2017 (2) TMI 1053 - HC - VAT and Sales Tax

Building of storage terminals for the benefit of NOCL - the agreement required the petitioner to design; to provide engineering; to procure the requisite construction materials; and to erect the terminal - whether the agreement entered into between the petitioner and NOCL is, in the nature of works contract? - maintainability of petition on the ground of alternate remedy - Held that - the fact that time was spent by the petitioner in prosecuting the writ petitions in this court would have to be taken into account, if, appeal(s) are preferred by the petitioner, vis-a-vis, the impugned orders. In this regard, the petitioner can have recourse to, if not Section 14 of the Limitation Act, 1963, surely, to the principles analogous to the said provision - Section 14 of the 1963 Act, applies to quasi judicial authorities. The writ petitions dismissed, giving liberty to the petitioner to approach the concerned statutory authority by way of the remedy available under the statute - decided against petitioner.

Summary

Issues:
1. Determination of whether the agreement between the petitioner and another entity constitutes a works contract.
2. Contention regarding adjustment of payments made to a sub-contractor under Rule 8(5)(c) of the 2007 Rules.
3. Consideration of the appropriate forum for addressing the issues raised in the writ petitions.

Analysis:
1. The judgment pertains to writ petitions challenging three separate orders dated 18.07.2016 concerning Assessment Years 2010-11, 2011-12, and 2012-13. The primary issue revolves around whether the agreement between the petitioner and another entity, termed as a "Terminalling Service Agreement," qualifies as a works contract. The petitioner argues that it is a Build Own Operate and Transfer contract (BOOT Contract) rather than a works contract, emphasizing the nature of the agreement and the payments involved. The first respondent, however, asserts that the agreement falls under the definition of a works contract based on the provisions of the Tamil Nadu Value Added Tax Act, 2006.

2. The petitioner further contends that even if the agreement is considered a works contract, the payments made to a sub-contractor, ABIR Infrastructure Pvt. Ltd., should be adjusted under Rule 8(5)(c) of the 2007 Rules. The Revenue, represented by Mr. Kanmani Annamalai, suggests that this aspect can be addressed by the appellate authority, emphasizing the need for factual determination and dispute resolution through an appeal process.

3. The High Court, after hearing arguments from both parties, acknowledges the disputed facts and the need for a thorough examination of the case. The court deems the appellate authority as the appropriate forum to address both factual and legal aspects initially. However, due to the petitioner's direct approach to the court instead of the appellate authority, questions arise regarding the opposition to a potential appeal based on delay. The court finds the Revenue's objection to the petition's maintainability on the grounds of an alternate remedy unfair, considering the time spent on the writ petitions. The judgment dismisses the writ petitions, granting liberty to the petitioner to pursue remedies available under the statute, emphasizing adherence to prescribed procedures, including pre-deposit requirements for filing appeals.

This detailed analysis highlights the key legal issues, arguments presented by both parties, and the court's decision regarding the appropriate forum for addressing the disputes raised in the writ petitions.