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2017 (1) TMI 688 - HC - VAT and Sales TaxWorks contract - demand of tax on in respect of goods utilized for construction of flats - reliance was placed in the case of K. Raheja Development Corporation Vs. State of Karnataka, [2005 (5) TMI 7 - Supreme Court], as well as judgment in M/S. Larsen and Toubro Limited and another Vs. State of Karnataka and another [2013 (9) TMI 853 - SUPREME COURT], to demand tax. Held that: - the ownership of land is with the builder itself, and there is no development agreement entered into by the builders with the owners of the land. This is a material circumstance, which has completely been omitted from consideration by the Tribunal, while passing the order impugned - Various clauses of the agreement entered into by the builder with the allottee were referred to before the Tribunal. This Court finds that the Tribunal has not examined to any of the clauses of agreement, nor the nature of transaction itself has been commented upon, in order to return a finding that a works contract had come into existence. The Tribunal being the highest Court of fact was expected to have examined the nature of transaction itself, only after analyzing the clauses of agreement entered into between the assessee and prospective allottee, a finding of works contract could have been returned. It seems that Tribunal did not deal with the factual issues relating to transaction itself, as it was under the belief that the ratio of law laid down in K. Raheja Development Corporation as well as M/S. Larsen and Toubro Limited were clearly apparent. The distinction in fact have not been noticed, though it was apparent and had been pressed. In such circumstances, the Tribunal has failed to discharge the obligation imposed upon it by law of dealing with the factual issues raised and pressed before it, and therefore the order of Tribunal cannot be sustained. Since the Tribunal has not gone into factual issues in correct perspective, as such, the findings returned by it on the different issues are not liable to be sustained. Order of Tribunal do not sustain - matter on remand.
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