TaxTMI 
TaxTMI 
2017 (5) TMI 734
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....he State are impleaded as respondents for they are discharging duties and exercising powers conferred upon them vide the Maharashtra Value Added Tax Act, 2002 (for short "MVAT Act"). 3. On 3rd May, 2016, the Maharashtra Sales Tax Tribunal at Mumbai (for short "the Tribunal") decided VAT Second Appeal No.335 of 2015. That Second Appeal was directed against an order dated 29th May, 2015, of the Deputy Commissioner of Sales Tax (Appeals) - III, Mazgaon, Mumbai. That appeal, in turn, arose out of an order of assessment passed by the Assistant Commissioner of Sales Tax (INV-07), Investigation-A, Mumbai, for the Financial Year 2006-07. 4. The Tribunal has, by the impugned order, partly allowed the appeal and in the following terms: "Hence, we pass the following order - ORDER VAT Second Appeal No.335 of 2015 is partly allowed. The order passed by the appellate authority stands confirmed but for determination of tax liability, the order is modified as under -Appellate authority to rework out tax on the basis of the observations made i.e. appellate authority to obtain the value of the entire contract on the basis of the value of the tenements that would have fetched as on the....
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....connected or ancillary to this issue. It would not make any difference whether the appellant-dealer traces the history of availability and receipt of this TDR during the course of the slum rehabilitation projects for being utilised for construction of buildings. It is submitted by Mr. Sridharan that what is really decided and by the Tribunal is the legality and validity of a tax styled as value added tax imposed on the dealer when he undertakes a project for the SRA. That project is of construction of building so as to rehabilitate the slum dwellers who have encroached upon and taken over a property reserved for a public purpose or a private land. Such slum dwellers have to be evicted from the site. However, it is not always and humanly possible to evict such slum dwellers and moved by their plight, a welfare State has, with the assistance of private entrepreneurs, conceived a project of rehabilitation of such slum dwellers at the very site by making available decent housing accommodation to them free of cost. That housing accommodation is provided at the cost of a private developer and to reimburse him of such cost of construction and provision of basic amenities, the private deve....
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....n directing to compute tax as per market price based on Ready Reckoner under Stamp Duty Act without opportunity of hearing to appellant? (4) On the facts and circumstances of the case, when under MVAT Act, 2002, no statutory method for converting consideration received in other then money form, in money form, is provided, whether Tribunal is legally correct in directing to compute tax liability based on market value, taking ready reckoner under Stamp Duty Act as basis ? (5) Whether Tribunal is justified in confirming interest u/s 30(1) of MVAT Act, 2002, when appellant deserves waiver/reduction/remission or cancellation of interest on the facts and circumstances of the case ?" 11. The facts necessary for disposal of this appeal are set out as under: (i) A D Sheth HUF (Owner), was the owner of land approximately admeasuring 3,23,538.73 Sq. Mtrs. The said plot of land was given on lease to various quarry operators and was also encroached upon by the slum dwellers. (ii) The owner entered into an agreement dated 31.07.1998 with M/s. Sumer Corporation (Developers) -petitioners herein, agreeing to grant the development rights in respect of the property admeasuring approxim....
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....ne. (x) The petitioner was required to construct and hand over free of cost to the SRA about 11,900 tenements each comprising of 225 square feet carpet area for rehabilitation of the Slum Dwellers covered by the "Slum Rehabilitation Proposal". (xi) In lieu thereof SRA will give benefits of transfer of development right after receiving the certificates from the Architect, Structural Engineer & Site Supervisor in prescribed formats as in DCR 1991 of the work carried out by the petitioner and cause to issue Development Rights Certificate to the petitioner under the regulations for the grant of TDR under Appendix VII-B of the Development Control Regulations. (xii) On the same date i.e. on 01.12.2003, a third conveyance agreement was entered into between SRA, petitioners (as confirming party) and the owner for conveying the Land Parcel - III admeasuring 20,512.50 square meters to SRA in consideration of SRA agreeing to provide TDR to Petitioners (for short, Land TDR for land Parcel - III). (xiii) After conveying the above three Land Parcels to SRA, the petitioners were granted TDR called as Land TDR as per the SRA Proposal. (xiv) Further, as and when the construction work....
