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M/S K. Raheja Development Corporation vs State Of Karnataka on 5 May, 2005 cites

Mittal Investment Corporation vs Additional Commissioner Of Commercial ... on 24 September, 1999

In this view of the matter, the Judgment of the High Court to the extent that it confirms with the above-mentioned view stands confirmed. We do not approve the observations in Mittal Investment Corporation's case (supra) which are contrary to the view expressed above. As on the main aspects we agree with the High Court Judgment, we see no reason to interfere.
Karnataka High Court Cites 37 - Cited by 5 - Full Document

Commissioner Of Income-Tax Bombay Etc vs Podar Cement Pvt. Ltd. Etc on 27 May, 1997

In support of this submission, he relied upon the Judgments of this Court in the cases of C.I.T. vs. Podar Cement Ltd. reported in (1992) 5 SCC 482 and Mysore Minerals Ltd. vs. C.I.T. reported in (1999) 7 SCC 106. In these cases, in the context of the Income Tax Act, it has been held that even though there is no formal conveyance the concerned party could be considered to be the beneficial owner. Mr. Mehta submitted that an owner cannot be said to carrying on a works contract on behalf of others. Mr. Mehta next submitted that in any event the Appellants did not undertake any works contract for and on behalf of the intended purchasers. He submitted that the Appellants were themselves developing the property and selling flats or commercial complexes in that property. He submitted that in such type of activities no works contract was involved. Mr. Mehta submitted that in the Agreements with the intended purchasers there was a clause which provides that if all payments are not made then amounts paid can be forfeited and the agreement rescinded. He submitted that a person carrying out a works contract would have no right to forfeit or rescind the contract itself. He submitted that such a clause indicates that the Agreements are not agreements to carry out a works contract. On the other hand, Mr. Hegde submitted that the definition of a `works contract' in the said Act is an inclusive definition which is very wide. He submitted that any agreement wherein party has agreed to construct or build for cash, deferred payment or other valuable consideration would be covered by the definition of the term `works contract' as used in the said Act. In support of his submission he relied upon the Agreements entered into by the Appellants with the various purchasers and submitted that these Agreements indicate that the Appellants are undertaking the construction of the building and the flats for and on behalf of the purchasers and that the same is for valuable consideration to be paid in a differed manner. He submitted that except to the extent that the Appellants retain certain commercial premises or flats for themselves, the work carried out pursuant to such Agreements would amount to a `works contract'. He submitted that the Appellants are liable to pay turnover tax on the transfer of property in goods involved in such works contract. We have heard the parties, perused the various documents and considered the cases cited at the bar. As has been rightly submitted by Mr. Hegde the definition of the term `works contract' in the said Act is an inclusive definition. It does not include merely a works contract as normally understood. It is a wide definition which includes "any agreement" for carrying out building or construction activity for cash, deferred payment or other valuable consideration. The definition does not make a distinction based on who carries on the construction activity. Thus even an owner of the property may also be said to be carrying on a works contract if he enters into an agreement to construct for cash, deferred payment or other valuable consideration. We, therefore, do not need to go into the question whether the Appellants are owners as even if the Appellants are owners to the extent that they have entered into Agreements to carry out construction activity on behalf of somebody else for cash, deferred payment or other valuable consideration, they would be carrying out a works contract and would become liable to pay turnover tax on the transfer of property in the goods involved in such works contract. Further under the said Act there is no distinction between construction of residential flats or commercial units. Thus, a works contract, within the meaning of the term in the said Act, can also be for construction of commercial units. For the purposes of considering whether an agreement amounts to a works contract or not, the provisions of the Karnataka Ownership Flats (Regulation of Promotion of Construction, Sales, Management and Transfer) Act, 1974 will have no relevance. However as Mr. Mehta has argued on this aspect we record that reliance of the Judgments in Podar Cement Ltd. and Mysore Minerals Ltd. cases (supra) are of no assistance to the Appellants. Those are cases under the Income Tax Act. Those cases lay down that the term `owner' must be given an interpretation in the context of the provisions of the Act. If that rational was to be applied then in the context of the Karnataka Sales Tax Act, the Appellants would not be owners as admittedly they do not have any registered sale-deeds in their hand. The Agreement relied upon by Mr. Mehta between the Appellants and the owners of the land is nothing but a development Agreement. Pursuant to such an Agreement, plan would be get sanctioned in the name of the owner of the property. It would be the owner of the property who would then execute a conveyance directly to the society of purchasers. All that the Appellants have is a possessary interest and a right to construct. Such rights do not constitute the person an owner of the property. To consider whether the Appellants are executing works contract one needs to look at a typical Agreement entered into with the purchaser. The relevant clauses are clause (q), (r) of the recitals and clauses 1, 5(c) and 7, which read as follows:
Supreme Court of India Cites 55 - Cited by 654 - K Venkataswami - Full Document

