9911796707
TMI Blog2021 (3) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... ataka Appellate Tribunal. (Hereinafter referred to as 'the tribunal' for short). The subject matter of the petition pertains to levy of tax on sale of apartments in the project between the period April 2005 to March 2006. The appeal was admitted by this court vide order dated 12.02.2021 on the following substantial questions of law: "(i) Whether the finding recorded by the Tribunal holding that the petitioner has undertaken works contract is liable to be taxed under the provision of Karnataka Value Added Tax Act, 2003 is perverse? (ii) Whether the Tribunal committed an error of law in holding that the petitioner is liable for pending under Section 72(2) of the Karnataka Value Added Tax Act, 2003?" 2. Facts leading to fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the same was covered under the category of declared goods and qualified for a rate of tax not higher than 4%. Accordingly, the further tax, interest and penalty was levied. The petitioner challenged the aforesaid order in an appeal before the Joint Commissioner of Commercial Taxes (hereinafter referred to as 'the Joint Commissioner' for short). The Joint Commissioner by an order 09.07.2008 dismissed the appeal by the petitioner. The petitioner challenged the order passed by the Joint Commissioner before the tribunal. The tribunal vide order dated 24.06.2011 affirmed the order passed by the Joint Commissioner in respect of non leviability of tax on sale of immovable properties. However, the contention of the petitioner wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the Act seeking to levy tax on indivisible works contract providing for exclusion of value of the land and determination of the value of goods incorporated into the contract only from the date of the agreement with the purchasers of the agreement, the charge fails and therefore, the orders are liable to be quashed. Attention of this court has also been invited to Article 336(29A) of the Constitution of India and it has been submitted that the Legislature is competent to enact an Act which provides for levy of tax on value of goods and it cannot enact a law to levy tax on transfer of properties. It is also urged that under Section 72(2) of the Act the levy of penalty is not automatic. It is also urged that in this case there was no cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modification, repair or commissioning of any movable or immovable property. Section 3(1) Levy of tax (1) The tax shall be levied on every sale of goods in the State by a registered dealer or a dealer liable to be registered, in accordance with the provisions of this Act. Section 4(1)(c) in respect of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract specified in column (2) of the Sixth Schedule, subject to Sections 14 and 15 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), at the rates specified in the corresponding entries in column (3) of the said Schedule. 3(2)(l)(m) (2) Determination of total and taxable turnover The taxable turnover shall be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chaser after incorporation of goods. 8. It has further been held in para 115 that activity of construction undertaken by the developer would be worst contract only from the stage the developer enters into a contract with purchaser of the flat and the value addition made to the goods transferred after the agreement is entered into with purchaser of the flat can only be made chargeable to tax by the State Government. 9. Thus, the aforesaid decision of the Supreme Court by which parameters have been fixed with regard to levy of value Added Tax on Works contract was laid down after the tribunal had passed the order on 24.06.2011. The tribunal therefore has taken into account the law as prevailing prior to the decision of the three jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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