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....he MVAT Act. Mr. Sridharan would submit that section 2 clause (24) of the MVAT Act in the first part contains a substantive definition and, by the explanation, sets outs various acts which, according to the Tribunal, would amount to a sale. Rather, the explanation ends by stating that whatever has been set out in clauses (a) and (b) with their sub-clauses shall be deemed to be a sale and attracting clause (24) of section 2 of the MVAT Act. Mr. Sridharan submits that in the present case, we are concerned with section 2(24) and the explanation clause (b)(ii) of the MVAT Act, 2002. Mr. Sridharan would submit that what is dealt with by this sub-clause is a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, including an agreement for carrying out for cash, deferred payment or other valuable consideration, the works covered by this sub-clause. Mr. Sridharan would submit that the present activity and exercise would never fall within this definition. Mr. Sridharan, therefore, submits that the Tribunal has devised a novel method to compute the amount of consideration. It evolves a formula and holds that the one devised by th....
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....lour from the preceding words 'cash', 'deferred payment' and which can only mean some other monetary payment. 17. Mr. Sridharan in that regard relies upon Entry 54 of List II, Seventh Schedule to the Constitution of India. Mr. Sridharan would submit that if the words are not understood in such a narrow or restricted sense and as explained in the Constitution Bench decision of the Hon'ble Supreme Court in the case of M/s. Devi Dass Gopala Krishnan & Ors. vs. State of Punjab & Ors. (22) Sales Tax Cases, Pg. 430, then, they would be ultra vires Entry 54 of List II of the Seventh Schedule of the Constitution of India. Mr. Sridharan would submit that the Hon'ble Supreme Court read down these words so as to make the whole provision falling for its consideration intra vires Entry 54. 18 Mr. Sridharan then relies upon the concept of ejusdem generis and would submit that the Hon'ble Supreme Court's judgment in Devi Dass (supra) binds us completely. The Supreme Court had clearly held in this case that the term "other valuable consideration" has been used in various sales tax laws. It has never been argued or decided that the said expression mentions anythin....
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....tion of the Revenue is accepted, it will result in two different meanings of the same term "other valuable consideration" in different clauses of the same sub-section. That is impermissible in law. Mr. Sridharan then submits that reliance on a decision by the Revenue in the case of Dhampur Sugar Mills vs. Commissioner of Trade Tax, U.P. (2006) 5 SCC 624, is misplaced. Mr. Sridharan then submits that even the MVAT Act does not prescribe any machinery when the consideration is in kind. 25. Therefore, we should never place an interpretation which would introduce something as a levy when the legislature never intended to lay down any procedure or machinery for assessing the same. Mr. Sridharan has also contended that the entire sub-clause (ii) of clause (b) should not be read in isolation. The entire section has to be read as a whole. So read, it would indicate as to how the legislature never intended to bring in by an explanation, something which is not a sale. The sale as ordinarily understood would, therefore, be the governing test. Mr. Sridharan then relies upon the wording of this sub-clause prior to its amendment and post its amendment on 20th June, 2006. Mr. Sridharan also in....
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....ndia (P) Limited vs. State of Uttar Pradesh & Ors. (2008) 4 SCC 548 / (2007) 7 VST 482 (S.C.) (12) H.H. Sri Rama Verma vs. Commissioner of Income Tax, Ernakulum, 1991 Supp (1) SCC 209. (13) M. Jaihind vs. State of Kerala (1998) 111 STC 374 (Ker.) (14) Sree Gajanana Motor Transport Co. Ltd. vs. State of Karnataka & Ors. (1977) 1 SCC 37. 28. There is an affidavit-in-reply to the Writ Petition by the Joint Commissioner of Sales Tax. 29. Consistent with the stand taken in this affidavit, it is urged by Ms. Jeejeebhoy, learned special counsel, that there is not merit in the challenge raised by the petitioners. She would submit that the petitioner-appellant has admittedly entered into a works contract with the SRA and, therefore, there is a deemed sale of the goods involved in the execution of a works contract. This is the broad heading of her first submission. 30. The second submission and broadly stated is that the DRCs received by the petitioner-appellant are money consideration. The third submission is that the consideration for a works contract may be something other than money. She has also contended that a machinery is provided by the statute and all such provisi....
