TaxTMI 
TaxTMI 
2016 (5) TMI 497
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....ad with section 61(1) of the Bombay Sales Tax Act, 1959: "Whether on the facts and in the circumstance of the case, the Tribunal was justified in holding that the contract for construction of glass curtain walls executed by the Applicant which was awarded to it by the employers, namely, ICICI Ltd. and M/s. Wockhardt Ltd. would not constitute contracts for construction of building nor would they constitute the contracts incidental or ancillary to the contracts mentioned in paragraph 'A' of the Notification dated 8 March 2000 issued for the purposes of section 6A (1) of the Works Contract Act." 3. It is the case of the Applicant that it is a registered dealer under the Works Contract Act as well as under the Bombay Sales Tax Act. The Reference Application was filed pursuant to the order dated 9 July 2010 passed by the Tribunal in the Applicant's own case in Second Appeal No.106 of 2007 under the Works Contract Act in respect of the period 01.04.1999 to 31.03.2000 in terms of which, the Tribunal held that the contract for construction of glass walls was not construction of building contract or incidental or ancillary contract to the contract for construction of buildin....
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.... Tribunal, the Applicant preferred a Rectification Application which came to be dismissed by an order passed in February 2013. Prior thereto, on or about 9 October 2012, a search and seizure was conducted at the business premises of the Applicant and an attachment order was passed and proceedings were initiated in respect thereof, which are not really material for the purpose of deciding the present Reference. Suffice it to say that in the meanwhile assessment proceedings were completed in April 2013 and a demand of Rs. 14.17 crore (which includes penalty and interest) was made on the Applicant against which the Applicant has paid a sum of Rs. 10.21 crore and a stay was granted to recovery. 6. We have heard learned Senior Counsel for the Applicant and the learned Special Counsel for the Respondent/State. 7. Learned Senior Counsel for the Applicant submitted that the contracts entered into by the Applicant are essentially contracts for building and the Applicant would be covered by the composition scheme at the rate applicable to construction contracts in terms of the Notification issued by the Government under the Works Contract Act dated 8 March 2000 wherein "building contra....
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....he building and unless the building is constructed in a particular manner and as per specification, the curtain wall of glass cannot be constructed. The learned Senior Counsel tendered a compilation of literature and adverted to the following portions therefrom: "A Curtain wall is a nonbearing wall of glass, metal, or masonry attached to a building's exterior structural frame Encyclopedia Britannica,2014. A curtain wall is defined as thin, usually aluminum-framed wall, containing in-fills of glass, metal panels, or thin stone. The framing is attached to the building structure and does not carry the floor or roof loads of the building. The wind and gravity loads of the certain wall are transferred to the building structure,typically at the floor line Building Envelope Design Guide- Curtain Walls by Nik Vigener, PE and Mark A. Brown, Revised by the Chairs of the Building Enclosure Councils with assistance from Richard Keleher and Rob Kistler. The Facade Group, LLC.Development and review supported through a grant from the American Architectural Manufacturers Association.. The term curtain wall is defined in most literature to be any building wall of any material ....
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....nstruction of buildings, roads, buildings, runways, etc. These contracts are illustrative in nature. The contracts for 'construction of building' are required to be construed strictly and not liberally since the provision contained in section 6A of Works Contract Act are meant for composition of tax at a lesser rate, thereby the Applicant gets exemption to certain extent and the Notification dated 8 March 2000 has to be construed strictly. The learned Special Counsel submitted that the word 'building' is not defined in the Act and has to be construed in its ordinary grammatical sense. She has placed reliance on the following judgments: (i) Ghansyamdas vs. Deviprasad & Anr, AIR 1966 SC 1998 (ii) Mohammad Umar Anr. vs. Fayazoddin, AIR 1924 Lah. 172. 11. We have considered the rival contentions and perused the material on record. At the outset, it would be necessary to reproduce the extract of the Notification dated 8 March 2000. It reads as under: "Notification No.WCA-25.00/C.R.-39/Taxation-1 dated the 8 th March, 2000. In exercise of the powers conferred by sub-section (1) of Section 6A of the Maharashtra Sales Tax on the Transfer of Proper....
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....he Applicant's case was that it had undertaken the contract of fabrication and erection of structural glazing works and the work of aluminum glazing contract would qualify as a construction contract made for building liable to composition rate of tax. Being aggrieved by the Assessment Order passed by the Sales Tax Officer, the Applicant had filed an Appeal before the Deputy Sales Tax Commissioner (Appeals) and in the order dated 1 November 2006, the Commissioner of Sales Tax (Appeals) has recorded that the Applicant contended that "he is a dealer dealing in structural glazing aluminum cladding, doors and windows and doors of buildings in Corporate Offices." 13. We have perused the Additional Paperbook Compilation produced by the Applicant, to which are annexed what is stated to be the contract with ICICI and contract with Wakhardt. It cannot be disputed that the essential raw materials like glass and aluminum for the work of structural glazing are procured by the Appellant from third parties. In one of the letters at page No.143 of the Compilation it is stated that "the procurement of glass, double sided tapes and structural silicone sealants will also be undertaken overseas". I....
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....lass with soft coat and heat strengthed glass of approved make and shade for outside and 6 mm thick plain clear Modi/Asahi float glass for inside. For spandrel area, 8mm/6mm. heat reflective glass with soft coat and heat strengthened may be provided with opacifaer film and 50mm thick insulation. Some portion of spandrel area is provided with Alucobond/Reynobond composite aluminium panels with PVF2 painting on a aluminium framework as shown in elevations. Some area is also provided with granite panels supported on aluminium framework as shown in elevations. All wastage and breakage will be borne by the Contractor. Double glazing by unitised system will be factory made and sealed properly. The fixing will be done with imported structural silicon sealant and guarantee the proper bond and water tightness. Contractor will clearly state in his tender letter the detailed methodology to be adopted for procurement, fabrication and erection of structural glazing. 11. The Contract will be awarded jointly to Indian contractor and foreign collaborator. The design and system, procurement of aluminium sections and glazing, method of fixing, water tightness completing the work in time and....
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....ed structural glazings are transported to the work site where they are erected on to the building." ... ... ... "The words "fabrication, erection and structure" are not defined under the Act and therefore they will assume the general meaning. The contract entered by the applicant comprises i) fabrication, means framing, constructing, manufacturing etc. ii) erection means construction by assembling parts or fixing something in upright position, iii) structure means, something which is constructed, such as building." ... ... ... "The process involves fabrication and assembly of specially designed extruded powder coated aluminium sections into a frame on which glazed panels are bounded. These structures are then erected onto the building." 17. The fabricated structural glazings prepared by the Applicant are transported to the site by the Applicant and affixed on the exterior portion of the building, which building is constructed by the building contractor who is a third party. There is no dispute that Applicant is not a building contractor, in that, it is not in the business of construction and erection of buildings. The activity of affixing glass and erecting gla....