TMI Blog2016 (1) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - ST.APPL. 24/2015 - - - Dated:- 14-1-2016 - S.MURALIDHAR AND VIBHU BAKHRU, JJ For the Petitioner : Ms P. L. Bansal, Senior Advocate with Mr Ruchir Bhatia, Advocate. For the Respondent : Mr Peeyoosh Kalra, ASC for GNCTD With Ms Mahua Kalra, Advocate. ORDER Dr. S. Muralidhar, J.: 1. This is an appeal by the Assessee under Section 81 of the Delhi Value Added Tax Act, 2004 against the order dated 23rd May, 2014 passed by the Appellate Tribunal, Value Added Tax, Delhi ( Tribunal ) in Appeal No.637/ATVAT/08-09 for the Assessment Year ( AY ) 2004-05. 2. The Assessee is engaged in the business of executing pure labour contracts, under which the Assessee supplies skilled and unskilled labour for excavation work. The Assessee also executes contracts which involves transfer of property in goods and the same are exigible to tax under the provisions of The Delhi Sales Tax on Works Contract Act, 1999 ( Act ). The Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of property in goods whether as goods or in some other form involved in the execution of a works contract in the National Capital Territory of Delhi . The expression works contract has been defined under Section 2 (1) (u) of the Act to include any agreement for carrying out for cash or for deferred payment or for any valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement repairing or commissioning of any movable or immovable property but shall not include such contracts as may be prescribed. The expression dealer has been defined under Section 2(1)(f) to mean any person, who whether for valuable consideration, commission, remuneration or otherwise, while executing a works contract transfer property in goods (whether as goods or in some other form) involved in the execution of such works contract and includes any State Government and the Central Government which so transfers such property in goods, and any society, club or association of persons which so transfers the property in goods to its members. 10. Section 3(1) of the Act provides that every dealer whose turnover of sales dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e turnover of the sales of the dealer for the purposes of Section 5 will be determined after deducting certain amounts calculated at a fixed percentage, towards labour and service for the different types of contract, in terms of a table set out thereunder. 14. When it comes to availing the benefit of composition of tax under Section 6 of the Act, the dealer who elects for such composition is required, in terms of Rules 6 (1) of the Rules, to submit an application in Form-VII to the AA. Under Rule 6(2)(i) the AA has to conduct verification before permitting the dealer to avail of the benefit of composition. 15. A combined reading of the above provisions indicates that the Act does not intend to bring to tax anything other than the value of the goods transferred whether as goods or in some other form in the execution of a works contract. The value of labour and services and other like charges are kept out of the ambit of the taxable turnover. Where their value is not clearly ascertainable, as in the case of a composite works contract, Rule 5 (2) provides for a deduction from the total turnover a fixed percentage in terms of the table set out thereunder. However, when a dealer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(1) of the Kerala Value Added Tax Act, 2003 (Kerala VAT Act) which corresponds to Section 6 of the Act. In Geogy George v. State of Kerala (2014) 71 VST 510 (Ker) the High Court explained as under: 16.....Section 8 (1) (a) only refers to tax payable on the whole contract amount without referring to turnover. Once he chooses to seek the benefit under Section 8 to pay concessional rate of tax, it has to be done on the whole amount which would mean value of entire contract done by him in respect of a particular contract or with respect of the work done in a year, without any bifurcation claiming exemption. But, in an instance where during an assessment year the assessee does only labour contract for one person and composite work for another person, there is no obligation to pay compounded tax for the said labour work, but in respect of the composite work, the compounded tax has to be paid. ..... 21. We have already dealt with the issue, as to the circumstances under which compounded tax is payable. The liability to pay compounded tax arises only if there is a liability to pay tax. If it is a composite contract involving a labour contract and supply of materials, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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