Gift City Tasteful Two & Three BHK Launch offer by Grade a Builder

The Hon’ble Supreme Court did not decide the legal issue arising out of the High Court order. However, the matter was to be decided by the appellate authorities on facts. Therefore, it appears that the issue in the Assonet’s case will be a prolonged legal battle In case of Agreements for Sale’ where land is conveyed by the landowner and the constructed portion is conveyed by the Developer to the Purchaser, the issue relating to Gift City News of such transactions under the tax law arises. Land being an immovable property is not liable for payment of sales tax. However, when the Developer agrees to construct on behalf of the Purchaser the liability to pay tax can arise as held by the Hon’ble Supreme Court in the K Rahejas’ case. It must be noted that, when constructions are carried out through independent contractors on behalf of the Developer, the contractors will as well as be liable for payment of works contract tax. A situation can as well as be visualized wherein the Developer himself can act as a contractor.

In this situation, the department has been construing the Developer in dual capacity a Contractor and b Owner/Builder and subjecting such transactions to tax. In this scenario, the department has been subjecting such Developers to tax on the contract values, while the stamp duty is normally paid on the land and building conveyed to the prospective buyer In the above two scenarios the law laid down by the Humble Supreme Court in the case of Hindustan Shipyard Ltd vs. State of Andhra Pradesh 119 STC 533 is very relevant. Gift City Latest Update Humble Supreme Court had an occasion to interpret the difference between a works contract and a transaction of sale as under: The appellant the builder, engaged in the activity of building ships for different ship owners, entered into contracts agreeing with the owners to build, launch, fit, equip, test and complete in all respects a specified number of vessels at its shipyard and to deliver them. The building of the vessels was to be under the instructions and test of classification surveyors and in accordance with plans and specifications. The builder had to furnish all labour, machinery, materials, equipment, spare parts and outfit required for the construction of the vessels to make them completely ready.

The price of each vessel was fixed but was to be paid in instalments at different stages. Before the vessel was delivered trial runs had to be made after notice to the owners. The contract provided that after successful trial test the owner shall accept the vessel. Title and risk of the vessel was to pass to the owner upon acceptance when delivery was affected and until such delivery the vessel and equipment thereof were at the entire risk of the builder. Delay in payments of the instalments of the price beyond a certain period entitled the builder to rescind the contract and refund the instalments already paid. Article 15 of the contract provided that the vessel as constructed, the engines, boilers, and machinery at all times became the property of the owner immediately after payment of the first instalment, and the owner, to the extent of the payments made by him, had a right to mortgage his interest in the materials for obtaining loans. Article 16 provided that in the event of the builder defaulting in the construction of the vessel – the owner could at his option take possession of the vessel and enter into contract with other developer to complete the vessel.