Back
2023 Supreme(Bom) 1415
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K.R. Shriram, Firdosh P. Pooniwalla, JJ.
Oasis Realty - Appellant
Versus
The Commissioner of Sales Tax and Ors. – Respondents
Maharashtra Value Added Tax Appeal No.6 of 2022
Decided On : 26-07-2023
Advocate Appeared:
For the Appellant : Mr. Sahil Parghi i/b Mr.Sriram Sridharan
For the Respondent: Ms. Jyoti Chavan, A.G.P.
Headnote:
Maharashtra Value Added Tax Act, 2002 – Central Sales Tax Act, 1956 – Bombay Stamp Act, 1958 – Business of construction – Development and sale of immovable properties – Discharge of liability – Whether Condition No.3 of Taxation-1 restricts set-off only in respect of purchases of those goods involved in execution of a works contract property in respect of which (goods) are transferred in execution of such works contract – Held, In Court view, this being purpose and object of such a Composition Scheme, this very purpose and object would be totally and completely defeated if argument of Appellant is accepted and the AO has to make an enquiry as to what goods have been transferred and in respect of what purchases set-off can be claimed – Court are unable to accept interpretation sought to be placed by Appellant on Condition no.3 – In court view, by its Order, Tribunal has correctly rejected Appellant’s claim of set-off – Appeal dismissed.
JUDGMENT :
Firdosh P. Pooniwalla, J.
1. The present Appeal challenges an Order dated 20th October 2021 passed by the Maharashtra Sales Tax Tribunal (“the Tribunal”) in VAT Second Appeal No.240 of 2020 filed by the Appellant for the period 1st April 2013 to 31st March 2014.
2. The Appellant is an association of persons. The Appellant is registered under the Maharashtra Value Added Tax Act, 2002 (“the MVAT Act”) and Central Sales Tax Act, 1956 (“the CST Act”). The Appellant is engaged in the business of construction, development and sale of immovable properties, i.e., flats and dwellings, in the State of Maharashtra. As part of its business, the Appellant has constructed various apartments / buildings / flats and transferred the same under written agreements to buyers along with the underlying land or the interest in such land.
3. For the purpose of payment of VAT towards the aforesaid construction activity, the Appellant opted for the Scheme of Composition notified by Respondent No.2 under Section 42(3A) of the MVAT Act vide Notification No.VAT 1510/CR-65/Taxation 1 dated 9th July 2010. The said Scheme was opted for by the Appellant for agreements in respect of sale of flats which were registered during the year 2013-14 and was to be the basis on which the Appellant was to pay VAT in respect of construction of such flats. The Scheme as notified by the said Notification dated 9th July 2010 reads as under:
In exercise of the powers conferred by sub-section (3A) of Section 42 of the Maharashtra Value added Tax Act, 2002 (Mah.IX of 2005), the Government of Maharashtra hereby, provide a scheme of Composition for the registered dealers specified in column (1) of the following schedule, who undertakes the construction of flats, dwellings or buildings or premises and transfer them in pursuance of an agreement alongwith land or interest underlying the land and prescribes the rate of tax specified in column (2) of the said Schedule by way of composition, in lieu the amount of tax payable on the transfer of goods whether as goods or in some other form, in the execution of such works contract by such registered dealer under the Act, subject to the conditions and restrictions specified in column (3) of the said schedule.
| Class of dealer | Composition Amount | Conditions |
| A registered dealer who undertakes the construction of flats, dwellings or buildings or premises and transfer them in pursuance of an agreement along-with land or interest underlying the land | One percent of the agreement amount specified in the agreement of value specified for the purpose of Stamp Duty in respect of said agreement under Bombay Stamp Act, 1958, whichever is higher | 1. All the agreements, which are registered on or after 1st April, 2010 shall be covered under this composition scheme. |
| 2. The claimant dealer shall make epayment of the amount of composition for the return period in which the agreement is registered and include such agreement value as turnover of sales in the said return. | ||
| 3. The claimant dealer opting to pay composition under this scheme shall not be eligible to claim set-off of taxes paid in respect of the purchases. | ||
| 4. The claimant dealer shall not transfer the property in goods, procure from outside the State, using the declarations in Form C under the Central Sales Tax Act, 1956 in the contract for which the composition of tax payment is opted. | ||
| 5. The claimant dealer shall not issue declaration in Form 409 to his subcontractor in respect of the works contract for which composition is opted. | ||
| 6. The claimant dealer shall not be entitled to change the method of computation of tax liability in respect of contract for which he has opted for this composition scheme. | ||
| 7. The claimant dealer shall not issue Tax invoice. |
4. The Appellant had, for Financial Y
