539. For the year 1975-76, the Income-tax Department assessed the petitioner to pay a sum of Rs. 2,396 as tax and directed him to furnish a certificate in Form No. 19C of the Income-tax Act. Since the first respondent did not issue certificate in Form No. 19C, the petitioner filed Original Petition No. 1143 of 1989 before this court. That original petition was disposed of observing :
“Whether it be as a mere proposal or as a final decision, if the Electricity Board has actually withheld any amount from the petitioners in order to meet their income-tax liabilities, it is only fair that the Board issues the necessary certificate or certificates under section 203 of the Income-tax Act. I direct the Electricity Board to issue such certificate or certificates to the petitioners within six weeks from today.”
Since the first respondent did not issue any certificate, the petitioner filed Original Petition No. 4917 of 1982 (Contempt) for taking appropriate action against the Board. In that original petition, the Board took the stand that no amount has been withheld and that the entire amount due to the petitioner has been paid. On account of such a stand, this court took the view that :
“Prima facie, it cannot be said that there is any circumstance which would warrant action by this court.”
In this view, that petition was closed observing :
“There is no bar to the petitioner making any motion before the income-tax authorities in order to seek verification whether any amount due to the petitioner in any way withheld by the Electricity Board.”
The income-tax authorities, thereafter, informed the petitioner by exhibit P-12 dated September 25, 1984, that the first respondent had not deducted any amount towards tax due from the petitioner for the years 1973-74 and 1974-75. Hence, this original petition.
Exhibit P-7 is the communication sent by the Chief Engineer (Civil), Investigation and Arbitration, to the petitioner on June 15, 1978. The first paragraph of that letter reads :
“Year-wise details of the Income-tax recovered in the work advance bills during the financial year 1973-74 are being collected by referring to the old records of the defunct Idukki P. T. Division III, Moolamattom. Necessary certificate in Form No. 19C for producing before the Income-tax Officer, B-Ward, Kottayam, as desired will be furnished by the Executive Engineer, Idukki, Accounts Closing Unit.”
The communication proves beyond any shadow of doubt that amounts were recovered from the sums paid to the petitioner towards income-tax during the financial year 1973-74.
Section 194C of the Income-tax Act casts a legal duty on the person responsible for paying any sum to another for carrying out any work in pursuance of a contract to deduct an amount equal to 2% as income-tax on the income of that person. This statutory liability of the first respondent cannot be taken to have been ignored by the Board. As and when amounts were due to the petitioner, the first respondent was duty bound to deduct 2% of that amount by way of income-tax. Thus, while the contract between the petitioner and the first respondent was subsisting, the first respondent should have deducted 2% of the amounts payable to the petitioner towards income-tax. Without such deduction, no amount could have been paid by the first respondent to the petitioner either. This being the legal position, the argument advanced by learned counsel for the first respondent that no amount was deducted towards income-tax on account of the income of the petitioner cannot be accepted.
Exhibit P-1 is a statement of accounts showing the payments and recoveries effected by the first respondent while the contract between the parties was subsisting. As per that statement of accounts, it is seen that on January 10, 1975, a sum of Rs. 9,913 was recovered towards income-tax and on January 19, 1975, a further sum of Rs. 4,040 was also deducted towards income-tax. From exhibit P-2, another statement of accounts filed by the first respondent, it is seen that a sum of Rs. 5,640 was deducted from the amounts due to the petitioner towards 2% income-tax. Exhibits P-1 and P-2 are statements of accounts filed by the first respondent before the arbitrator who adjudicated the dispute between the petitioner and the first respondent. The authenticity of these statements of accounts cannot be disputed by the first respondent. Nor has the first respondent challenged the correctness of exhibits P-1 and P-2 by filling a counter-affidavit in this proceeding
As stated earlier, the first respondent cannot be presumed to be ignorant of the provisions contained in section 194C of the Income-tax Act. The result is that the Electricity Board must be deemed to have deducted 2% from the amounts due to the petitioner by way of income-tax deductible at source. After having deducted the income-tax, the first respondent cannot refuse to issue the certificate in Form 19C under the Income-tax Rules.
In view of what has been stated above, I direct the first respondent to issue certificate in Form 19C for the amount of Rs. 19,593 to the petitioner to enable him to get credit for that amount from the Income-tax Department. The above certificate should be issued as expeditiously as possible, at any rate, within two months from the date of receipt of a copy of this judgment.
The original petition is allowed.
Issue carbon copy of the judgment to the parties on usual terms.