Mysore Minerals Ltd., M.G. Road, ... vs Commissioner Of Income Tax, Karnataka, ... on 1 September, 1999

In support of this submission, he relied upon the Judgments of this Court in the cases of C.I.T. vs. Podar Cement Ltd. reported in (1992) 5 SCC 482 and Mysore Minerals Ltd. vs. C.I.T. reported in (1999) 7 SCC 106. In these cases, in the context of the Income Tax Act, it has been held that even though there is no formal conveyance the concerned party could be considered to be the beneficial owner. Mr. Mehta submitted that an owner cannot be said to carrying on a works contract on behalf of others. Mr. Mehta next submitted that in any event the Appellants did not undertake any works contract for and on behalf of the intended purchasers. He submitted that the Appellants were themselves developing the property and selling flats or commercial complexes in that property. He submitted that in such type of activities no works contract was involved. Mr. Mehta submitted that in the Agreements with the intended purchasers there was a clause which provides that if all payments are not made then amounts paid can be forfeited and the agreement rescinded. He submitted that a person carrying out a works contract would have no right to forfeit or rescind the contract itself. He submitted that such a clause indicates that the Agreements are not agreements to carry out a works contract. On the other hand, Mr. Hegde submitted that the definition of a `works contract' in the said Act is an inclusive definition which is very wide. He submitted that any agreement wherein party has agreed to construct or build for cash, deferred payment or other valuable consideration would be covered by the definition of the term `works contract' as used in the said Act. In support of his submission he relied upon the Agreements entered into by the Appellants with the various purchasers and submitted that these Agreements indicate that the Appellants are undertaking the construction of the building and the flats for and on behalf of the purchasers and that the same is for valuable consideration to be paid in a differed manner. He submitted that except to the extent that the Appellants retain certain commercial premises or flats for themselves, the work carried out pursuant to such Agreements would amount to a `works contract'. He submitted that the Appellants are liable to pay turnover tax on the transfer of property in goods involved in such works contract. We have heard the parties, perused the various documents and considered the cases cited at the bar. As has been rightly submitted by Mr. Hegde the definition of the term `works contract' in the said Act is an inclusive definition. It does not include merely a works contract as normally understood. It is a wide definition which includes "any agreement" for carrying out building or construction activity for cash, deferred payment or other valuable consideration. The definition does not make a distinction based on who carries on the construction activity. Thus even an owner of the property may also be said to be carrying on a works contract if he enters into an agreement to construct for cash, deferred payment or other valuable consideration. We, therefore, do not need to go into the question whether the Appellants are owners as even if the Appellants are owners to the extent that they have entered into Agreements to carry out construction activity on behalf of somebody else for cash, deferred payment or other valuable consideration, they would be carrying out a works contract and would become liable to pay turnover tax on the transfer of property in the goods involved in such works contract. Further under the said Act there is no distinction between construction of residential flats or commercial units. Thus, a works contract, within the meaning of the term in the said Act, can also be for construction of commercial units. For the purposes of considering whether an agreement amounts to a works contract or not, the provisions of the Karnataka Ownership Flats (Regulation of Promotion of Construction, Sales, Management and Transfer) Act, 1974 will have no relevance. However as Mr. Mehta has argued on this aspect we record that reliance of the Judgments in Podar Cement Ltd. and Mysore Minerals Ltd. cases (supra) are of no assistance to the Appellants. Those are cases under the Income Tax Act. Those cases lay down that the term `owner' must be given an interpretation in the context of the provisions of the Act. If that rational was to be applied then in the context of the Karnataka Sales Tax Act, the Appellants would not be owners as admittedly they do not have any registered sale-deeds in their hand. The Agreement relied upon by Mr. Mehta between the Appellants and the owners of the land is nothing but a development Agreement. Pursuant to such an Agreement, plan would be get sanctioned in the name of the owner of the property. It would be the owner of the property who would then execute a conveyance directly to the society of purchasers. All that the Appellants have is a possessary interest and a right to construct. Such rights do not constitute the person an owner of the property. To consider whether the Appellants are executing works contract one needs to look at a typical Agreement entered into with the purchaser. The relevant clauses are clause (q), (r) of the recitals and clauses 1, 5(c) and 7, which read as follows:
Supreme Court of India Cites 15 - Cited by 394 - R C Lahoti - Full Document
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