TaxTMI 
TaxTMI 
2025 (4) TMI 1142
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....t, the Petitioner has to make good a sum of Rs. 5,28,000/- towards balance GST fee and produce the challan for proof of payment, copy of the same is produced as ANNEXURE-N. b) issue a writ order or direction in the nature of mandamus to the respondent to give effect to the representation of the petitioner to the respondent, copy of the representation of the Petitioner to the Respondent dated 05.09.2019 is produced as ANNEXURE-P. (b1) Issue a writ order or direction in the nature of mandamus to the Respondent No.1 to refund the Car Park sale proceeds illegally received from the Petitioner being an amount of Rs. 2.00 Lakhs in view of the law laid down by the Hon'ble Apex Court. (b2) Issue a Writ Order or direction to the Respondent- BDA in the nature of Mandamus to execute the Lease Cum Sale deed and put the Petitioner in physical possession of the Flat allotted in his favor by providing all modern amenities within 15 days at the same price sold to identical purchasers as per the sale deed produced as ANNEXURE-Q from today to serve the ends of justice. (b3) To impose exemplary costs on the Respondent BDA for all illegal actions contained in the....
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....project of the respondent-BDA at Valagerahalli Phase 6. That petitioner was provisionally allotted an apartment bearing Flat No.B1-501 in terms of an Allotment Certificate dated 09.04.2018 and the petitioner had paid the entire sale consideration in a total sum of Rs. 44,91,250/-. as indicated by the respondent- BDA as per the payment schedule. In addition petitioner had also paid Rs. 2,00,000/- towards the car parking space as per the advertisement. That petitioner had requested the respondent-BDA to inform the date of registration of the apartment allotted in his favour. (b) When things stood thus, respondent- BDA had issued an endorsement to the petitioner on 23.08.2019 calling upon the petitioner to pay a sum of Rs. 5,28,000/- towards the service Tax (GST) under the provisions of the Central Goods and Services Tax Act, 2017 (for short Act 2017) fee and to produce challan as a proof for having made the said payment. Petitioner in response had made a representation as per Annexure-P informing the respondent-BDA that, what was offered to him was a full completed apartment and there was no pre-construction agreement between the petitioner and respondent-BDA. As such, there....
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....f the letters of allotment produced at Annexure-M series. The respondent-BDA had also issued no objection certificates to the petitioners enabling them to avail loan from the nationalised bank or any other financial institutions. That petitioners had initially paid the sale consideration as quoted in the letters of allotment. That inspite of the payments of the sale consideration, the respondent- BDA failed to register the houses by executing absolute deeds of sale, instead issued endorsement calling upon the petitioners to pay the GST contending the construction of their duplex row houses was completed on and after 30.06.2017. (c) Some of the petitioners had submitted representations requesting the respondent -BDA not to insist for payment of GST, inasmuch as, in the initial notification issued by the respondent-BDA all taxes had been included. As such, respondent-BDA was not justified in collecting the additional tax towards the GST, is their claim. (d) It is also contended the rate at which the GST is demanded is not uniform. Different amounts have been demanded for different duplex row houses. It is contended that the respondent- BDA in its note sheet had note....
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....f the petition. 5. Sri. K.B. Monesh Kumar, learned counsel appearing for the petitioner in W.P.No.51001/2019 taking this Court through the averments made in the writ petition and the grounds urged therein and also the documents enclosed with the writ petition, vehemently submitted that; (a) the petitioner had been provisionally allotted apartment bearing Flat No.B1-501 of Valagerahalli Phase 6. That by the very notification/advertisement which was published by the respondent- BDA, General Public was called upon representing "pick a flat of your choice by submitting applications across the counter", as such it has to be presumed that the apartment offered by the respondent-BDA to the petitioner was completed in all respects. (b) He also referred to Clause 5 of the said notification to submit that the same had indicated successful applicants would have the options of choosing apartment of their choice. (c) He also referred to the Allotment Letter dated 09.04.2018 to contend that even on the date when the letter of allotment was issued the apartment was fully completed. As such, the total value of the apartment was indicated in the said letter as Rs. 44,0....
