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MB ASSOCIATES Versus STATE OF GUJARAT

2016 (9) TMI 1116 - GUJARAT HIGH COURT

Composition of tax under section 14A of the VAT Act - registered dealer under the provisions of the Gujarat Value Added Tax Act - works contract for construction of industrial establishment and factory buildings - dealer as defined in section 2(10)(f) of the VAT Act - for eight different works contract which the assessee was executing at the time of application but which had commenced prior to 1.4.2006 - whether on the facts and in the circumstances of the case, Gujarat Value Added Tax Tribunal .....

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6-2007, the last date for filing the application would be 30.11.2006, in such a case, the requirement of filing application within 30 days from the commencement of work envisaged in clause(iii) of subrule( 8)(b) of Rule 28, would not apply. - The authorities below however, did not apply the provisions of clause (iiia) and merely with the aid of clause (iii) rejected the assessee's application for composition of tax on the ground that the same was beyond 30 days from the commencement of the c .....

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1. The appellant assessee has challenged the judgement of the Value Added Tax Tribunal ( the Tribunal for short) dated 30.4.2008 under which the assessee's Second Appeal came to be dismissed. 2. Brief facts are as under. The appellant is a registered dealer under the provisions of the Gujarat Value Added Tax Act ( the VAT Act for short) and is engaged in the business undertaking works contract for construction of industrial establishment and factory buildings. The assessee is thus a dealer .....

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the said Rules for short), such permission cannot be granted. The assessee challenged such order before the appellate authority. The appellate authority by an order dated 17.5.2007 rejected the appeal by giving elaborate reasons. The authority referred to the provisions of section 14A of the VAT Act and rule 28(8) of the said Rules and held that since the works in question had commenced before 1.4.2006, in terms of section 14A(3) of the VAT Act and rule 28(8)(b)(ii)(iii) of the said Rules, such .....

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such facts, following question of law was admitted : Whether on the facts and in the circumstances of the case, Gujarat Value Added Tax Tribunal is justified in law in holding that the appellantassessee is not entitled to be granted permission under Section 14A of the Gujarat Value Added Tax, 2003 read with Rule 28(8) of the Gujarat Value Added Tax Rules, 2006? 4. As noted, the facts are brief. The assessee as a registered dealer who is engaged in execution of works contract had applied for comp .....

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tion of tax on works contract and reads as under : 14A Composition of tax on works contract. (1) Notwithstanding anything contained in this Act, the Commissioner may, in such circumstances and subject to such conditions as may be prescribed, permit every dealer referred to in subclause( f) of clause(10) of section 2 to pay at his option in lieu of the amount of tax leviable from him under this Act in respect of any period, a lump sum tax by way of composition at such rate as may be fixed by the .....

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ks contract prior to the appointed day and such work is not completed before the appointed day, such dealer shall pay the tax for the remaining work in accordance with the provisions of this Act. 6. Thus under subsection( 1) of section 14A the Commissioner may subject to conditions as may be prescribed, permit every dealer to pay at his option a lumpsum tax instead of amount of tax leviable under the said Act in respect of any period having regard to the incidence of tax on the nature of the goo .....

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e conditions specified as follows, namely: (i) Such permission be granted in Form 215 (Within fifteen working days from the date of receipt of an application) in respect of the contracts for which option to pay compensation money is exercised and such permission is effective from the date of the beginning of the date of this contract and till its conclusion. (ii) An application made under this rule shall be in respect of those contracts, which begin during the period for which the dealer hold va .....

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. However, clause (iiia) was added on 11.10.2006 and it provided that application for permission to pay lumpsum tax for the ongoing works contract during the year 2006-2007 shall be submitted on or before 30.11.2006. These two provisions therefore, have to be read together and interpreted harmoniously to ascertain the intention of the legislature. In plain terms clause(iii) requires a dealer to make an application within 30 days from the beginning of the contract. If this provision had remained .....

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ia), an application for composition of tax would have to be made within 30 days from the beginning of the contract. However, in cases where the works contract is ongoing during the year 2006-2007, the last date for filing the application would be 30.11.2006, in such a case, the requirement of filing application within 30 days from the commencement of work envisaged in clause(iii), would not apply. 8. The authorities below however, did not apply these provisions as explained above and merely with .....

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