The High Court dismissed the petition challenging the assessment ...

Toll Road Construction Deemed Works Contract, Tax Liability Upheld.

Case Laws     VAT / Sales Tax

October 14, 2024

The High Court dismissed the petition challenging the assessment orders levying commercial tax under the Commercial Tax Act and Entry Tax Act. The key points are: The Build, Operate and Transfer (BOT) contract executed by the petitioner for constructing a bypass road amounted to a works contract. The petitioner was authorized to collect toll from vehicles to recover the construction cost, which is a deferred payment mode. The court held that the contract falls within the definition of a works contract under the relevant laws. The petitioner's contention that it did not execute a works contract was rejected. The court relied on its previous Full Bench decision in Viva Highways case, which clarified the scope of works contract. Consequently, the petition was dismissed as devoid of merit and substance.

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