TaxTMI 
TaxTMI 
2019 (12) TMI 804
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....010-11 and consequential notice dated 19.03.2019 issued by respondent no.3. 3. Facts in brief are that petitioner is in the business of construction of road and bridges and is registered under the provisions of the VAT Act, 2008. Petitioner had opted for Composition Scheme as announced by State Government for Civil Contractors for assessment year 2007-08, 2008-09 and 2009-10. However, petitioner did not enter into Compounding Scheme for assessment year 2010-11. While, during year under consideration i.e. 2010-11, it received payment of Rs. 1,80,71,92,729/- from work executed in pursuance of contract obtained in assessment year 2007-08, 2008-09 and 2009-10. Petitioner also received Rs. 58,14,86,048/- from contract obtained in assessment ye....
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....of tax at 2% was not disputed by Department in any manner either by filing any appeal before First Appellate Authority or before the Tribunal. It was on 21.01.2019 that respondent no.2 issued notice under Section 29(7) of the VAT Act stating that during year under consideration petitioner had purchased and imported plant and machinery from outside the State of U.P used in execution of work contract for 18.24% of total contract amount, and thus was required to pay tax @ 6%. 6. Petitioner-assessee submitted his reply to above notice, but respondent no.2 on 15.03.2019 exercising power under Section 29(7) of the VAT Act passed an order of authorisation for reassessment. Pursuant to the said order, notices were issued for reassessment by respo....
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....15) 12 SCC 794, wherein the Apex Court has dealt with the concept of payment of compounded amount of tax. Relevant para 19 is extracted here as under:- "19. The concept of payment of compounded amount of tax is a bilateral agreement between the parties. The scheme of composition provides that the State Government is empowered to accept a lum sum amount in lieu of tax that may be payable by the dealer in respect of such goods or class of goods and for such period as may be agreed upon. For that purpose, the dealer is obliged to execute an agreement of undertaking to pay the sales tax in lump sum and the same is assessed at an agreed rate as envisaged under the Act itself. The scheme as introduced by the legislature provides for a bilater....
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....ce Compounding Scheme has been accepted and tax has been paid thereunder, question of reassessment by taking recourse to Section 29(7) does not arise and hence impugned proceeding of re-assessment is wholly illegal and without jurisdiction. It is further contended that under Compounding Scheme, Para 2(a), import was permitted upto 5 per cent against total cost of executed contract and if import is upto 5 per cent, tax payable was only 2 per cent but it is more than 5 per cent, then tax payable was 6 per cent. Respondents-authorities, in the case in hand, by reading aforesaid terms as total payment received by Contractor, have completely misread the said scheme and, therefore, even otherwise proceeding of re-assessment is wholly illegal and ....
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....r any other valuable consideration and includes a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. Section 2(f) defines "capital goods" which includes plant, machine, machinery, equipment, apparatus, tool, appliance or electrical installation used for manufacture of processing of any goods for sale. Section 2(au) defines "works contract" which includes any agreement for carrying out, for cash, deferred payment or other valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any movable or immovable property. 16. Thus from the conjoint reading of the ....
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....mposition Scheme, the respondentauthority was not correct to pass order of authorisation under subsection 7 of Section 29 for the re-assessment, as the same had attained finality and was binding in view of the Apex Court decision in case of Union Of India & Others Vs. Kamlakshi Finance Corporation, 1992 Supp(1) SCC 648. 20. As the order of authorisation for re-assessment is based on the fact that the capital goods should have been included in the value of work contract and was liable to be assessed @ 6%, respondent no.2 had no other material on record to form the basis for reason to believe that the income has escaped assessment. 21. In view of the above, we are of the considered opinion that the order dated 15.3.2019 authorising the resp....