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....that the petitioner entered into two separate and distinct transactions - One by which there was a transfer of the land to the SRA and one for construction on the land so transferred. The Petitioner's agreement to construct was, therefore, a classic works contract where SRA was the owner of the land and the work was being carried out for the owner. The transaction between the Petitioner and the SRA whereby the Petitioner was to construct tenements and hand them to the SRA squarely falls within the definition of works contract. Even assuming the transaction was one for works and transfer of land, such a transaction would nevertheless be a works contract. 34. It is then contended that in the present case the deemed sale of goods used in the works contract has, in fact, taken place for money consideration. She would submit that it has been recognised by the Courts in India that payment for an ordinary sale may be by way of a commodity or goods that is easily convertible into money in the hands of the vendor. The DRC received by the petitioner-appellant under its works contract with the SRA can be easily converted into money in the hands of the petitioner-appellant. In fact, in ....
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....deration. Significantly, in Dhampur Sugar Mills case, the price for molasses was determined by the central Government (see para 23). Similarly, in Premier Electro Mechanical Fabricators v. State of Tamil Nadu, (1982) SCC Online Mad 345, a Division Bench of the Madras High Court held that shares given as payment for machinery were valuable consideration akin to cash payment or deferred payment to make the transfer a sale. Applying the principle laid down in these decisions to the provisions of the MRTP Act, the TDR (given in the form of DRCs) is in effect and substance monetary consideration as it is an arrangement whereby the price of the land or construction/works to be carried out is adjusted against TDR given to the person with whom the Authority has entered into an agreement. The owner or works contractor could have independently purchased TDR in the market using the money received from the Authority for the land/construction as the case may be. Instead, the TDR has been given in lieu of the money. (b) In any event, even the cases relied on by Petitioner hold that the expression "valuable consideration" when interpreted ejusdem generis means "cheques, bills of exchange an....
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....ffect to it" [Builders Association v Union of India, (1989) 2 SCC 645 at para 36-9 (Petitioner's compilation, Vol II, pg 1). Therefore, the DRCs which are deemed negotiable instruments in law ought to be treated on par with other negotiable instruments that constitute money consideration for an ordinary sale. (f) The Petitioner's contention that the State cannot declare the DRCs to be negotiable instruments is erroneous and cannot be raised in these proceedings for the following reasons: a. The Petitioner has not challenged the deeming fiction in the DC Regulations as being beyond the legislative competence; b. The Constitution does not provide that only the Union Government has power to legislate in respect of "negotiable instruments"; c. The Negotiable Instruments Act, 1881 ("the NI Act") is not exhaustive of all types of negotiable instruments. This is evident from the Preamble to the NI Act, which states as follows: "WHEREAS it is expedient to define and amend the law relating to promissory notes, bills of exchange and cheques; It is hereby enacted as follows:- d. The Law Commission of India Eleventh Report (on the NI Act)....
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....y of the DRCs received by the Petitioner [see, for example, clause 10(vi) of the Articles of Agreement dated 1 December, 2003 which stipulates that "(iv) The Developer will be entitled to transfer or assign the FSI, TDR and / or DRC which may become available to the Developer under this Agreement as the Developer may desire without reference or recourse to or consent or concurrence of the SRA."] (h) The Impugned Order therefore correctly holds the DRCs have an inherent value and are treated and dealt with as negotiable instruments [See para 22 at page 43 of Appeal]. (i) The petitioner accepts that the Development Rights Certificates ("DRCs") have been issued as consideration but contends that even where there is a works contract, there should be monetary consideration against the transfer of ownership in goods, failing which no tax can be levied. The Petitioner relies on the decision of the Supreme Court in Devi Dass Gopala Krishan v. State of Punjab, 1967 (20) STC 430 (SC) (Petitioner's Compilation, vol. I, page 1) in support of this contention and states that the Rule of ejusdem generis must be applied to the term valuable consideration even qua a works contract. Howeve....
