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TMI Blog2016 (4) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... tion are that the petitioners are engaged in the business of building construction. The petitioners had acquired an old and closed textile mill with an intention to demolish the same and construct a commercial complex upon it. It appears that there were certain issues with regard to heritage monument and ultimately, commencement certificate was issued by the Ahmedabad Municipal Corporation on 8th April, 2011. Thereafter, the petitioners started demolishing the existing construction which continued up to December, 2010. The sales of scrap and debris were duly recorded in the books of account regularly maintained by the petitioners and the turnover of such sales was admitted in the returns submitted under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the "GVAT Act"). It is the case of the petitioners that since the offices were to be sold to the customers after completion of total construction, and the agreement for transferring the ownership of offices was attracting stamp duty on the ground that such sales were of immovable property, the petitioners bona fide believed that such transactions were sales of immovable property and not liable to tax under the GVAT Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for sales of offices in the returns filed under the GVAT Act. However, the petitioners duly paid purchase tax under section 9(1) of the GVAT Act on the purchases made from unregistered dealers. Output tax liability was also admitted on sales of scrap and debris. 3.1 On 24th August, 2012, the Assistant Commissioner of Commercial Tax visited the business premises of the petitioners and jumped to the conclusion that the petitioners were making sales in the execution of works contract and were liable to pay tax under the GVAT Act on the consideration received for sale of offices. The petitioners were compelled to pay the tax and interest even before the passing of the provisional assessment orders. On 4th September, 2012, the provisional assessment orders came to be passed for the years 2010-11, 2011-12 and for the period 1st April, 2012 to 30th June, 2012. Only the amount of penalty remained outstanding as per the provisional assessment orders. Being aggrieved with the provisional assessment orders, the petitioners filed appeals on 15th October, 2012. The said appeals came to be dismissed summarily on 5th February, 2013 by the first appellate authority on the ground of non-payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder was also given by the petitioners pleading for adjudication of the application made under the Amnesty Scheme. However, the respondents refused to grant the benefit of the Amnesty Scheme to the petitioners on the ground that payment of tax and interest was made by them prior to the date of the notification whereas according to the respondents, paragraph 7 of the notification requires payment of tax only during the period of Amnesty Scheme. Though the above view was communicated to the petitioners, no order was passed either allowing or rejecting the application filed by the petitioners under the Amnesty Scheme. Being aggrieved, the petitioners have filed the present petition seeking a direction to the respondents to grant them benefit of the Amnesty Scheme. 4. Mr. Uchit Sheth, learned advocate for the petitioners submitted that the respondents are not justified in refusing to grant the benefit of Amnesty Scheme under the Memorandum dated 14th October, 2014 to the petitioners. It was pointed out that the petitioners have been assessed to tax in respect of building units agreed to be sold during the course of construction. Such transactions were held to be involving deemed sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is the same permissible and in the opinion of the court would lead to absurd results. Reliance was also placed upon the decision of the Karnataka High Court in Manjushree Extrusions Ltd. v. Assistant Commissioner of Commercial Taxes, Bangalore, [2007] 8 VST 511 (Karn), for a similar proposition of law. It was, accordingly, urged that the petition deserves to be allowed and that the reliefs as prayed for, deserve to be granted. 5. On the other hand, Ms. Maithili Mehta, learned Assistant Government Pleader appearing on behalf of the respondents, referred to the Amnesty Scheme to point out that the same was introduced on 14th October, 2014 and is, therefore, prospective in effect. It was submitted that the present case pertains to financial years 2010-11, 2011-12 and partially 2012-13 and that the provisional assessment was carried out in the case of the petitioners for all the above financial years on 4th September, 2012 and that the petitioners had already paid the tax and interest for the said financial years on 30th August, 2012. It was submitted that the petitioners had challenged the provisional assessment orders before the first appellate authority which came to be dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sale of immovable property but in view of the above provisions, the use of goods in the construction of immovable property, is considered to be a deemed sale and is taxable. Many of the contractors who are in the business of construction and development of immovable property, were under the impression that sale of immovable property by them cannot be considered as sale of goods and hence, they had not discharged their tax liabilities. Recently on 26th September, 2013, the Supreme Court in the case of M/s. Larsen & Toubro Limited has held that the sales of goods in the course of transfer of property in construction schemes are liable to tax as deemed sales. At the time of implementation of the above Scheme and studying the present position of the contractors, a considerable number of works contractors have not obtained registration in the State and such registered as well as nonregistered contractors have not discharged their tax liabilities. It is considering the above position of the works contractors that the Scheme has been introduced. It is further stated in the Memorandum of the Scheme that the civil works contractors and developers have, in view of the ambiguity in law, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve already paid the tax prior to the coming into force of the Scheme. 11. At this juncture, reference may also be made to paragraphs 10 and 13 of the Scheme, which give a clear indication of the intent of the Government while introducing the Scheme. Paragraph 10 of the Scheme provides that the benefit of the Scheme shall also be available to those cases where appeal proceedings are pending. However, the dealer who takes the benefit shall be required to withdraw the appeal to the extent of the transactions shown in paragraph 1(B) or shall be required to revise the appeal accordingly. Paragraph 13 provides that where in connection with transactions under paragraph 1(B), tax, interest and penalty has already been paid, then the dealer availing of the benefit of the Scheme shall under no circumstances be entitled to refund of the amount so paid. On a conjoint reading of paragraph 10 and paragraph 13 of the Scheme, it is evident that the intention is to grant benefit also to those dealers who have paid the tax and interest prior to coming into operation of the Scheme. The only condition is that in case where the tax, interest and penalty has already been paid, the dealer shall not be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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