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TMI Blog2018 (3) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... es from the owner cannot be on the basis of the collaboration agreement. The builder undertook the construction for his own benefit and not the owner’s benefit. The acquiring of ownership rights by undertaking construction shows that the collaboration agreement was not a contract for rendering services to the owner. There was no sale of goods or services between the owner and the builder. Admittedly, the VAT charges which have been claimed relate to the period of construction and not thereafter. The transaction for which the VAT is being demanded from the owner is, as per the invoice, for the period January, 2013 which is during the period of construction. This was clearly not the responsibility of the owner. The owner has not bought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and build a building consisting of Basement, Stilt, Ground Floor, First Floor, Second Floor and Third Floor with terrace, at its own costs and expense, after getting the building plans and architectural drawings sanctioned from the authorities concerned. 3 10 11. That the responsibility of the entire amount required or payable for carrying out construction, development, completion of the said building including the charges and fees of the architect for preparation of the plans and all the other statutory and other fees and/or demands shall be applied wholly to the account of Builder. 12 20 21. The Owner shall bear and pay all outstanding charges and dues of whatsoever nature payable in respect of the said propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. 4. The owner handed over vacant possession of the property to the builder, on 13th October, 2012. Eighteen months period was stipulated for completing the building. The admitted position on record is that the building was completed and the First Floor, which fell in the share of the builder, was sold to the builder vide sale deed dated 15th January, 2014. The owner cooperated in execution of the final sale documents. Possession of the remaining floors was also given to the owner and accounts were settled in January 2014. 5. In October 2014, an invoice is claimed to have been raised by the builder to the owner seeking reimbursement of VAT charges payable towards construction of the building. It is alleged that the owner did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid agreement, the liability of statutory dues is of the builder. It is further submitted that there is no proof placed on record to show that the amount was actually deposited with the authority. The owner was not properly served in the suit under Order XXXVII of the CPC and hence she did not put in appearance. It is, thus, submitted that the decree was wrongly passed as there is no liability that can be fastened on the owner. It is further submitted that the suit under Order XXXVII of the CPC itself is not maintainable as the written contract i.e. the collaboration agreement clearly pinned the responsibility of paying statutory taxes and dues on the builder. 8. On the other hand, it is the submission of the builder that as per the agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rely by the builder. As per clauses 21 all taxes including house tax, property tax, water and electricity charges and other dues and demands from the date of handling over the vacant possession and during the construction period till possession is handed over back to the owner was to be paid and borne by the builder. Even the permissions from municipal authorities for sanction and approval of the construction was to be obtained by the builder. 12. Clause 11 of the collaboration agreement is categorical that the entire amount required or payable for carrying out construction, development, completion was wholly on account of the builder. This Clause can have only one interpretation. The amount required or payable for carrying out the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS etc., have been taken into account. Until then, there was no demand for the VAT charges and the invoice is claimed to have been raised for the first time only on 31stOctober, 2014. The invoice has clearly been raised as a complete afterthought after the entire transaction stood concluded between the parties. The legal notice and the suit filed thereafter have been a result of a deliberate misinterpretation of the collaboration agreement. The construction was the sole obligation of the builder and by raising an invoice towards VAT charges, the builder cannot pass on his responsibility and fasten the same on the owner. The owner has not bought any goods or services from the builder for her benefit, but the construction items and other goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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