2015 (10) TMI 514 - HC - VAT and Sales Tax

Valuation - inclusion of value of land in taxable turnover of builders/developers selling flats/apartments/units and paying VAT under lumpsum scheme - Held that - Assessment orders have been passed in all the cases as these cases are relating to lump sum tax payment - It is not disputed by learned counsel for the petitioner(s) that the appeal lies against the assessment orders passed by respondent No.3. Accordingly, we do not consider it appropriate to entertain the writ petitions at this stage. - Petition disposed of.

Summary

Issues:
Petitioner seeks to quash assessment order imposing VAT on land value in works contract, challenges instructions violating VAT Act/Rules, and questions constitutionality of provisions.

Analysis:

Issue 1: Assessment Order and Instructions
The petitioner filed a writ petition under Articles 226/227 seeking to quash the assessment order dated 17.3.2015 imposing VAT on the value of land transferred in works contract. The petitioner also challenged instructions dated 7.5.2013, 4.6.2013, and 10.2.2014 issued by respondent No.2, alleging violation of the Haryana Value Added Tax Act, 2003, and the Rules. The petitioner argued for the inclusion of land value in taxable turnover of builders/developers paying VAT under the lump sum scheme. The petitioner sought a writ declaring certain provisions ultra vires the Constitution of India for including land value in VAT for builders/developers.

Issue 2: Background and Facts
The petitioner, a developer, sold apartments/flats/units in 2013-14 through agreements and sale deeds. The petitioner had been filing returns and undergoing assessments till 2009-10 without tax demands for non-inclusion of land value in taxable turnover. However, respondent No.3 issued instructions in 2013 and 2014 to include land value for VAT purposes. Assessment orders were passed for various years, leading to disputes and legal challenges by the petitioner.

Issue 3: Court's Decision
After hearing arguments, the Court noted that the assessment orders were related to lump sum tax payment cases. The Court highlighted that the appeals process was available against such assessment orders. Consequently, the Court decided not to entertain the writ petitions at that stage. The Court disposed of the writ petitions, allowing the petitioner(s) to file appeals within 30 days from receiving the order, with no limitation if filed within that period.

In conclusion, the High Court of PUNJAB AND HARYANA addressed multiple petitions involving challenges to VAT assessment orders, instructions, and constitutional validity of provisions related to land value inclusion in taxable turnover. The Court directed the petitioner(s) to pursue the appeals process against the assessment orders, emphasizing the availability of remedies through appeal mechanisms.