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2020 (2) TMI 599 - HC - VAT and Sales TaxDemand of VAT u/s section 5/6 of the TN VAT Act, 2006 - petitioner’s father had settled an immovable property along with an existing house in favour of the petitioner and her sister in the year 2004 - the impugned order has been passed without following principles of natural justice and without actually examining whether indeed the petitioner has rendered any works contract as has been confirmed the impugned order - HELD THAT:- The intention of the State Legislature was to levy and collect stamp duty at 1% was on the cost of the proposed construction or the value of construction or the consideration specified in the agreement whichever was higher relating to proposed construction of building at the stage of construction and not thereafter. Expression “building” included any unit proposed to be construct - It was not intended to cover situation where the building was already constructed. In the facts of the case, it is evident that there was indeed a sale of flat/apartment by the petitioner and therefore stamp duty payable would have been under Article 23 of the Schedule-I to the Indian Stamp Act, 1899. The truncated valuation of UDS in the land for payment of stamp duty and registration of Construction Agreement on payment of stamp duty at 1% + 1% registration in the case of built up unit was not intended under the Stamp Act, 1899 - There was no works contract by the petitioner exigible to tax under the provisions of the TN VAT Act, 2006. At best, such a tax liability would have been payable only by the 3rd respondent and not on the petitioner. The issue needs proper examination - appropriate action ought to have been taken only by the authorities under the Stamp Act, 1889 under Section 47 A of the Stamp Act, 1899, in accordance with law and not from the petitioner under the provisions of the TN VAT Act, 2006 - the impugned order demanding tax under the provisions of the TN VAT Act, 2006, is unsustainable. Petition allowed.
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