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TMI Blog2008 (11) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... greed to pay one per cent tax. This court is unable to agree with learned counsel for the petitioner for the reason that once it is found that the work undertaken by the petitioner is "works contract" which is defined under section 2(55) of the VAT Act, 2005, it cannot be said that the respondents have imposed any tax without authority of law. As such, the provision contained in article 265 of the Constitution of India, referred to by the petitioner is of no help to him. W.P. dismissed. - Writ Petition No. 1134 of 2007 - - - Dated:- 24-11-2008 - PRAFULLA C. PANT , J. PRAFULLA C. PANT J. By means of this writ petition, moved under article 226 of the Constitution of India, the petitioner has sought a writ in the nature of certiorari quashing the orders dated April 17, 2007 and March 16, 2007 (copies annexures 10 and 11 to the writ petition), issued by the Deputy Commissioner, Commercial Tax, Rudrapur. A further mandamus has been sought directing the respondents not to levy or collect tax on civil construction works undertaken by the petitioner. A declaration has also been sought to the effect that civil works undertaken by the petitioner are not liable for payment of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to which large number of people applied for allotment of flats/dwelling units to be developed by the petitioner in accordance with the layout plans sanctioned by SIDCUL. The petitioner is issuing allotment letters to the prospective buyers, a copy of which is annexed as annexure 5 to the writ petition, only to ascertain and bind the applicants as future buyers. Such applicants/prospective buyers have no right, title or interest in the dwelling units allotted to them till the transfer deed is executed in their favour. The petitioner's case is that he is not constructing the dwelling units on behalf of anyone else and the same is undertaken by the petitioner on his own behalf. Referring to the definition of the works contract given under the VAT Act, 2005, it has been stated in the writ petition that the tax is leviable only if works contract is undertaken by a dealer on behalf of someone else. It is further stated since the contract in question is not under any agreement for carrying out building project as such in view of article 265 of the Constitution of India, tax cannot be levied on the civil works undertaken by the petitioner as the same would be without any authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been stated that the petitioner is a dealer who is constructing flats as per the plans approved by SIDCUL and is collecting amounts from the prospective buyers. The dealer is getting 95 per cent of the cost of the flats before completion thereof, which clearly indicates that it is a civil works contractor. Relying on the principle of law laid down in K. Raheja Development Corporation v. State of Karnataka [2005] 141 STC 298 (SC); [2005] 27 NTN 243, it has been stated that the similar works undertaken by a contractor was held by the apex court to be a works contract . As to the reference of the judgment passed by Allahabad High Court on March 23, 2007 in Assotech Realty Private Limited v. State of Uttar Pradesh [2007] 8 VST 738 (Writ Petition No. 997 of 2006), it has been stated in the counter-affidavit that the facts of the said case were different. For the purposes of the present case, it has been stated that as per the terms and conditions of lease deed it is necessary for the petitioner to execute a tripartite sub-lease executed between SIDCUL, petitioner and the buyer before the possession of the flat is handed over to the buyer. The petitioner is not allowed to mortgage the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisement dated March 27, 2006. The bid dated April 27, 2006 offered by the lessee being the highest bid has been accepted by the lessor vide its letter of award, dated May 30, 2006 on the terms and conditions set forth therein. . . . . . (A) To hold the said plot (hereinafter referred to as the demised premises) with their appurtenances up to lessee for the term of 90 (ninety) years commencing from August 27, 2007 (date of signing of lease deed) except and always reserving to the lessor. (i) A right to lay water mains, drains, sewerages or electrical wires under or above the demised premises, if deemed necessary by the lessor in developing the area. (ii) The lessor reserves the right to all mines and minerals, claims washing goods, earth oil, queries in over and under the allotted plot and full right and power at the time to do all acts and thing which may be necessary or expedient for the purpose of searching or working and obtaining, removing and enjoy the same without providing or leaving and vertical support for the surface of the residential plot or for any building for the time being standing. Thereon provided always that the lessor shall make reasonable compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payments received towards land premium. (e) The permission to transfer the part or the built up space will be granted on the fulfilment of the following conditions: (i) The lease deed of plot has been executed and the lessee has made up to date payment of the plot premium, interest and one time lease rent. (ii) The lessee has obtained building completion occupancy certificate from SIDCUL/competent authority. (iii) The sub-lessee undertakes to put to use the premises for the residential use only. (f) Transfer of plots: The Transfer of allotted group-housing plot, as a whole will not be allowed under any circumstances. However, individual dwelling unit flat/plot will be transferable with approval of SIDCUL as per the following conditions: 1.. Transfer of dwelling unit will be allowed only after obtaining completion certificate by the developer. 2.. First sale/transfer of a flat to an allottee shall be through a tripartite sub-lease deed to be executed by lessor, lessee and sublessee on the request of the developer in writing. 3.. No transfer charges will be payable in case of first sale (original booking). However, on subsequent sale, transfer charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated would tantamount to a default and SIDCUL will have a right but not an obligation to get the infrastructure work done/completed. Any amount incurred by SIDCUL on this work would be debited to the lessee and would be adjusted against the premium already deposited/to be deposited as having a priority of payment over and above that of the premium and interest due. (k) The lessee shall maintain all services in good order and in good shape for a minimum period of five years or the extended period as may be necessitated after the date of completion of internal development works at its own cost. Long-term maintenance of the area, services, and buildings shall be ensured to the satisfaction of lessor by formulation of resident's society. Thereafter the maintenance function will be delegated to the housing welfare society to be formed by the residents with the help of the lessee. The lessee would be free to delegate the maintenance function to a specialised agency for this job, however, ultimate responsibility would rest with the lessee. (l) The lessee/sub-lessee shall make such arrangement as are necessary for maintenance of the building and common services and if the buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gineer that the project has failed to achieve at least 50 per cent of the target at this point of time SIDCUL will have the right but not the obligation to terminate the project due to default of the lessee. (vi) The lessee will reserve 60 per cent of the dwelling units/plots for the industries in IIE Pantnagar. In case the 60 per cent is not availed by the industries within six months after the launch of the marketing after execution of lease deed, the developer will be at liberty to sell these flats/plots to any one. . . Apart from this, there is a clause at the end of the lease deed which provides that in addition to the specific clause in the lease deed relating to cancellation, SIDCUL/lessor will be free to exercise its right of cancellation of lease or allotment in the cases enumerated under the head termination/ cancellation conditions . This court thinks it just and proper to further quote paras 12, 14 and 17 of the allotment letter, issued in favour of the petitioner, which is annexed as annexure 3 to the writ petition: 12. Lease deed will be done one for the developer and one for the flat owner. 14.. You shall be responsible for implementation of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of thirty days. That appeal shall not be dismissed on the ground of limitation provided it is filed within thirty days from today. In the meantime, for thirty days the status quo as of today shall be maintained. Appeals are disposed of. In view of the above quoted order passed by the apex court, the judgment and order passed by the Allahabad High Court on March 23, 2007 in Writ Petition No. 997 of 2006 (Assotech Realty Private Limited v. State of Uttar Pradesh [2007] 8 VST 738) need not to be discussed or relied on as the same stands set aside. Now, this court has to see whether the principle of law laid down by the apex court in K. Raheja Development Corporation v. State of Karnataka [2005] 141 STC 298 (SC); [2005] 27 NTN 243, is applicable to the present case or not. Though in the said case, the construction agency was not the owner of the land, the apex court in its para 20 observed as under (para 19 of STC): Thus the appellants are undertaking to build as developers for the prospective purchaser. Such construction/development is to be on payment of a price in various instalments set out in the agreement. As the appellants are not the owners they claim a 'li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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