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....e cornerstone for the subsequent decisions of Indian Courts which considered the necessary ingredients of the expression "sale of goods" for the purpose of levy of tax. The Petitioner has placed heavy reliance on one such decision, viz. Devi Das Gopal Krishan v. State of Punjab, AIR 1967 Sc 1895, in which the Hon'ble Supreme Court has referred to and relied on the decision in State of Madras v. Gannon Dunkerley, supra, and has then interpreted the expression "valuable consideration" in the context of sales tax law to mean "some other monetary payment in the nature of cash or deferred payment." (m) In order to overcome the restrictive meaning of tax on the sale or purchase of goods, as interpreted by the Hon'ble Supreme Court, Article 366(29A) was inserted in the Constitution by Constitution (Forty-sixth Amendment) Act, 1982. ..... Notably, Article 366(29A) does not prescribe that the transfer of property in goods involved in the execution of a works contract is to be for "cash deferred payment or valuable consideration ". ..... (n) After the decision of the Supreme Court in Builders Association case, supra (Petitioner's compilation, Vol II, pg 1), the Mahara....
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....to the 46th Constitutional amendment have been deemed to be sales for the purpose of the MVAT Act. ..... (p) Clause (b)(ii) of the Explanation to Section 2(24) of the MVAT Act refers to works contracts as including certain specified contracts. This clause in the MVAT Act was initially in pari materia with Article 366(29A)(b). Admittedly, Article 366(29A) of the constitution is extremely broad and covers all types of works contracts. (q) Clause (b)(ii) in the MVAT Act was amended after the decision of the Supreme Court in K. Raheja Dvelopment Corporation v. State of Karnataka, (2005) 5 SCC 162 (Petitioner's Compilation, Vol. VI, page 1). It is noteworthy that the clause was first amended by Maharashtra Act No. 32 of 2006 (Petitioner's Compilation, Vol. I, page 11). (r) Subsequently, the word "means" was retrospectively replaced by Maharashtra Act No. 25 of 2007 (Petitioner's compilation, Vol. VI, page 17) with the word "including". The fact that the Legislature modified the word "means" to "including" clearly indicates that the intent of the amendment was to clarify that a works contract is much wider than an agreement for carrying out for cash, deferred paym....
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....t or other valuable consideration but does not include a mortgage, hypothecation, charge or pledge". By reason of the deeming fiction in the Explanation, each of the entries in clause (b) is deemed to be a sale thereby expanding the meaning of "sale". (x) The petitioner's contention that an Explanation cannot go beyond the main section is incorrect, contrary to law and contrary to the clear legislative intent expressed in the MVAT Act. In Government of Andhra Pradesh v. Corporation Bank, (2007) 9 SCC 55 at para 10-14 (a copy of which is Annexure B hereto), the Supreme Court has set out the manner in which an Explanation is to be interpreted. It is clear from this decision that an Explanation may widen the scope of the main section and that a deeming provision is generally intended to enlarge the meaning of the particular word or to include matters which otherwise may not fall within the main provision. In the present case, the Explanation to Section 2(24) of the MVAT Act is clearly and unambiguously a deeming provision which enlarges the meaning of "sale" beyond that in the main section. (y) Therefore, when reading clause 2(24), the meaning of sale is enlarged so as to ta....
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.... purposes of or consequential to his engagement in or, in connection with or incidental to or in the course of, his business buys or sells, goods in the State whether for commission, remuneration or otherwise and includes...." Therefore, the consideration that may be received or given by a "dealer" is once again not restricted to "cash, deferred payment or other valuable consideration". (cc) The Petitioner's apprehension that the Respondent's interpretation of Section 2(24) will result in sales outside the State being taxed is misplaced when the MVAT Act is read as a whole. Illustratively, Section 8 of the MVAT Act expressly clarifies as follows: "(1) Nothing in this Act or the rules or the notifications shall be deemed to impose or authorise the imposition of a tax or deduction of tax at source on any sale or purchase of any goods, where such sale or purchase takes place, - (a) (i) outside the State; or (ii) in the course of the import of the goods into the territory of India, or the export of the goods out of such territory, or (b) in the course of inter-State trade or commerce, and the provisions of this Act and the said rules and notific....
