TaxTMI 
TaxTMI 
2013 (10) TMI 1218
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....ats, provisional assessment order dated 21.9.2013 passed by the Dy Commissioner, Commercial Tax, Sector-3, NOIDA for June 2013 under the U.P. Value Added Tax Act, 2008, for levying commercial tax on the sale of goods under the works contracts/ agreements in constructions as defined in Clause (m) of Section 2 read with Section 3F of the Act has been challenged on the ground that in such building contracts/ agreements no sale of goods is involved, and that what is sold or transferred is the constructed flats/ houses/ apartments as chattels. 3. Earlier similar writ petitions were entertained on the ground that in M/s Larsen & Toubro Limited & another vs. State of Karnakata and another, SLP (C) No.17741 of 2007 a two-Judge Bench of Hon'ble S....
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....lding, the goods (chattels) like cement, concrete, steel, bricks etc. are intended to be incorporated in the structure and even though they lost their identity as goods but this factor does not prevent them from being goods. (iii) Where a contract comprises of both a works contract and a transfer of immovable property, such contract does not denude it of its character as works contract. The term ?works contract? in Article 366 (29- A)(b) takes within its fold all genre of works contract and is not restricted to one specie of contract to provide for labour and services alone. Nothing in Article 366(29-A)(b) limits the term ?works contract?. (iv) Building contracts are species of the works contract. (v) A contract may involve both a ....
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....r for supply of labour and services. In other words, the single and indivisible contract, now by Forty-sixth Amendment has been brought on par with a contract containing two separate agreements and States have now power to levy sales tax on the value of the material in the execution of works contract. (ix) The expression ?tax on the sale or purchase of goods? in Entry 54 in List II of Seventh Schedule when read with the definition clause 29-A of Article 366 includes a tax on the transfer of property in goods whether as goods or in the form other than goods involved in the execution of works contract. (x) Article 366(29-A)(b) serves to bring transactions where essential ingredients of ?sale? defined in the Sale of Goods Act, 1930 are a....
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....ers had undertaken to build for the prospective purchaser. (v) Such construction/development was to be on payment of a price in various installments set out in the agreement. (vi) The developers were not the owners. They claimed lien on the property. They had right to terminate the agreement and dispose of the unit if a breach was committed by the purchaser. A clause like this does not mean that the agreement ceases to be ?works contract?. So long as there is no termination, the construction is for and on behalf of the purchaser and it remains a ?works contract?. (vii) If there is a termination and a particular unit is not resold but retained by the developer, there would be no works contract to that extent. (viii) If the agreem....
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....s into a contract with the flat purchaser. The value addition made to the goods transferred after the agreement is entered into with the flat purchaser can only be made chargeable to tax by the State Government. 116. The reasons stated in the referral order for reconsideration of Raheja Development1 do not make out any good ground for taking a view different from what has been taken by this Court in Raheja Development1. We are in agreement with the submission of Mr. K.N. Bhat that since Raheja Development1 in May, 2005 almost all States have modified their laws in line with Raheja Development1 and there is no justification for change in the position settled after the decision of this Court in Raheja Development. 118. We are clearly of....
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....tion of apartments/houses/flats and other construction in question. The Court held that the assessment order could not be sustained. 6. The State of UP filed Special Leave to Appeal (Civil) ..../2007 CC 11480-11481/2007 (State of UP & another vs. M/s Assotech Realty Pvt. Ltd) against the judgment dated 23.3.2007. The Supreme Court by an order dated 3.12.2007 disposed of the Special Leave to Appeal (C)....../2007 and connected Civil Appeal Nos. 5624-5625 of 2007 arising out of SLP (C) Nos.23378-79 of 2007, as follows:- "In our view thorough adjudication was required in this case. Writ petition filed in High Court by the respondent against the order of assessment was not maintainable. The respondent ought to have filed statutory appeal ....