LAWS(KER)-2016-6-159

M/S. FEDERAL HOUSE CONSTRUCTION CO-OPERATIVE SOCIETY LTD. Vs. THE COMMERCIAL TAX OFFICER (WORKS CONTRACT)

Decided On June 06, 2016
M/S. Federal House Construction Co-Operative Society Ltd. Appellant
V/S
The Commercial Tax Officer (Works Contract) Respondents

JUDGEMENT

(1.) Petitioner is a Society registered under the Co -operative Societies Act. Petitioner challenges the assessment orders made under Section 25(1) of the KVAT Act, 2003, in respect of assessment years 2010 -2011 and 2011 -2012. The orders were preceded by a notice dated 21/10/2015 wherein it was stated that in an earlier notice issued proposing to complete the assessment for the respective years, certain material mistakes were noticed and accordingly, revised notice had been issued.

(2.) The main contention urged by the petitioner is that the 1st respondent levied tax on the total contract receipts at 12.5% after deducting sub contract proved with Form 20H and labour charges allowed as per Rule 10(2)(b) of the KVAT Rules. Such a view had been taken on the ground that the assessee had not opted to pay tax at compounded rate. According to the petitioner, the building is constructed by the assessee and the transfer takes place only when the building is registered and transferred to the member. Until such time, parties are bound only by an agreement for sale. That apart, the petitioner is not executing any work as the entire construction is awarded to contractors and therefore, the petitioner does not come under the purview of the Act. It is further contended that the petitioner happened to take registration under the Act in March, 2008 at the instance of the Officers of the Department.

(3.) Further, it is contended that, from 2008 onwards, petitioner used to pay tax at compounded rate. When notice was received stating that the petitioner has not opted for payment of tax by filing compounding application, petitioner had filed a consolidated reply on 11/1/2016 indicating that some more time may be granted, if it is found that petitioner has not opted for the compounding facility.