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....ary consideration. Pursuant to the 46th Constitutional Amendment, the State legislatures are empowered to levy tax on transactions enumerated in Article 366(29A) even though such transactions do not have all the ingredients necessary for a sale of goods. In the case of a works contract, this is expressly made clear by the decision of the Hon'ble Supreme Court in M/s Larsen & Toubro Ltd. v. State of Karnataka, (2014) 1 SCC 708 at para 97 (Petitioner's Compilation, vol. III, page 65)...... 35. It is in the light of the above that it is submitted by Ms. Jeejeebhoy that the machinery provided in terms of Rule 58 of the MVAT Rules for determining the tax payable on the value of the goods involved in the execution of a works contract ought to be made workable. In the present case, it makes the whole scheme workable and lends a proper meaning to the charging section. Pertinently, this rule uses the word 'value'. It does not speak of 'cash', 'deferred payment' or 'valuable consideration' when referring to the goods or the entire contract. In such circumstances, it would mean that the intention of the legislature was to tax all kinds of works contr....
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....90 SCC Online Gau. 148. (6) V.P. Vadivel Achari vs. The Madras Sales Tax, Order dated 28th October, 1968 in WP Nos.1462 to 1466 of 1967. (7) Premier Electro Mechanical Fabricators vs. The State of Tamil Nadu, 1982, SCC Online Mad 345. (8) Manish Dinesh Soni & Ors. vs. State of Maharashtra & Ors., 2016 (6) Bom. C.R. 162. (9) Naiknavare & Associates, Pune vs. State of Maharashtra & Anr., 2008 (5) Mh. L.J. (10) Commissioner of Income Tax III vs. Calcutta Knitwears, Ludhiana, (2014) 6 SCC 444. (11) Gurbachan Singh & Anr. vs. Shivalak Rubber Industries & Ors. (1996) 2 SCC 626. 37. For properly appreciating these contentions a reference will have to be made to some basic and undisputed facts. 38. There is no dispute that there was an agreement and that agreement, copy of which has been annexed as Exhibit-I to the writ petition, is styled as a Deed of Conveyance. It is between a Hindu Undivided Family. That is styled as Sheth HUF. They are referred as the owners. They are the parties of the First Part. Then, the petitioners M/s. Sumer Corporation are referred as Confirming Party and finally the SRA is styled and referred as a third party. The owners absolutely own ....
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....ng to provide or cause to be provided Slum Transferable Development Rights (TDR) by way of recommending to the Municipal Corporation of Greater Mumbai to issue a Development Right Certificate for the land, more particularly described in the Schedule, excluding land admeasuring 1025.62 square meters under five percent amenity open space as defined in the DCR as per the separate terms under the agreement dated 1st December, 2003, simultaneously executed between the parties. At the behest of SRA and in lieu of grant of Slum TDR, the owner has agreed to cause the conveyance in respect of the said property, more particularly described in the Fifth Schedule in favour of the SRA. Then, there are the usual and ordinary recitals and stipulations. It is, therefore, apparent that this Deed of Conveyance and which is signed by all the three parties enabled the petitioners to execute the impugned agreement/transaction with SRA whereby it was agreed that the petitioner would convey lands to SRA, more particularly described therein along with handing over free of cost constructed tenements for rehabilitation of slum dwellers affected by vital public purpose projects. Based upon the two documents ....
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....ciation or body of persons incorporated or not, to a member thereof for cash, deferred payment or other valuable consideration; (vi) the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is made or given for cash, deferred payment or other valuable consideration : shall be deemed to be a sale." 41. Before we analyse this definition it would be advantageous to refer to the scheme of the Act itself. The Act, as is apparent from its preamble, is enacted to consolidate and amend the laws relating to the levy and collection of tax on the sale and purchase of certain goods in the State of Maharashtra. Chapter I of the Act contains the preliminary provisions. Chapter II deals with the incidence and levy of tax. Chapter III deals with sales tax authorities and tribunals, whereas Chapter IV provides for registration. The returns and assessment etc are governed by Chapter V, whereas penalty and interest are set out in Chapter VI. The payment of tax and recovery is dealt with by Chapter VII and contains sections 31 to 47. C....
