The court affirmed that a Build, Operate, Transfer (BOT) contract constitutes a works contract under tax laws, making the contractor liable for commercial and entry taxes.

ORDER :

Vivek Rusia, J.

In Writ Petition No.2883 of 2008

Petitioner has filed the present petition challenging the common order dated 23.10.2007 passed by the Additional Commissioner, Commercial Tax/Revisional Authority under the M.P. Vanijyik Kar Adhiniyam, 1994 (hereinafter referred to as “Commercial Tax Act”) and the M.P. Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (hereinafter referred as “Entry Tax Act”) for the assessment year 01.04.2003 to 31.03.2004. The petitioner is also aggrieved by an order of assessment dated 29.12.2006 passed by the Assistant Commissioner of the Commercial Tax.

In Writ Petition No.3029 of 2007

2. Petitioner has filed this petition challenging the order dated 14.11.2006 passed by the Additional Commissioner, Commercial Tax under the Commercial Tax Act and Entry Tax Act and order dated 30.01.2006 passed by the Assistant Commissioner of the Commercial Tax for the assessment year 01.04.2002 to 31.03.2003.

In Writ Petition No.1414 of 2009

3. Petitioner has filed this petition challenging the order dated 14.11.2008 passed by the Additional Commissioner, Commercial Tax under the Commercial Tax Act and Entry Tax Act and the order dated 26.12.2007 passed by the Assistant Commissioner of the Commercial Tax for the assessment year 01.04.2004 to 31.03.2005.

4. Since the controversy involved in these cases is identical in nature, therefore, all these writ petitions filed by the petitioner are finally heard and decided by this common order. For the sake of convenience, facts of Writ petition No.2883 of 2008 are being taken for disposal of all the aforesaid writ petitions.

Facts of the case

5. The petitioner is a private limited company that entered into the contract of construction, development, strengthening, maintenance and operation of toll roads under the scheme of Build, Operate and Transfer (hereinafter referred to as “BOT”) floated by the State and the Central Government. The petitioner comes under the definition of “registered dealer” as defined under Section 2(gg) of the M.P. Entry Tax Act, 1976 and holding the certificate No.TIN 23030903601 which continues under the M.P. VAT Act, 2002.

The details of the contract in question

6. The Executive Engineer of the Public Works Department, of the State of M.P., Division Dewas issued a tender notice dated 12.07.2000 inviting bids for construction of the Dewas By-pass road under the scheme of BOT. The total length of the road in the contract is 19.8 km including one medium bridge, 27 numbers of culverts, junctions and rotaries, protection works, toll tax barriers and booth, plantation, fencing truck parking lay-by and longitudinal drains, etc. It was made clear in the tender condition that the successful tenderer was required to maintain and operate the by-pass for the period of 10 years i.e. concessional period, for use of the general public. The tenderer was also authorised to collect the toll from the vehicles passing through the toll plaza constructed on a by-pass. This means the tenderer was permitted to recover the cost of construction and its maintenance during the concessional period by way of toll from the vehicles passing through the Dewas by-pass.

7. In response to the aforesaid NIT, M/s Ashoka Buildcon Ltd. submitted its bid which was accepted by the Public Works Department of the State of M.P. vide memo No.2472 dated 17.04.2001. A letter of acceptance of the bid was issued to the successful tenderer followed by execution of an agreement dated 31.08.2021. As per clause 24.1 of the agreement, M/s Ashoka Buildcon Ltd. was required to make arrangements for the fund to be utilized in the construction and maintenance of the Dewas by-pass from its resources either by way of borrowing from the market or a bank or other financial institutions. M/s Ashoka Buildcon Ltd. vide letter dated 08.05.2021 requested the Executive Engineer to permit it to promoter a separate Special Purpose Vehicle (SPV) Company to implement the project which was duly accepted vide