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TMI Blog2017 (8) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... ms so added in the definition, itself make the position clear that any construction of building if repairs or alters from 2006, it will liable to 5% tax and not 8%. Therefore, not granting benefit of 5% tax to the Appellant is contrary to law. This tax is applicable to repairing or realteration to the old building, bridge and road also. In the present case, the terms “Works Contract” of repair and reconstruction and “Contract of Construction” of building, include repairs and reconstruction, have been in existence for more than 15 years. There is no contra material to dislodge the same. Therefore, the impugned order so passed, requires interference. The question so raised are answered positive accordingly. Whether the Tribunal is justified in upholding the decision of the Commissioner of rejecting the prayer for prospective effect? - Held that: - the question is answered in the negative against the Respondent. Appeal allowed - decided in favor of appellant. - MAHARASHTRA VAT APPEAL NO. 22 OF 2017 IN VAT SECOND APPEAL NO. 952 OF 2014 - - - Dated:- 25-7-2017 - ANOOP V. MOHTA AND SMT. ANUJA PRABHUDESSAI, JJ. Mr. Vinayak Patkar a/w Mr. Ishaan Patkar i/by roshni Naik fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring of the buildings Sarang and Sangam Bhavan . The dispute arose as to the classification of the contract executed by the Appellant as Construction Contract . The Appellant's case is that the terms construction includes Repairs and Reconstruction . The nature of repairs of Sangam Bhavan Colaba, Mumbai were external repairs and painting, internal structural damage, replacement of water supply and drainage pipeline, extra items of plumbing works, extra items of civil works, Addendum items of civil works. The Commissioner's determination: 7 The following question for determination was agitated before the Commissioner of Sales Tax, Maharashtra State under Section 56 of MVAT Act on the basis of Appellant's Application dated 12 June 2010. The question for determination was What is the rate of tax payable under Section 42(3) Expl. (i) Read with Notification No. VAT 1506/CR 134/Taxation 1 dated 30 11 2006 on the sales effected by the applicant vide Invoice No.220 dated January 01, 2013 raised on Sangam Bhavan C.H.S. Ltd.? 8 The Appellant submitted a bill along with the Application for determination. It is further submitted that the Repairs Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract shall mean construction contract as may be notified by the State Government in the Official Gazette, from time to time, and (ii) the amount payable towards sub contract involving goods means the aggregate value of the goods on which tax is paid and the quantum of said tax paid by the sub contractor or the sub contract value on which tax by way of composition is paid by the sub contractor, as the case may be. 10 The reference is also made to Notification issued under same Section (A) and (B) which are as under: Notification No VAT.1506/CR 134/Taxation 1 In exercise of the powers conferred by clause (I) of the Explanation to sub section (3) of Section 42 of the Maharashtra Value Added Tax Act, 2002 [Mah. IX of 2005], the Government of Maharashtra hereby notifies the following works contracts to be the 'Construction contracts' for the purposes of the said sub section, namely (A) Contracts for construction of, (1) Buildings, (2) Roads, (3) Runways, (4) Bridges, Railway overbridges, (5) Dams, (6) Tunnels, (7) Canals, (8) Barriages, (9) Diversions, (10) Rail tracks, (11) Causeways, Subwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e practice so adopted by the Department since long, ought not to have been overruled while rejecting the case/claim of the Appellant. 14 Therefore, considering the scheme and purpose of Section 42(3)(i) and notification dated 30 February 2006 under the MVAT Act, we are of the view that the 'Works Contract' in question, would be the 'Construction Contract'. the contract for construction of buildings includes the repairing, reconstruction and maintenance of building etc. This is also for the reason that there is no distinguishing features and definitions and/or intention reflected in any provisions about the nature of buildings, whether it is new building or old building. The word new or old so observed in the impugned order as not specifically defined or explained anywhere, cannot be added by giving such restrictive interpretation to the provisions and the notification in question. The term Building cannot be restricted only to the new building specifically when, as per the practice and the explanation so given in similarly placed provisions under the WC Act and the notification explaining the term so referred above. Inspite of the earlier provisions and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at itself cannot be the reason to overlook the same with observation that, as there is no afresh explanation given under the Act. Those earlier notifications ought to have been read to interpret similar and same identical notification and the term. We are not accepting the case of the Tribunal in this regard. The Tribunal is bound by the notifications so issued, specifically when those notifications are referring to the identical situation and granting benefits to the Works Contract of repair, reconstruction and maintenance of building. As legally and even otherwise also, it is difficult to dissect and reflect the Construction Contract only for stating new building and not applicable to the old building . 19 The concept Works Contract is defined and explained under Articles 286 (1), (2) and (3) and 366(29 A) of the Constitution of India and further elaborated in Builders Association of India and Ors. Vs. Union of India Ors. [1989] 73 STC 370 (SC). Therefore, the contract in question of repairing or reconstruction, falls within the ambit of Construction contract of building. All ingredients of works contract of repair and reconstruction are applicable. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so given by the Department for more than 15 years whereby, the Construction Contract of building includes its repair, reconstruction and maintenance. The Division Bench of this Court vide order dated 6 May 2016 in Sales Tax Reference No. 55 of 2014 in the case of M/s. Permasteelisa (India) Pvt. Ltd. Vs. State of Maharashtra Ors. is also of no assistance, though reference to the same notification, as that was not contract for construction of building, but it was construction of Glass Walls. 23 The concept and its utility of works contract is settled by Supreme Court in the case of Kone Elevator India Private Limited vs. State of Tamil Nadu reported in 2014 (7) SCC 1. 62. ... 5. .... Therefore, in judging whether the contract is for a sale or for 'work and labour', the essence of the contract or the reality of the transaction as a whole has to be taken into consideration. The predominant object of the contract, the circumstances of the case and the custom of the trade provide a guide in deciding whether transaction is a sale or a works contract . Essentially, the question is of interpretation of the 'contract'. It is se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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