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....ncern. Explanation : For the purpose of this clause,- (i) the activity of raising of man-made forest or rearing of seedlings or plants shall be deemed to be business ; (ii) any transaction of sale or purchase of capital assets pertaining to such service, trade, commerce, manufacture, adventure or concern shall be deemed to be a transaction comprised in business; (iii) sale or purchase of any goods, the price of which would be credited or, as the case may be, debited in the profit and loss account of the business under the double entry system of accounting shall be deemed to be a transaction comprised in business; (iv) any transaction in connection with the commencement or closure of business shall be deemed to be a transaction comprised in business ;" 43. The word "capital asset" is defined in section 2 clause (5), the word "Commissioner" is defined in clause (6) of section 2, whereas the term "dealer" is defined in section 2 clause (8) and reads as under : "2. In this Act, unless the context otherwise requires.- ... ... ... (8) "dealer" means any person who, for the purpose of or consequential to his engagement in or, in connectio....
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....ransport Corporation Act, 1950 (LXIV of 1950); (ix) Shipping and construction companies, Air Transport Companies, Airlines and Advertising Agencies; (x) any other corporation, company, body or authority owned or constituted by, or subject to administrative control, of the Central Government, any State Government or any local authority: * * * * Exception I.- An agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally, shall not be deemed to be a dealer within the meaning of this clause. Exception II.- An educational institution carrying on the activity of manufacturing, buying or selling goods, in the performance of its functions for achieving its objects, shall not be deemed to be a dealer within the meaning of this clause. Exception III.- A transporter holding permit for transport vehicles (including cranes) granted under the Motor Vehicles Act, 1988 (5 of 1988), which are used or adopted to be used for hire or reward shall not be deemed to be a dealer within the meaning of this clause in respect of sale or purchase of such transport vehicles or parts, components or accessories thereof." 44. Therefore, a perusal of th....
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....han in pursuance of a contract, for cash, deferred payment or other valuable consideration. For our purpose we have to see whether transfer of property in goods or in some other form involved in the execution of a works contract and which includes an agreement for carrying out for cash, deferred payment or other valuable consideration the works set out in subclause (ii) of clause (b) and all the other sub-clauses, namely, delivery of goods on hire purchase, the transfer of right to use any goods for any purpose, the supply of goods by any association of a body of persons etc and supply by way of or part of any service. Each of these are deemed to be a sale. Therefore, a transfer of property in goods whether as goods or in some other form involved in the execution of a works contract, including the works specified in an agreement for carrying out for cash, deferred payment or other valuable consideration and enumerated in sub-clauses of clause (b) are deemed to be a sale. The sale price means the amount of valuable consideration paid or payable to a dealer for any sale entered, including any sum charged for anything done by the owner in respect of the goods at the time of or before ....
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....ly measurable detriment on the other. It is a consideration which the law regards as an equivalent as money, goods, lands, services on marriage. It is also explained in a decision of the Patna High Court reported in AIR 1955 Patna 458. In the sense of law, it may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility, given suffered or undertaken by the other. Thus, if TDR is pecuniarily measurable benefit, then, concededly, it can be brought to tax under the MVAT Act, 2002. 48. We need not go into a very wide controversy and generated by the arguments canvassed on behalf of the dealer / appellant-petitioner and the Revenue-respondents before us. That is already outlined. Mr. Sridharan would urge that the expression "or other valuable consideration" and as found in clause (ii) of sub-clause (b) clause (24) of section 2 to mean necessarily in money. Ms. Jeejeebhoy, on the other hand, would contend that it does not have to be so and it could be anything other than money. 49. For our purpose and this matter, it is not necessary to enter into this controversy. Even if we agree with Mr. Sridharan ....
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....aterial recitals would indicate that on 13th June, 2002, the petitioner-appellant has submitted a rehabilitation proposal for slum dwellers on the said larger property to the SRA for approval as slum rehabilitation project under clause 3.11 read with clause 3.19 of the DCR No.33(10) as notified by Government Notification dated 15th October, 1997. The SRA is empowered to take over lands along with constructed tenements for the purpose of creating housing stock so as to enable rehabilitation of slum dwellers affected by vital public purpose projects. Then, there is a reference made to an agreement dated 24th January, 2003, executed by the SRA of the one part and the developer (appellant before us) of the other part under which it was agreed that the developer would convey lands more particular described in the schedule of agreement to the SRA along with handing over free of cost constructed tenements to SRA for rehabilitation of slum dealers affected by any vital public project and in exchange thereof the SRA agrees and undertakes to give or cause to be given, transferable development rights (TDR) and development right certificate (DRC) to the developer through the Municipal Corporat....
