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2016 (1) TMI 873 - HC - VAT and Sales TaxDemand of composition tax on service contract involving supply of labour, trenching and excavation works - Delhi Value Added Tax (DVAT) - Held that:- The stand of the AA that, once the dealer opts for composition, he is required to pay tax on the aggregate value of all the contracts, including pure labour contracts does not appear to be based on a correct understanding of the provisions of the Act. When the provisions are read as a whole, and in the context of the object and purpose of the Act, it is seen that the legislative intention was not to bring pure labour contracts within the purview of the Act, much less within the purview of Section 6 (1) of the Act. - pure labour contracts would not be subject to levy of tax under Section 5 or 6 of the Act. - Decided in favor of assessee. Change in the nature of contract from works contract to service contract - Held that:- Assessee did not produce copies of the composite works contract executed by it on which it paid the reduced amount of 4% tax in terms of Section 6(1) of the Act. - The Court is of the view that an opportunity ought to be given to the Assessee to produce all the relevant contracts before the AA to enable the AA to pass a fresh order on the issue. This would not unduly prejudice the Respondent. - Matter remanded back on the second issue.
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