2015 (4) TMI 570

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....contractor as per the said agreement was Rs. 5,71,77,732/-. By virtue of Ext.P2 agreement, the entire work that had to be executed as part of the works contract was sub contracted to the sub contractor and, therefore, no portion of the work was executed by the petitioner. By Ext.P3 letter, the petitioner approached the 1st respondent for the issuance of a liability certificate in Form 20B of the Kerala Value Added Tax Rules. This certificate was required to enable the petitioner to get release of an amount of Rs. 45,92,762.90 from the awarder. The amount represented the profit of the petitioner from the transaction and the certificate was required to show that the petitioner has discharged his tax liability, if any, to the Department in res....

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....1st respondent to refund the amount of Rs. 5,79,836/- that was collected from him by way of tax on the profit amount that was derived by him. 2. A counter affidavit has been filed on behalf of the 1st respondent wherein it is stated that the petitioner had obtained a Form 20B certificate from the respondent in respect of the amount of Rs. 45,92,762.90. It is pointed out that while seeking a Form 20B certificate, the petitioner had indicated that the amount of Rs. 45,92,762.90 represented the cost of establishment charges and profit for supplying labour and services. This, according to the respondent, was not a permissible deduction under Rule 10(2)(a) of the Kerala Value Added Tax Act, 2005. It is also submitted that on account of Circul....

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....he contractee. This reasons is based on the principle of accretion of property in goods. It is subject to the contract to the contrary. Thus, in our view, in such a case the work executed by a sub-contractor, results in a single transaction and not multiple transactions. This reasoning is also borne out by section 4(7) which refers to value of goods at the time of incorporation in the works executed. In our view, if the argument of the Department is to be accepted it would result in plurality of deemed sales which would be contrary to article 366(29A)(b) of the Constitution as held by the impugned judgment of the High Court. Moreover, it may result in double taxation which may make the said 2005 Act vulnerable to challenge as violative of a....