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....nd Toubro Limited at paragraphs 88, 89, 90, 91, 92, 97,100, 101 and 102 learned counsel contended that since the law is well settled that if an agreement is entered into after the apartment or unit is already constructed, then there would be no work contract. As such, the demand made by the respondent- BDA was one against the law laid down by the Apex Court. (k) He submitted that the law laid down by the Apex Court in the aforesaid judgments holds the field and the same is applicable to the facts of the instant case as well. Hence, seeks for allowing of the writ petition. 6. Sri Raghavendra G. Gayatri, learned counsel appearing for the petitioners in W.P.No.7028/2022 supplementing the submission made by Sri K.B. Monesh Kumar taking this Court through the records submitted that; (a) the very tender document in terms of which the respondent-BDA had allotted the construction contract to the tenderer/contractor provided that all taxes and duties including the taxes, duties and levies towards sales tax, service tax, municipal taxes, local taxes, octroi, work welfare cess etc., are required to be paid by the tenderer/contractor. (b) He referred to Clause 17 ....
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....situation as regards the petitioners in W.P.No.7028/2022 is his submission. He submitted that the petitioners had paid the consideration in instalments as evident from the records. 8. Sri K. Krishna, learned counsel appearing for the respondent-BDA in W.P.No.7028/2022 referring to the Office Notes at page 240 at Annexure-Z submitted that the Office Notes referred to in the said proceedings was in respect of a different project and not the project concerning the petitioners. He submitted that the project in which the petitioners have purchased the row houses pertain to Block Nos. 9, 13,18 and 22 constructed in the land bearing Sy.No.114 and 115 of Alur Village, Phase-2, construction of which was completed on 31.01.2019, while the project in respect of which the payment of tax was exempted was in respect of project in Blocks 1 to 5 construction of which was completed 30.06.2017. Hence, he submitted that there was no discrimination. 9. Learned Senior counsel appearing for the respondent -BDA as well as Sri. K.Krishna, learned counsel for the respondent -BDA also referred to Section 7 of the Act, 2017 and item 5 of Schedule II thereunder which according to them would provide that....
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.... 5. Supply of services The following shall be treated as supply of services, namely:- (a) ..... (b) construction of a complex, building civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier. Explanation. For the purposes of this clause- (1) the expression "competent authority" means the Government or any authority authorised to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:- (i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972 (20 of 1972); or (ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) a licensed surveyor of the respective local body of the city or town or village or development or planning authority; (2) the expression "....
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....the levy of tax on the goods deemed to have been sold in execution of a works contract, in our opinion, three conditions must be fulfilled: (i) there must be a works contract, (ii) the goods should have been involved in the execution of a works contract, and (iii) the property in those goods must be transferred to a third party either as goods or in some other form. In a building contract or any contract to do construction, the above three things are fully met. In a contract to build a flat there will necessarily be a sale of goods element. Works contracts also include building contracts and therefore without any fear of contradiction it can be stated that building contracts are species of the works contract. 90. Ordinarily in the case of a works contract the property in the goods used in the construction of the building passes to the owner of the land on which the building is constructed when the goods and materials used are incorporated in the building. But there may be contract to the contrary or a statute may provide otherwise. Therefore, it cannot be said to be an absolute proposition in law that the ownership of the goods must pass by way of accretion or exertion to ....
