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2015 (8) TMI 202 - HC - VAT and Sales Tax


Issues:
1. Interpretation of exemption notification for works contract related to roads.
2. Whether fixing safety barriers at a hazardous location on a national highway is part of a road construction contract.
3. Application of Rule 14 of Sales Tax Rules regarding exemption withdrawal.
4. Comparison with a judgment from Kerala High Court regarding road-related works contracts.

Analysis:
1. The case involved the interpretation of an exemption certificate granted for a works contract related to roads. The petitioner argued that the safety steel barriers fixed were not in accordance with the exemption notification, leading to the withdrawal of benefits. The respondent contended that the barriers were part of road construction, as found by lower authorities.

2. The contract awarded for fixing safety barriers at a Toll Plaza on National Highway No.8 was scrutinized. The Assessing Officer initially withdrew the exemption benefits, stating the barriers could be used for purposes other than roads. However, both the Deputy Commissioner (Appeals) and the Tax Board concluded that the barriers were indeed related to road construction and safety measures, justifying the exemption fee.

3. The petitioner relied on Rule 14 of the Sales Tax Rules, arguing that the exemption could be withdrawn if obtained through fraud or misrepresentation. The respondent countered this by highlighting that the exemption fee was leviable on all parts related to roads, as per the notification, making the fraud allegation baseless.

4. A comparison was drawn with a judgment from the Kerala High Court regarding road-related works contracts. The court differentiated the facts of the Kerala case, emphasizing that fixing safety barriers on a national highway was an integral part of road construction, unlike the post-construction work in the Kerala case.

In conclusion, the High Court ruled in favor of the respondent, stating that fixing safety barriers on the national highway was indeed related to road construction. This decision resolved the main controversy, rendering the other questions moot. The petition was dismissed, with no costs awarded.

 

 

 

 

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