2011 (8) TMI 998

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....Tax Act, 2003 (for short, hereinafter referred to as "the Act") as the purchases made by the assessee is purely for their own construction of flats which are exempt from tax. 2. The assessee is a private limited company engaged in the business of civil works contract and are also developers of properties. The assessee is registered under the provisions of the Act. The assessee is also registered as dealer engaged in "works contract". The assessee has purchased goods for execution of civil contract of their own properties from unregistered dealers. The assessee did not pay purchase tax and accordingly did not claim input-tax credit, on the ground that input-tax credit is not available on goods used for own consumption. The assessee conten....

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....in appeal. 4. The learned Government Advocate, assailing the impugned order of the Tribunal, contended that the assessee is a private limited company engaged in the business of civil works contract and are also developers of properties. In other words, they undertake works contract and also develop properties on their own. They are registered under the Act in both the categories. Even if the assessee purchases building materials from unregistered dealers for the purpose of putting up their own construction, the construction to be put up by them is in the course of their business as developers and therefore, section 3(2) of the Act is attracted. The Tribunal has not viewed this aspect from a proper angle and has come to a wrong conclusion....

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....ealer purchases taxable goods from a person who is not registered under the Act, and uses it for his own consumption personally, then there is no liability to pay tax under sub-section (2). But once he uses those taxable goods in the course of his business, he is liable to pay tax which is known as purchase tax. In fact, this court had an occasion to consider the aforesaid question in the case of Concorde Hitech City (P) Limited v. State of Karnataka [2011] 39 VST 52 (Karn) in S.T.A. No. 27 of 2009 disposed off on July 16, 2010, where it was held as under (pages 57 and 58 in 39 VST): "Sub-section (1) of section 3 expressly provides that, every sale of goods in the State by a registered dealer or a dealer liable to be registered attracts ....