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2023 (8) TMI 115 - HC - VAT and Sales TaxComposition Scheme - Interpretation of statute - Condition No. 3 of N/N. VAT 1510/CR-65/Taxation-1 dated 09.07.2010 - restriction on set-off only in respect of purchases of those goods involved in the execution of a works contract the property in respect of which (goods) are transferred in the execution of such works contract - non-restriction on set-off in respect of purchases of goods involved in the execution of a works contract the property in respect of which (goods) are not transferred in the execution of such works contract. HELD THAT:- Pursuant to the powers vested in it by virtue of the provisions of Section 42(3A) of the MVAT Act, the State Government has notified the Composition Scheme vide the said Notification dated 9th July 2010. As held by this Court in the case of Maharashtra Chamber of Housing Industry and Others (Supra), a dealer has the option as to whether to opt for such a Composition Scheme or not and there is no compulsion or obligation upon a dealer to opt for such a scheme. As per the Composition Scheme notified by the said Notification dated 9th July 2010, the composition amount is one percent of the agreement amount specified in the agreement or the value specified for the purpose of stamp duty in respect of the said agreement under Bombay Stamp Act, 1958, whichever is higher - the Scheme provides for tax at a flat rate of one percent on the aforesaid amount. However, Condition No. 3 provides that a dealer who opts to pay composition under the said Scheme shall not be eligible to claim set-off of taxes paid in respect of the purchases. In the present case, the Appellant’s claim of set-off pertains to administrative expenses as well as expenses towards the lease of construction equipment which were used for the purpose of undertaking construction activity. The Appellant could not have executed the contract without the said expenses - On a plain reading of Condition No. 3 of the said Scheme, it is clear that the said condition prohibits a dealer opting for the Scheme from claiming set-off of taxes paid in respect of purchases. There is no merit in the argument of the Appellant that, just because Condition No. 3 refers to “the purchases”, it applies only in respect of certain kind of purchases and does not apply in respect of certain other purchases. If Condition No. 3 wanted to make an exception in respect of certain kind of purchases, then it would have expressly stated so. In the absence of any such exception made by Condition No. 3, in our view, on the plain language of Condition No. 3, it applies to all purchases. Further, the whole purpose of such a Composition Scheme is to provide for a convenient, hassle-free and simple method of assessment. By opting for the Composition Scheme, the contractor saves himself the bother of book keeping, assessment, appeals and other such things - this being the purpose and object of such a Composition Scheme, this very purpose and object would be totally and completely defeated if the argument of the 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. Thus, no substantial question of law arises in the present Appeal. The Appeal is dismissed.
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