9911796707
TMI Blog2008 (8) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... October, 2005, notice under Section 29(1)(e) and 29(2)(e) of Karnataka Sales Tax Act, 1957, came to be issued. It was addressed to the petitioner M/s Larsen & Toubro Limited. It was alleged that the petitioner is engaged in property development involving construction and building of flats and subsequent sale thereof. By a separate statement details of sale of flats was given. Those sales relate to the period 2000-2001 to 2004-2005. According to the Show Cause Notice the Department alleged that the petitioner has not been paying taxes on sale transactions of flats on the ground that the same relates to sales of complete flats, claimed as sale of immovable property. The Show Cause Notice further goes on to state that in view of the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration." 4. We also quote hereinbelow the definition of the word `contract' vide Section 2(v-i): "Section 2(v-i): "works contract" includes any agreement for carrying out for cash, deferred payment or other valuable consideration, the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any movable or immovable property." 5. We may add that the charging section is Section 5B of the 1957 Act which reads as under:- "Section 5B. Levy of tax on transfer of property in goods - (whether as goods or in some other form) involved in the execution of works contracts. Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Division Bench of this Court in Raheja Development's case (supra) and has taken the position that the petitioner Company had constructed the flats on behalf of the prospective flat buyers. In this case the Department has placed reliance essentially on Para 20 of the judgment in Raheja Development's case which reads as under: "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 installments set out in the agreement. As the appellants are not the owners they claim a "lien" on the property. Of course, under clause 7 they have right to terminate the agreement and to dispose of the unit if a breach is committed by the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch in the case of Raheja Development Corporation (supra) as enunciated in Para 20, is correct. If the Develop Agreement is not a works contract could the Department rely upon the second contract, which is the Tripartite Agreement and interpret it to be a works contract, as defined under the 1957 Act. The Department has relied upon only the judgment of this Court in Raheja Development Corporation (supra) case because para 20 does assist the Department. However, we are of the view that if the ratio of Raheja Development case is to be accepted then there would be no difference between works contract and a contract for sale of chattel as a chattel. Lastly, could it be said that petitioner Company was the contractor for prospective flat p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