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.... 52. A perusal of this clause and the further clauses would leave us in no manner of doubt that the developer will be entitled to transfer or assign the TDR and/or DRC which may become available to him under this agreement as the developer may desire, without reference or recourse to or consent and concurrence of the SRA. If the very concept is understood as generating a right in favour of the developer-appellant which can be transferred for money in the open market, then, it is evident that both this agreement and also the Deed of Conveyance separately executed enable the petitioner-developer to earn consideration in the form of money. If this is a transferable property and commanding a price in the market, then, on the own showing of the petitioner-appellant, there is a money component clearly involved. The other valuable consideration for which the works are to be carried out under the works contract and which involves transfer of property in goods, therefore, is nothing but money. 53. Ms. Jeejeebhoy is right in relying upon the averments in the Writ Petition which denote that the TDR is a transferable document in the form of DRC. It can be sold in the open market for a pr....
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.... Appendix-VII. However, as per the provision of regulation 15 of Appendix VII, the owner shall be insisted to pay pro-rata charges for cost of construction of compound wall instead of retaining wall: Provided that when Proposed Nalla/Nalla Widening/ Training and appurtenant service road thereto is passing through the lands affected by any other reservations of the Development Plan, then TDR of the land can be granted only once either for D. P. reservation or deemed reservation mentioned above for nalla etc. Efforts shall be made to cover/to train the nalla suitably so that the said land can be used for its intended purpose as proposed in the Development Plan. However, if such covering of nalla is not feasible/viable then the nalla and appurtenant service road shall be developed as per requirement and the said other reservation of the Development Plan affecting the said land shall be deemed to be deleted/modified to that extent." 55. We have also before us the Appendix VII and Appendix VII-B and prior thereto, Appendix VII-A. However, Appendix VII, which is referable to Regulation 34 and which would have to be read together with other regulations would indicate that it is prov....
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....ch is being considered by us. Therefore, any broader aspects are immaterial and irrelevant. So long as the TDR is understood by law to be equivalent to cash compensation and which can be dealt with in the market for a price as it is able to command, then, the tax liability can be clearly computed and by recourse to the machinery provisions contained in the MVAT Act. It is not as if this transaction has no component of or does not involve money at all. The agreements, read as a whole and harmoniously would denote as to how in discharge of the obligation, the developerpetitioner has derived benefits. This is nothing but other valuable consideration capable of being computed in terms of money. If the DRC / TDR commands a price in the market, then, on the strength of that prevailing price in the market, the tax liability can be computed. That can be derived from application of the machinery provisions and the formula envisaged therein. There is absolutely no confusion or complication if the transaction is approached and understood in this manner. 57. Once this view is taken, then, it is evident that we have not deviated from the principle of law pressed into service by Mr. Sridharan....
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.... under : "15 A DRC shall be issued by the Commissioner himself as a certificate printed on bond paper in an appropriate form prescribed by the Commissioner. Such a certificate shall be a transferable / negotiable instrument after due authentication by the Commissioner." 63. A perusal of the same would indicate that the certificate shall be a transferable /negotiable instrument after due authentication by the Commissioner. Her further argument is that there is a separation of development potential of land from a land which is under acquisition. That is a well recognized concept. In that regard the reliance placed by her on the decision noted in paragraph 17 of her written submissions is accurate. She has rightly relied upon section 126 of the MRTP Act and the DC Regulations to the extent relevant, namely, to contend that even what is derived by the petitioner-appellant is capable of being transferred for money. That the DRCs are valuable is not in dispute at all. 64. Finally, we find that her reliance on the decision of the Hon'ble Supreme Court reported in AIR 1966 SC 193 Chidambara Iyer & Ors vs. P.S. Renga Iyer & Ors. is also accurate. The Hon'ble Supreme Court i....