9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 712 - HC - VAT and Sales TaxLiability of tax - works contract service - benefit of section 3-F(2)(B)(i) of the U.P. Trade Tax Act, 1948 - Held that - Considering that tribunal is the highest fact finding authority, it was expected that tribunal would look into all such factual aspects with a greater minuteness/clarity. Considering the fact that in respect of previous year, similar issues raised have already been remitted to the tribunal, where it is reported to be pending, it would be appropriate that this matter be also remitted to the tribunal, for examining the two aspects, which have not been dealt with by it elaborately - appeal allowed by way of remand.
Issues:
1. Challenge to the order of Commercial Tax Tribunal regarding tax liability for the financial year 2004-05. 2. Interpretation of 'works contract' in relation to construction activities. 3. Application of section 44-B of the U.P. Trade Tax Act, 1948 for determining tax liability. 4. Examination of factual and legal grounds for challenging tribunal's decision. Issue 1: Challenge to Tribunal Order The revisionist, a real estate company, challenged the Commercial Tax Tribunal's order imposing a tax liability of ?31,50,079.00 for the financial year 2004-05. The tribunal relied on the K. Raheja Development Corporation case to determine that the construction work undertaken by the revisionist fell under the category of a 'works contract'. The revisionist contested the proceedings on legal and factual grounds, but the tribunal affirmed the tax liability, including an addition of 20% to the turnover. The revisionist raised three grounds before the tribunal, challenging the legality of tax imposition based on the nature of agreements, denial of benefits under the U.P. Trade Tax Act, and the justification for the 20% addition towards construction materials. Issue 2: Interpretation of 'Works Contract' The tribunal concluded that the construction work undertaken by the revisionist qualified as a 'works contract' as per the principles established in the K. Raheja Development Corporation case. Additionally, the tribunal applied section 44-B of the U.P. Trade Tax Act, 1948, allowing a 20% increase in the absence of a determined sales price, which was deemed permissible where the value of goods used was not ascertained. The revisionist cited a previous order by the High Court, which led to the matter being remitted back to the tribunal for further examination of facts related to purchases from outside the state and additional profit determination. Issue 3: Application of Section 44-B The tribunal's decision on the application of section 44-B for the 20% addition towards construction materials was upheld. However, the tribunal's treatment of the other two issues raised by the revisionist was deemed inadequate. The revisionist's argument regarding the acceptance of books of account and the specifics of goods/materials purchased was not adequately addressed. Similarly, the tribunal did not sufficiently discuss whether goods imported from outside Uttar Pradesh were exclusively meant for the specific construction work. Due to the tribunal's limited analysis on these aspects, the matter was recommended to be remitted back for a more detailed examination. Issue 4: Examination of Legal and Factual Grounds The High Court acknowledged the thorough examination of the 'works contract' concept by the assessing authority and the tribunal, finding it in line with the definition under the U.P. Trade Tax Act, 1948. However, the tribunal's treatment of the other issues raised by the revisionist was considered lacking in detail. Given the importance of factual clarity in tax assessments, the High Court recommended a more meticulous review by the tribunal, especially concerning the specifics of purchases and imports for construction work. The High Court affirmed the tribunal's decision on the 'works contract' issue but suggested a more comprehensive analysis of the remaining grounds raised by the revisionist. This detailed summary provides a comprehensive analysis of the judgment, addressing each issue involved in depth while preserving the legal terminology and significant phrases from the original text.
|
