2010 (4) TMI 973 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of agreement for water supply project in works contract under Maharashtra Sales Tax on the Transfer of Property in Goods Act, 1989.

Analysis:
The High Court of Bombay considered an application for reference to address a substantial question of law regarding the interpretation of an agreement between the respondent and BMC contractee for a water supply project. The Tribunal had held that water and sewerage charges, billed for but later deducted without actual payment, should not be considered part of the contract price for the levy of composition money under the relevant Act. The Tribunal's judgment highlighted that the provision for water and sewerage was agreed to be made by BMC itself, and the charges were determined by BMC for accounting purposes, not as part of the bid-price quoted by the appellant. The Tribunal concluded that the charges were neither receivable nor received by the appellant, leading to the rejection of the application for reference. The Court emphasized that the Tribunal thoroughly examined the issue and determined it to be a question of fact rather than a question of law.

In the detailed analysis, the Court reiterated the Tribunal's findings that the water and sewerage charges were not part of the contract value liable for composition tax under the Act. The charges, unilaterally decided by BMC for its accounting purposes, were not reflected in the bid-price quoted by the appellant. The Court concurred with the Tribunal's assessment that the charges were neither receivable nor received by the appellant as per the contract terms. The Tribunal's decision was based on a factual evaluation of the contract terms and the nature of the charges, leading to the conclusion that the issue at hand was a question of fact rather than a question of law.

Ultimately, the Court dismissed the application for reference, emphasizing that the Tribunal had extensively considered the matter and determined it to be a factual question. The Court found no grounds to challenge the Tribunal's decision, as it was based on a thorough analysis of the contractual provisions and the nature of the charges in question. The application was therefore rejected, with no order as to costs, based on the Tribunal's detailed examination and conclusion that the issue did not warrant a reference for a legal determination.