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....ridge under which contract it was entitled to receive and doubtless has received valuable consideration, has supplied goods, namely, reinforced concrete piles. Such piles are plainly manufactured articles. They are chattels. They were intended to be incorporated in a structure and were so incorporated. They lost their identity as goods in that structure. But this fact does not prevent the piles from being goods any more than it prevents bricks or stones or nuts and bolts from being goods. The fact that the goods were specially manufactured and designed for a particular purpose cannot be held to deprive them of the character of goods." 97. In light of the above discussion, we may summarise the legal position, as follows: 97.1. For sustaining the levy of tax on the goods deemed to have been sold in execution of a works contract, three conditions must be fulfilled: (i) there must be a works contract, (ii) the goods should have been involved in the execution of a works contract, and (iii) the property in those goods must be transferred to a third party either as goods or in some other form. 97.2. For the purposes of Article 366(29-A)(b), in a building contrac....
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....the contract is divisible into one for the sale of goods and the other for supply of labour and services. In other words, the single and indivisible contract, now by the Forty-sixth Amendment has been brought on a par with a contract containing two separate agreements and the States now have power to levy sales tax on the value of the material in the execution of works contract. 97.9. The expression "tax on the sale or purchase of goods" in Schedule VII List II Entry 54 when read with the definition clause (29-A) of Article 366 includes a tax on the transfer of property in goods whether as goods or in the form other than goods involved in the execution of works contract. 97.10. Article 366(29-A)(b) serves to bring transactions where essential ingredients of "sale" defined in the Sale of Goods Act, 1930 are absent within the ambit of sale or purchase for the purposes of levy of sales tax. In other words, transfer of movable property in a works contract is deemed to be sale even though it may not be sale within the meaning of the Sale of Goods Act. 97.11. Taxing the sale of goods element in a works contract under Article 366(29-A)(b) read with Entry 54 List....
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....ete it would be works contract. (emphasis supplied by this Court) 14. Perusal of the provisions of Central Goods and Services Tax Act, 2017 extracted hereinabove and in the light of the judgement of the Apex Court extracted hereinabove, makes it abundantly clear that if an agreement is entered into after the apartment/flat or unit is already constructed, then there would be no works contract. But so long as the agreement is entered into before the construction is complete, it would be a work contract, which would invariably attract payment of service tax at the given rate. 15. Question therefore arises in the these cases is whether the petitioners had entered into agreement with respondent-BDA at the time prior to completion of the construction?. 16. Relevant to refer the very notification dated 09.08.2017 issued by the respondent -BDA produced at Annexure-A. Under the heading "Note" below the table of payment, following is mentioned; "Note: 1. Final price of the flat may vary depending upon the revision, if any, 2. BWSSB and BESCOM deposits are not included in the price of the flat. These deposits are to be paid separately as per the zone where the fl....
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....; Allottees Date Instalments Allotment Letter dated Petitioner No.1 26.10.2017 2,10,000.00 07.11.2017 03.01.2020 91.250.00 03.01.2020 39,90,000 Petitioner No.2 20.09.2017 2,10,000.00 28.09.2017 18.11.2017 10,05,000.00 19.03.2018 10,00,000.00 02.01.2021 20,31,250.00 Petitioner Nos.3 & 4 24.09.2018 2,10,000.00 24.09.2018 17.09.2019 7,68,564.00 21.10.2019 33,12,686.00 Petitioner No.5 16.08.2017 5,25,000.00 24.08.2017 19.10.2017 9,18,750.00 13.12.2017 9,18,750.00 20.12.2018 9,18,750.00 Petitioner No.6 30.09.2020 37,66,250.00 21.11.2017 Petitioner No.7 13.11.2017 21,00,000.00 21.11.2017 20.04.2018 20,00,000.00 16.05.2019 10,00,000.00 17.09.2019 6,33,000.00 11.08.2020 3,50,000.00 16.12.2020 98,250.00 Petitioner No.8 30.01.2018 5,25,000.00 08.02.2018 07.04.2018 9,18,750.00 13.06.2018 9,18,750.00 09.08.2018 9,18,750.00 04.10.2018 9,18,750.00 22. Perusal of which would indicate that the petitioners therein had made applications for allotment of houses pursuant to the notification t....