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TMI Blog2017 (8) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of tax applicable to a contract for repairs of a building, as the repairs/reconstruction contracts are covered by the expression "construction contracts", which is used in Section 42(3) of the MVAT Act read with Notification No. VAT.1506/CR134/Taxation/1 dated 30 November 2006. The rate of tax applicable thereto, would be 5% as notified under the Act. The Appellant had forwarded along with the Application to the Commissioner such type of contract with the Sangam Bhavan Building. 4 The Appellant also prayed for the direction that the determination of the Commissioner should not affect the liability of the Appellant under the Act in respect of any sale effected prior to the determination. The Commissioner by order dated 25 July 2014, rejected the contention of the Appellant and made a determination that the contract is not a "Construction Contract", thus attracting the rate of tax at 8%. Being aggrieved by the order passed by the Commissioner, the Appellant approached the Maharashtra Sales Tax Tribunal (for short, "the Tribunal") in Appeal. The Tribunal by Judgment and order dated 15 December 2016, confirmed the order passed by the Commissioner. Hence, the Appeal. 5 Following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e MVAT Act, held that 1. The contract effected with Sangam Bhavan C.H.S. Ltd. is a repairs contract and not covered under the notification issued under the Explanation to section 42(3) of the Maharashtra Value Added Tax Act, 2002. The rate of tax on the sales effected by the applicant through invoice no. 220 dated January 01, 2013 raised on Sangam Bhavan C.H.S. Ltd. is 8%. 2. For reasons as discussed in the body of the order, the request for prospective effect is rejected." The relevant provisions of MVAT Act: 9 The Commissioner read and referred Section 42 (3) of the MVAT Act, which reads as under: "Section 42(3) Where a dealer is liable to pay tax on the sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, he may subject to such restrictions and conditions as may be prescribed, in lieu of the amount of tax payable by him under this Act, whether in respect of the entire turnover of sales effected by way of works contract or in respect of any portion of the turnover corresponding to individual works contract, pay lumpsum by way of composition, (a) equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the contract of repair, reconstruction and maintenance to buildings, roads, drainage etc. will fall under the 'Construction Contracts'. In this regard, it is clarified that the Works Contract of repair, reconstruction and maintenance of buildings, dams, bridges, canals and barrage etc. will be covered under the expression of 'Construction Contract." 12 Section 6A of WC Act its explanation dated 1 January 2000 made the position clear that "For the purpose of this subsection, the expression "construction contract" shall mean such contract as may be notified by the State Government from time to time." The Commissioner, however, not accepted the case by referring to the circulars. 13 It is necessary to note that under the WC Act, referring to Section 6A(1) a similar notification dated 8 March 2000 was in existence, referring to the contract for construction of "building". Similar clause (B) of notification under MVAT Act dated 30 November 2006 was in existence under Section 42(3) Explanation. The Trade circular was in existence about the repair, reconstruction and maintenance to buildings, dams, bridges, canals and barrages would be covered under the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Building", if such Works Contracts are also awarded and executed before the completion of the main contract, falls within the ambit of Section 42(3) clause (i) of the MVAT Act for all the purposes. 16 The basic requirement that such incidental or ancillary contract must be awarded and/or proceeded and/or completed along with the construction of building. In the present case, as the repairs and reconstruction falls within the ambit of 'Construction Contract', in incidental or ancillary contract so awarded before the completion of the contract, it also falls within the ambit of these provisions for all the purposes. Therefore, the repair and the reconstruction of the buildings includes such incidental or ancillary work. Such related and ancillary work needs to be given an equal treatment. 17 The identical notification under the erstwhile Bombay Sales Tax Act, 1959, dated 8 March 2000 and further notification/circular under the extension of minutes 1998, dated 6 January 2000 under the WC Act giving consistent explanation that Works Contract of repairs and reconstruction and maintenance of the building etc. shall be covered under the explanation of expression of "contract" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ratio of the Judgment so referred in M/s. Bansal Wire Industries Ltd. & Anr. Vs. State of U. P. & Ors. dated 26 April 2011, (SLP (C) No. 21999 of 2010) was not properly extended. On the contrary, this supports the case of the Appellant that "It is as settled principle of law that the words used in the section, rule or notification should not be rendered redundant and should be given effect to. It is also one of the cardinal principles of any statute that same meaning must be given to the words used in the section or notification." (2) In the case of Union of India v/s Hansoli Devi reported in (2002) 7 SCC 273 wherein Hon'ble Supreme Court held that "It is a cardinal principle of construction of a statute that when the language of the statute is plain and unambiguous, the court must give effect to the words used in the statute. Besides, in a taxing Act one has to look merely at what is clearly said and there is no room for any intendment. In a taxing statute nothing is to be read in, nothing is to be implied, one can only look fairly at the language used." (emphasis supplied). 22 The Judgments, so cited by the learned Counsel appearing for the Respondent in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ypes such as bridges, dams, plants, highwaystreet, railway, airport, canals, channels. Above meaning has been recognized in practice and explained under the related law, since long. There is no specific artificial definition brought in force by this Act/notification. Therefore, above meaning, in our view, still hold the field. Therefore, the law needs to be interpreted accordingly. 25 We are not concerned with the manufacture, production, construction or assembling of vessels, aircrafts or such kind of personal property. We are also not concerned with the sale of goods or manufacture or production of goods or service, separately. We are concerned with the construction of building, which falls within the concept "Works Contract" of repair/alteration of building. 26 The building and other related items so added in the definition, itself make the position clear that any construction of building if repairs or alters from 2006, it will liable to 5% tax and not 8%. Therefore, not granting benefit of 5% tax to the Appellant is contrary to law. This tax is applicable to repairing or realteration to the old building, bridge and road also. 27 In the present case, the terms "Work ..... X X X X Extracts X X X X X X X X Extracts X X X X
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