HC dismisses suit filed under Code of Civil Procedure, 1908 by Builder to seek reimbursement of VAT charges payable towards construction of building from the owner of property; Notes that in terms of the collaboration agreement, owner was not liable for payment of VAT, as the agreement clearly pinned the responsibility of paying all statutory taxes/dues on the Builder; Observes, it was Builder’s responsibility to demolish the entire structure, develop, construct and build the whole building, and acquisition of ownership rights by undertaking construction shows that the agreement was not a contract for rendering services to the owner, hence Builder cannot pass on his responsibility and fasten same on the owner;
HC holds that the construction was undertaken by Builder on his own behalf and not on behalf of the owner, and this is not a case of ‘works contract’ u/s 2(zo) of Delhi VAT Act, 2004, while stating that, “entire amount required or payable for carrying out construction, development, completion” was wholly on account of the Builder and VAT amount would be covered clearly under the terminology “statutory and other fees” as contained under the collaboration agreement; Remarks that, VAT charges relate to construction period and not thereafter, therefore, VAT is clearly not the responsibility of the owner, further states that legal notice and suit filed thereafter appear to be a result of deliberate misinterpretation of collaboration agreement: Delhi HC
Citation: [TS-68-HC-2018(DEL)-VAT]