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2018 (3) TMI 197 - HC - Indian LawsVAT charges relating to the period of construction - collaboration agreement - whether this is the liability of owner or liability of builder? - interpretation of statute. Held that: - Clause 11 of the collaboration agreement is categorical that the “entire amount required or payable for carrying out construction, development, completion” was wholly on account of the builder. This Clause can have only one interpretation. The amount required or payable for carrying out the construction includes the VAT. The VAT amount would be covered clearly under the terminology “statutory and other fees” as contained in Clause 11. Thus, the demand for VAT charges from the owner cannot be on the basis of the collaboration agreement. The builder undertook the construction for his own benefit and not the owner’s benefit. The acquiring of ownership rights by undertaking construction shows that the collaboration agreement was not a contract for rendering services to the owner. There was no sale of goods or services between the owner and the builder. Admittedly, the VAT charges which have been claimed relate to the period of construction and not thereafter. The transaction for which the VAT is being demanded from the owner is, as per the invoice, for the period January, 2013 which is during the period of construction. This was clearly not the responsibility of the owner. The owner has not bought any goods or services from the builder for her benefit, but the construction items and other goods have been purchased by the builder for completing the construction which was his own responsibility. This is not a case of a `works contract' under Section 2(zo) of the Delhi Value Added Tax Act, 2004. Thus, on a clear reading of the collaboration agreement, the suit under Order XXXVII of the CPC is itself not maintainable. The suit is held to be not maintainable and the same is dismissed - appeal allowed - decided in favor of appellant.
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