TaxTMI 
TaxTMI 
2011 (2) TMI 1324
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....hereinafter called, "the Act"). We have heard counsel appearing for the appellants and Special Government Pleader appearing for the respondents. Both the appellants are property developers who under an agreement with land owners agreed to develop the land, earmark the same into plots, construct villas or multi-story apartments for sale to various customers. After entering into agreement with the land owners, the appellants contracted with various customers for construction and sale of the flats. The appellants have been paying sales tax on works contract under section 6(l)(e) and (f) of the Act which provides for tax on transfer of goods involved in the execution of works contract. However, during the year 2007 amendments were introduced t....
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....ur per cent of the value of the land and building sold. The validity of the amendment to the Stamp Act was challenged in this court by several parties and this court vide judgment dated August 28, 2009 in W. P. (C) No. 17794 of 2007(R) (Kerala Builders Forum v. State of Kerala and connected cases) dismissed the challenge. So far as the appellants are concerned, they have been paying VAT on the construction made by them which is admittedly in the form of works contract. However, based on the judgment of this court rendered in the stamp duty cases, the appellants filed application for clarification before the prescribed authority constituted under the Act for clarifying that they are not liable to pay VAT because of their liability to pay fu....
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....o pay stamp duty on various transactions. The purpose of the amendment to the Stamp Act is to levy stamp duty on the value of the land or the undivided right in land together with cost of the building. Even though full stamp duty is payable at the time of entering into agreement itself, the rigor of this provision is got over by providing rebate of stamp duty paid on agreement while paying stamp duty on conveyance, i.e., when final sale deed is executed. The appellants mainly relied on SRO No. 676/2007 and the observations of this court in support of their contention that tax under the KVAT Act is not payable when full stamp duty is payable for the transaction. For considering this, we have to necessarily refer to the scope of the notificat....
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....whatsoever) of any immovable property and the beneficiaries of the flats/apartments. This order is intended to achieve the above object. (G. O. (Ms.) No. 176/2007/TD dated August 4, 2007 in K. G. Ext. No. 1461 dated August 4, 2007.)" The Special Government Pleader submitted that the above notification has no relevance under the KVAT Act because it is issued under section 9 (1)(a) of the Stamp Act, by which Government is authorised to reduce or exempt stamp duty. Counsel for the appellants raised a contention that by virtue of the above notification if full stamp duty, is payable for the value of the land or the value of the undivided right in land and the building, then there is no need to pay any sales tax at all. The ....
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....e agreements were executed as in the case of the appellants prior to amendment of Stamp Act, there is no practical difficulty and it is for the builders and the appellants to pay sales tax regularly under the VAT Act in terms of the provisions of the statute and then to claim so much of the tax paid as a rebate on stamp duty at the time of execution of sale deed. In other words, the purchasers will be liable to pay stamp duty after excluding the sales tax recovered from them and remitted by the builders like the appellants. So far as agreements executed after the amendment to the Stamp Act came into force, whereunder parties have paid full stamp duty on agreements including the value of the land or undivided right in land and also the build....