Indian Kanoon - Search engine for Indian Law

10. Being aggrieved by the aforesaid demands separately under the Commercial Tax Act and Entry Tax Act, revisions were filed before the Revisional Authority inter alia on the ground that the BOT contract is such that it does not satisfy all the elements of sale because there is no transfer of property in the goods and there is no payment of sale consideration by the State of M.P. Respondent No.3 did not agree with the aforesaid submission of the petitioner and upheld the order of Assessment Officer by holding that the BOT contract awarded to the petitioner is in the nature of works contract hence, the present petition before this Court.

Submissions of the petitioner

11. Shri P.M. Choudhary, learned senior counsel appearing for the petitioner argued that the learned authorities have wrongly held that the BOT contract is a works contract, whereas there is a vast difference between both the contracts. In a normal works contract, the Government pays the contract money to the contractor for the construction of any building for civil work and after construction, the same is liable to be NEUTRAL CITATION NO. 2024:MPHC-IND:28981

Appreciation and conclusion by us

18. At the very outset, Shri P.M. Choudhary, learned senior counsel for the petitioner admitted that if the BOT contract awarded to the petitioner is in the nature of the works contract, then certainly the petitioner was liable to pay the commercial tax under the Commercial Tax Act as well as the Entry Tax Act. Therefore, the only issue which requires consideration is whether the BOT contract is a works contract or not the commercial tax under the Commercial Tax Act as well as the Entry Tax Act.

25. It is a settled law that no person has a right to collect a toll or any tax from private persons for using the road. The State Government gave a right to collect the toll to the petitioner from the vehicle passing through the road for a definite period to recover the only cost of construction i.e. the sale amount or the contract value, therefore, the Dy. Advocate General for the State has rightly contended that in this case, the contract amount or sale price is liable to be made to the contractor as a deferred payment by authorizing him to recover the toll tax and except this, there is no difference in the work done under the BOT scheme and in the normal works contract. This issue has been considered in detail by the Full Bench of this Court in the matter of Viva Highways (supra) before the Apex Court in which it has been held that the works contract means an agreement must be in writing, it must be executed of any work related to the construction, repair or maintenance of any building, superstructure or other amenities mentioned in the definition. Any agreement by whatever name is called, if it falls within the meaning of a definition of works contract as per the definition of 1983 it must be treated as the works contract. Para 42 to 55 of Viva Highways (supra) are reproduced below: