- 1 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2026 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE MR. JUSTICE K. V. ARAVIND SALES TAX REVISION PETITION No.181 OF 2018 C/W REVIEW PETITION No.403 OF 2025 REVIEW PETITION No.404 OF 2025 REVIEW PETITION No.405 OF 2025 SALES TAX APPEAL No.133 OF 2012 SALES TAX APPEAL No.8 OF 2022 SALES TAX APPEAL No.9 OF 2022 SALES TAX APPEAL No.10 OF 2022 SALES TAX APPEAL No.13 OF 2022 SALES TAX APPEAL No.14 OF 2022 SALES TAX APPEAL No.15 OF 2022 SALES TAX APPEAL No.16 OF 2022 SALES TAX APPEAL No.17 OF 2022 SALES TAX REVISION PETITION No.182 OF 2018 SALES TAX REVISION PETITION No.25 OF 2019 SALES TAX REVISION PETITION No.49 OF 2019 SALES TAX REVISION PETITION No.71 OF 2019 SALES TAX REVISION PETITION No.72 OF 2019 SALES TAX REVISION PETITION No.73 OF 2019 SALES TAX REVISION PETITION No.74 OF 2019 SALES TAX REVISION PETITION No.75 OF 2019 Digitally signed by NANJUNDACHARI Location: HIGH COURT OF KARNATAKA - 2 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS SALES TAX REVISION PETITION No.76 OF 2019 SALES TAX REVISION PETITION No.77 OF 2019 SALES TAX REVISION PETITION No.1 OF 2020 SALES TAX REVISION PETITION No.4 OF 2020 SALES TAX REVISION PETITION No.5 OF 2020 SALES TAX REVISION PETITION No.6 OF 2020 SALES TAX REVISION PETITION No.18 OF 2020 SALES TAX REVISION PETITION No.2 OF 2022 IN STRP No. 181/2018 BETWEEN: 1. THE STATE OF KARNATAKA, REPRESENTED BY THE SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU 560001. …PETITIONER (BY SRI ADITYA VIKRAM BHAT, AGA) AND: 1. M/S VASWANI ESTATES DEVELOPERS PRIVATE LIMITED, VASWANI VICTORIA, No.30, VICTORIA ROAD, BENGALURU 560047. …RESPONDENT (BY SRI T. SURYA NARAYANA, SENIOR ADVOCATE FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT., 2003 AGAINST THE JUDGMENT DATED 28.04.2017 PASSED IN STA.Nos.971 TO 1006/2011 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, PARTLY ALLOWING THE APPEALS AND UPHOLDING THE RECTIFICATION ORDER DATED - 3 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 19.10.2010 PASSED BY ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES [ENFORCEMENT]-14, SOUTH ZONE, BENGALURU UNDER SECTION 69[1] R/W SECTION 39[1] OF THE ACT FOR 12 TAX PERIODS FROM APRIL 2006 TO MARCH-2007, 12 TAX PERIODS FROM ARPIL 2007 TO MARCH-2008 AND 12 TAX PERIIODS FROM APRIL 2008 TO MARCH-2009. IN RP No. 403/2025 BETWEEN: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE)-1, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KARNATAKA, GANDHINAGAR, BANGALORE 560001. 2. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.1 DGSTO-1, YESHWANTHPURA, BENGALURU-560022. 3. THE UNDER SECRETARY FINANCE DEPARTMENT (C.T-1), KARNATAKA GOVERNMENT SECRETARIAT, VIDHANA SOUDHA, BENGALURU-560001. ...PETITIONERS (BY SRI ADITYA VIKRAM BHAT, AGA) AND: 1. FORTIOUS INFRA DEVELOPER LLP., LEVEL FOUR, RAHEJA PARAMOUNT, 138/9, RESIDENCY ROAD, RICHMOND CIRCLE, BENGALURU-560025. (REPRESENTED BY SRI GOPIKRISHNAN K. Y., PARTNER OF M/S FORTIOUS INFRA DEVELOPERS LLP). ...RESPONDENT - 4 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS (BY SRI RAGHAVENDRA C. R., ADVOCATE) THIS REVIEW PETITION IS FILED UNDER SECTION 114 R/W ORDER 47 RULE 1 OF CPC 1908, PRAYING TO REVIEW THE ORDER DATED 02.04.2025 PASSED IN STA No.18/2022 (T-RES). IN RP No. 404/2025 BETWEEN: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE)-1, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KARNATAKA, GANDHINAGAR, BANGALORE 560001. 2. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.1, DGSTO-1, YESHWANTHPURA, BENGALURU 560022. 3. THE UNDER SECRETARY, FINANCE DEPARTMENT (C.T-1), KARNATAKA GOVERNMENT SECRETARIAT, VIDHANA SOUDHA, BENGALURU 560001. …PETITIONERS (BY SRI ADITYA VIKRAM BHAT, AGA) AND: 1. M/S. FORTIOUS INFRADEVELOPERS LLP, LEVEL FOUR, RAHEJA PARAMOUNT, 138/9, RESIDENCY ROAD, RICHMOND CIRCLE, BENGALURU 560025. (REPRESENTED BY SRI GOPIKRISHNAN K.Y., - 5 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS PARTNER OF M/S. FORTIOUS INFRADEVELOPERS LLP). …RESPONDENT (BY SRI RAGHAVENDRA C. R., ADVOCATE) THIS REVIEW PETITION IS FILED UNDER ORDER 47 RULE 1 R/W SECTION 114 of CPC, PRAYING TO REVIEW THE ORDER DATED 02.04.2025 PASSED IN STA No.20/2022 IN THE INTEREST OF JUSTICE AND EQUITY. IN RP No. 405/2025 BETWEEN: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE)-1, DEPARTMENT OF COMMERCIAL TAXES, GOVERNMENT OF KARNATAKA, GANDHINAGAR, BANGALORE 560001. 2. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-1.1, DGSTO-1, YESHWANTHPURA, BENGALURU 560022. 3. THE UNDER SECRETARY FINANCE DEPARTMENT (C.T-1), KARNATAKA GOVERNMENT SECRETARIAT, VIDHANA SOUDHA, BENGALURU 560001. ...PETITIONERS (BY SRI ADITYA VIKRAM BHAT, AGA) AND: 1. M/S. FORTIOUS INFRADEVELOPERS LLP, LEVEL FOUR, RAHEJA PARAMOUNT, 138/9, RESIDENCY ROAD, RICHMOND CIRCLE, BENGALURU 560025. - 6 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS (REPRESENTED BY SRI GOPIKRISHNAN K.Y., PARTNER OF M/S. FORTIOUS INFRADEVELOPERS LLP). ...RESPONDENT (BY SRI RAGHAVENDRA C. R., ADVOCATE) THIS REVIEW PETITION IS FILED UNDER SECTION 114 R/W ORDER 47 RULE 1 OF CPC, PRAYING TO REVIEW THE ORDER DATED 2.04.2025 PASSED IN STA No.19/2022 IN THE INTEREST OF JUSTICE AND EQUITY. IN STA No.133/2012 BETWEEN: 1. MOHAN LAL JINDAL, SINCE DEAD BY HIS LRS, 1(a) MR. SUSHIL KUMAR JINDAL, S/O. LATE MOHANLAL JINDAL, AGED ABOUT 57 YEARS, R/AT No.17, LAXMI ROAD, SHANTINAGAR, BANGALORE - 560017. 1(b) MRS. AMRITA AGARWAL, D/O. LATE MOHANLAL JINDAL, AGED ABOUT 66 YEARS, R/AT H. No.1191, JUBILEE HILLS, ROAD No.59, SHAIKPET, HYDERABAD - 500033. 1(c) MRS. DIMPLE BAJAJ, D/O. LATE MOHANLAL JINDAL, AGED ABOUT 50 YEARS, R/AT FLAT No.S3/S4, 2ND FLOOR, A BLOCK, LANDMARKS TOWN HALL, APTS, 69/71, MC NICHOLS ROAD, CHETPET, CHENNAI - 600031. - 7 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 2. AVINASH PRABHU, S/O. PETER PRABHU, AGED ABOUT 49 YEARS, RESIDING AT No.880, CMC MAHADEVAPURA, BENNINGANAHALLI POPST, NEST TO RAILWAY FLYOVER, K.R. PURAM, BENGALURU 560 049. ...APPELLANTS (BY SRI. G. SRIDHAR, ADVOCATE) AND: 1. ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES ZONE III, VTK I, GANDHINAGAR, BANGALORE 560 009. 2. DEPUTY COMMISSIONER OF COMMERCIAL TAXES VTK 2, 5TH FLOOR, KORAMANGALA, BANGALORE 560047. ...RESPONDENTS (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 64(1) OF KARNATAKA VALUE ADDED TAX ACT, AGAINST THE ORDER DATED 17.8.2012 PASSED IN ZAC-III/SMR/KVAT/CR-11/12 ON THE FILE OF ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE)-3, VTK-1, BANGALORE, SETTING ASIDE THE ORDER PASSED BY AA AND FAA, REMITTING THE MATTER TO A.A. FOR CONCLUDING FRESH REASSESSMENTS IN LIGHT OF THE DISCUSSION MADE IN THE COURSE OF THE ORDER FOR THE TAX PERIODS APRIL 2006 TO MARCH 2007. IN STA No.8/2022 BETWEEN: 1. M/S H. M. INFRATECH PVT. LTD., No.14, H. M. GENEVA HOUSE, - 8 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS CUNNINGHAM ROAD, BENGALURU - 560 052, (REPRESENTED BY ITS DIRECTOR SRI MAHEBOOBJUSAB SIWANI) ...APPELLANT (BY SRI ATUL KRISHNA RAO ALUR, ADVOCATE) AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES (ZONE) - 1, 7TH FLOOR, VTK-2, KALIDASA ROAD, GANDHINAGAR, BANGALORE - 09. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 66(1) OF THE KVAT ACT, 2003 AGAINST THE ORDER DATED 25.02.2022 PASSED IN No.ZAC-1/BNG/KVAT/SMR-25/2020-21 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES ZONE-I, GANDHINAGAR BANGALORE, FILED AGAINST THE RE ASSESSMENT ORDER WAS PASSED UNDER SECTION 39(1) AND 36 AND 72(2) OF THE KVAT ACT 2003, DATED 14.01.2016 BY THE ASSISTANT COMMISSIONER COMMERCIAL TAXES (AUDIT) 1.6, DVO-1, BENGALURU FOR THE TAX PERIODS YEAR 2009-10. IN STA No.9/2022 BETWEEN: 1. M/S H. M. INFRATECH PVT. LTD, No.14, H. M. GENEVA HOUSE, CUNNINGHAM ROAD, BENGALURU - 560 052, (REPRESENTED BY ITS DIRECTOR SRI MAHEBOOB JUSAB SIWANI) ...APPELLANT (BY SRI ATUL KRISHNA RAO ALUR, ADVOCATE) - 9 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE - 1 7TH FLOOR, VANIJYA THERIGE KARYALAYA KALIDASA ROAD, GANDHINAGAR BANGALORE - 09. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 66(1) OF THE KVAT ACT, 2003 AGAINST THE ORDER DATED 25.02.2022 PASSED IN No.ZAC-1/BNG/SMR-26/2020-21 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES ZONE-I, GANDHINAGAR BENGALURU SETTING ASIDE THE RE ASSESSMENT ORDER DATED 26.04.2017 PASSED IN No.JCCT/DV0-1/CTO(A)-1.4/CR-1661/16-17 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAX OFFICER (AUDIT) 1.4, DV0-1, BENGALURU FILED UNDER SECTION 39(1) OF THE KVAT ACT 2003 AND FILED AGAINST THE ORDER DATED 31.12.2020 PASSED IN ZAC-1/BNG/SMT-26/20- 21 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE 1, GANDHINAGAR, BANGALORE FILED UNDER SECTION 64(1) OF THE KVAT ACT 2003 FOR THE TAX PERIODS OF 2010-11. IN STA No.10/2022 BETWEEN: 1. M/S H. M. INFRATECH PVT. LTD., No.14, H. M. GENEVA HOUSE, CUNNINGHAM ROAD, BENGALURU-560052, (REPRESENTED BY ITS DIRECTOR SRI MAHEBOOB JUSAB SIWANI) ...APPELLANT (BY SRI ATUL KRISHNA RAO ALUR, ADVOCATE) - 10 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, (ZONE)-1, 7TH FLOOR VTK-2, KALIDASA ROAD, GANDHINAGAR, BANGALORE-9. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 66(1) OF KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER DATED 25.02.2022 PASSED IN ORDER No.ZAC- 1/BNG/SMR-27/2020-21 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-1, GANDHINAGAR, BENGALURU, SETTING ASIDE THE ORDER OF RECTIFICATION DATED 14.07.2017 PASSED IN CAS No.239409539.03 RECTIFYING THE ORDER DATED 28.08.2016, PASSED BY THE COMMERCIAL TAX OFFICER (AUDIT) -1.3, DVO-1, BANGALORE. IN PURSUANCE OF THE ORDER DATED 18.03.2017, PASSED BY THE JCCT APPEAL, SHANTHI NAGAR, BANGALORE IN VAT AP.No.32/15-16 PARTLY ALLOWED THE APPEAL BY MODIFYING THE RE-ASSESSMENT ORDERS AND PENALTY ORDERS DATED 19.02.2015, PASSED UNDER SECTION 39(1) AND 72(2) OF THE KVAT ACT, 2003 RESPECTIVELY BY THE COMMERCIAL TAX OFFICER (AUDIT- 1.3), DVO-1, BANGALORE FOR THE TAX PERIODS FROM APRIL 2011 TO MARCH 2012. IN STA No.13/2022 BETWEEN: 1. M/S STERLING DEVELOPERS PRIVATE LIMITED, No.8, LEVEL 5, PRESTIGE NEBULA, CUBBON ROAD, BENGALURU 560 001, RERPESENTED BY VENKAT RAMANI SASTRI, DIRECTOR. ...APPELLANT (BY SRI SURYA KANTH C. S., ADVOCATE) - 11 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-I, VANIJYA THERIGE KARYALAYA, GANDHINAGAR, BENGALURU 560 009. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 66(1) OF KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER DATED 25.08.2022 PASSED IN ORDER No.ZAC- 1/BNG/SMR-32/2021-22, ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-1, BENGALURU. SETTING ASIDE AND FILED AGAINST THE RE- ASSESSMENT ORDER DATED 15.02.2021 PASSED IN CAS ORDER No.323381057 BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT-1.7) DGSTO-1 YESHWANTHPUR, BANGALORE, UNDER SECTION 39(1) OF THE KVAT ACT, 2003 FOR THE TAX PERIOD FOR APRIL 2017 TO JUNE 2017. IN STA No.14/2022 BETWEEN: 1. M/S STERLING DEVELOPERS PRIVATE LIMITED, No.8, LEVEL 5, PRESTIGE NEBULA, CUBBON ROAD, BENGALURU 560 001, RERPESENTED BY VENKAT RAMANI SASTRI, DIRECTOR. ...APPELLANT (BY SRI SURYA KANTH C. S., ADVOCATE) AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-I, VANIJYA THERIGE KARYALAYA, - 12 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS GANDHINAGAR, BENGALURU 560 009. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 66(1) OF KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER DATED 25.08.2022 PASSED IN ORDER No.ZAC-1/BNG/SMR-30/2021- 22 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-1, GANDHINAGAR, BENGALURU, SETTING ASIDE THE APPEAL AND FILED AGAINST THE REASSESSMENT ODER DATED 15.10.2019 PASSED IN CAS No.324220758 PASSED BY THE ADDITIONAL COMMISSINOER OF COMMERCIAL TAX (AUDIT)-1.1, BENGALURU UNDER SECTION 39(1) OF THE KVAT ACT 2003 FOR THE TAX PERIODS OF APRIL 2015 TO MARCH 2016. IN STA No.15/2022 BETWEEN: 1. M/S STERLING DEVELOPERS PRIVATE LIMITED, No.8, LEVEL 5, PRESTIGE NEBULA, CUBBON ROAD, BENGALURU 560 001. RERPESENTED BY VENKAT RAMANI SASTRI, DIRECTOR. ...APPELLANT (BY SRI SURYA KANTH C. S., ADVOCATE) AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-I, VANIJYA THERIGE KARYALAYA, GANDHINAGAR, BENGALURU 560 009. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) - 13 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS THIS STA IS FILED UNDER SECTION 66(1) OF KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER DATED 25.08.2022 PASSED IN ORDER No.ZAC- 1/BNG/SMR-31/2021-22 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-1, BENGALURU, SETTING ASIDE THE APPEAL AND FILED AGAINST THE REASSESSMENT ODER DATED 15.10.2019 PASSED IN CAS ORDER No.392381045 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT-1.7) DGSTO-1 YESHWANTHPUR, BANGALORE, UNDER SECTION 39(1) OF THE KVAT ACT 2003 FOR THE TAX PERIOD FOR 2016-17. IN STA No.16/2022 BETWEEN: 1. M/S STERLING DEVELOPERS PRIVATE LIMITED, No.8, LEVEL 5, PRESTIGE NEBULA, CUBBON ROAD, BENGALURU 560 001, RERPESENTED BY VENKAT RAMANI SASTRI, DIRECTOR. ...APPELLANT (BY SRI SURYA KANTH C. S., ADVOCATE) AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-I, VANIJYA THERIGE KARYALAYA, GANDHINAGAR, BENGALURU 560 009. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA FILED UNDER SECTION 66(1) OF KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER DATED 25.08.2022 PASSED IN ORDER No.ZAC-1/BNG/SMR-29/2021- - 14 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 22 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-1, GANDHINAGAR, BENGALURU, SETTING ASIDE THE APPEAL AND FILED AGAINST THE REASSESSMENT ORDER DATED 30.01.2019 PASSED IN CAS No.319021019 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT) -1.1, BENGALURU UNDER SECTION 39(1) OF THE KVAT ACT 2003 FOR THE TAX PERIODS OF APRIL 2014 TO MARCH 2015. IN STA No.17/2022 BETWEEN: 1. M/S STERLING DEVELOPERS PRIVATE LIMITED, NO.8, LEVEL 5, PRESTIGE NEBULA CUBBON ROAD, BENGALURU 560 001. RERPESENTED BY VENKAT RAMANI SASTRI, DIRECTOR. ...APPELLANT (BY SRI SURYA KANTH C. S., ADVOCATE) AND: 1. THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-I, VANIJYA THERIGE KARYALAYA, GANDHINAGAR, BENGALURU 560 009. ...RESPONDENT (BY SRI ADITYA VIKRAM BHAT, AGA) THIS STA IS FILED UNDER SECTION 66(1) OF KARNATAKA VALUE ADDED TAX ACT 2003 AGAINST THE ORDER DATED 25.08.2022 PASSED IN ORDER No.ZAC- 1/BNG/SMR-28/2021-22 ON THE FILE OF THE ADDITIONAL COMMISSIONER OF COMMERCIAL TAXES, ZONE-1, GANDHINAGAR, BENGALURU, SETTING ASIDE THE APPEAL AND FILED AGAINST THE REASSESSMENT ODER DATED 30.01.2019 PASSED IN CAS No.309020987 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT) - 15 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 1.1, DGSTO -1, BENGALURU FILED UNDER SECTION 39(1), 36(1) AND 72(2) OF THE KVAT ACT 2003 FOR THE TAX PERIODS OF APRIL 2013 TO MARCH 2014. IN STRP No.182/2018 BETWEEN: 1. THE STATE OF KARNATAKA REPRESENTED BY THE SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU - 560001. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S GOLDEN GATE PROPERTIES LIMITED, No. 820, GOLDEN HOUSE, 80 FEET ROAD, 8TH BLOCK, KORAMANGALA, BENGALURU - 560095 ...RESPONDENT (BY SRI CHETHAN A. C., ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE ORDER DATED 30.10.2017 PASSED IN STA.Nos.604, 605 AND 606/2016 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, PARTLY ALLOWING THE APPEAL AND PARTLY SETTING ASIDE AND PARLY UPHOLDING THE ORDER DATED 17.12.2014 PASSED IN VAT.AP.No.124 TO 135/2014-15, VAT Nos.136 TO 147/2014-15 AND VAT AP.Nos.148 TO 159/2014-15 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERICIAL TAXEX, (APPEALS) GULBARGA, CAMP AT O/O THE JCCT [APPEALS]-4, SHANTHI NAGAR, BENGALORE-27 AND ETC. - 16 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS IN STRP No.25/2019 BETWEEN: 1. THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS)-4, SHANTHINAGAR, BENGALURU-560 027. 2. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-4.5, VAT DIVISION-4, BENGALURU-560 047. ...PETITIONERS (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. BREN CORPORATION, (PREVIOUSLY KNOWN AS SJR ENTERPRISES), BALAVANA,No.61, 1ST CROSS, 5TH BLOCK, ADJACENT TO SUKH SAGAR HOTEL, KORAMANGALA, BENGALURU-560 095. ...RESPONDENT (BY SRI K. KUMARESHAN, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT,2003, AGAINST THE JUDGMENT DATED 20.07.2018 PASSED IN STA No0s.1400 TO 1414/2014 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BANGALORE, PARTLY ALLOWING THE APPEALS AND FILED AGAINST THE ORDER DATED 15.02.2014 PASSED IN VAT.AP 143 TO 145/2013-14 AND VAT.AP Nos.146 TO 157/2013-14 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS-4 ), BANGALORE, DISMISSING THE APPEAL AND UPHOLDING THE ORDER DATED 31.05.2013 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT) 4.5, BANGALORE, AND FOR THE TAX PERIODS - 17 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS OF JANUARY 2011, FEBRUARY 2011 AND MARCH 2011 AND APRIL 2011 TO MARCH 2012. IN STRP No.49/2019 BETWEEN: 1. THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS), MANGALURU. 2. THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT-2) DVO, MANGALORE. ...PETITIONERS (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S SAI RADHA DEVELOPERS (R), III FLOOR, C J COMPLEX, K. M. MARG, UDUPI-576101. ...RESPONDENT (BY SRI M. THIRUMALESH, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 27.08.2018 PASSED IN STA.No.140/2017 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, PARTLY ALLOWING THE APPEAL FILED AGAINST THE ORDER DATED 16.12.2016 PASSED IN KVAT.AP.No.356 TO 367/2014, ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES, (APPEALS) MANGALURU, DISMISSING THE APPEAL AND UPHOLDING THE ORDER DATED 30.09.2014 PASSED IN 29160392192 ON THE FILE OF THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT-2), MANGALURU, FOR THE TWELVE TAX PERIODS (MONTHS) OF THE YEAR 2011-12. - 18 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS IN STRP No.71/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P. KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. VILLALAND DEVELOPERS PRIVATE LIMITED, THE FALCON HOUSE No.01, MAIN GUARD CROSS ROAD, BANGALORE 560001. ...RESPONDENT (BY SRI L. S. KARTHIKEYAN, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUED ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 29.11.2018 PASSED IN STA.No.213/2018 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE APPEAL AND SETTING ASIDE THE ORDER DATED 28.02.2018 PASSED IN VAT.AP.No.60/2016-17 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS)-1 SHANTINAGAR, BENGALURU DISMISSING THE APPEAL AND UPHOLDING THE RE-ASSESSMENT ORDER AND PENALTY ORDER DATED 29.06.2016 UNDER SECTION 39(1) AND 72(2) OF THE KVAT ACT, 2003 BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT)1.7, DVO-1 BENGALURU FOR THE TAX PERIODS OF APRIL 2012 TO MARCH 2013. IN STRP No.72/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALA, - 19 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS P KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S ASTRO BUILDERS & DEVELOPERS, No.117/1, RAKSHITA COMPLEX, SARJAPURA ROAD, BENGALURU-560035. ...RESPONDENT (BY SRI UMESH P. E., ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 19.03.2019 PASSED IN STA.No.1561 TO 1606/2013 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE APPEAL FILED AGAINST THE ORDER DATED 19.02.2013 PASSED IN VAT.AP.Nos.414 TO 459/2011-12 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) GULBARGA CAMP AT O/O THE JCCT (APPEALS)-4, BENGALURU, DISMISSING THE APPEAL AND UPHOLDING THE RE-ASSESSMENT ORDER DATED 09.05.2011 PASSED UNDER SECTION 39(1) R/W SECTION 72(2) AND 36(10) OF KVAT ACT, 2003 BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, (AUDIT) 41, DVO-4, BENGALURU FOR THE TAX PERIODS OF APRIL 2006 TO FEBRUARY 2009, APRIL 2009 TO AUGUST 2009, OCTOBER 2009 TO MARCH 2010. IN STRP No.73/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P. KALINGARAO ROAD, 1ST MAIN ROAD, - 20 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S. ELEGANT PROPERTIES ELEGANT DESIRE, 1ST FLOOR, #1, COLES ROAD, FRAZER TOWN, BENGALURU-560005. ...RESPONDENT (RESERVED SERVED, UNREPRESENTED) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 20.03.2019 PASSED IN STA.No.3362 TO 3373/2013, STA.No.3374 TO 3383/2013, STA.No.3384 TO 3395/2013 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, PARTLY ALLOWING THE APPEALS AND SETTING ASIDE THE ORDER DATED 22.10.2013 PASSED IN JCCT(AM)/DVO-1/SMR/CR-18/2012-13, ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES, (ADMN), BENGALURU ALLOWING THE APPEALS FILED AGAINST THE RE- ASSESSMENT ORDER DATED 02.07.2010 PASSED BY THE ASSISTANT COMMISSIONER OF COMMERCIAL RAXES, AUDIT- 16 VAT DIVISION 1 BENGALURU, UNDER SECTION 39(1) OF THE ACT, LEVYING HIGHER RATE OF TAX, PENALTY AND INTEREST FOR THE PERIODS APRIL 2006 TO MARCH 2007, APRIL 2007 TO MARCH 2008, APRIL 2008 MARCH 2009. IN STRP No.74/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGEKARYALAYA, P KALINGARAO ROAD, - 21 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 1ST MAIN ROAD , GANDHINAGAR, BENGALURU. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. VILLALAND DEVELOPERS PRIVATE LIMITED, THE FALCON HOUSE No.01, MAIN GUARD CROSS ROAD, BANGALORE 560001. ...RESPONDENT (BY SRI L. S. KARTHIKEYAN, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 29.11.2018 PASSED IN STA.No.6/2016 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE APPEAL AND SETTING ASIDE ORDER DATED 31.10.2015 PASSED IN VAT.AP.No.01/2014-15 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS)-1, SHANTINAGAR, BENGALURU, DISMISSING THE APPEAL FILED AGAINST THE RE- ASSESSMENT ORDER DATED 13.03.2015 ON THE FILE OF THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, (AUDIT)1.6 DVO -1, BENGALURU FOR THE TAX PERIODS OF APRIL 2013 TO MARCH 2014. IN STRP No.75/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGEKARYALAYA, P. KALINGARAO ROAD, 1ST MAIN ROAD , GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) - 22 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS AND: 1. M/S KEERTHI ESTATES PVT LIMITED G-1, KEERTHI ORNATTA, C V RAMAN NAGAR ROAD, NAGAVARAPALYA, BENGALURU 560093. ...RESPONDENT (BY SRI NAVEEN KUMAR K. S., ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE ORDER DATED 25.03.2019 PASSED IN STA.No.1687/2014 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE APPEAL SETTING ASIDE THE ORDER DATED 19.03.2014 PASSED IN VAT.AP.No.534 TO 545/13-14 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES, (APPEALS)-5 BENGALURU, THE UPHOLDING ORDER DATED 17.01.2014 PASSED BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, (AUDIT- 5.2) DVO-5, BENGALURU, FOR THE TAX PERIODS APRIL 2011 TO MARCH-2012. IN STRP No.76/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S PURVANKARA PROJECTS LIMITED, No.130/1, - 23 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS ULSOOR ROAD, BENGALURU-560042. ...RESPONDENT (BY SRI THIRUMALESH M., ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT,2003, AGAINST THE JUDGMENT DATED 21.12.2018 PASSED IN STA CROSS APPEALS No.1069 TO 1092/2013 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BANGALORE, DISMISSING THE CROSS APPEALS AND FILED AGAINST THE ORDER DATED 22.02.2012 AND 24.02.2012 PASSED IN VAT.AP.1778 TO 1783/2010-11 AND VAT.AP 1228 TO 1239/2011-12 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS-5 ), BANGALORE, DISMISSING THE APPEAL AND UPHOLDING THE ASSESSMENT ORDER DATED 03.09.2010 AND 30.04.2011 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT) 51, DVO-05, BANGALORE, AND FOR THE TAX PERIODS OF APRIL- 2005 TO SEP-2005, APRIL-2006 TO DEC.2006, JANUARY 2007 TO MARCH-2007. IN STRP No.77/2019 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P. KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S. MANITO BUILDERS No.690, 7TH MAIN, CBI MAIN ROAD, - 24 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS GANGANAGAR, BENGALURU-560032. ...RESPONDENT (BY SRI ATUL K ALUR, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE ORDER DATED 18.12.2018 PASSED IN STA.CROSS APPEAL No.168/2018 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, DISMISSING THE CROSS APPEAL FILED AGAINST THE ORDER DATED 31.12.2015 PASSED IN VAT.AP.No.658 TO 669/14-15 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES, (APPEALS)-5 BENGALURU, PARTLY ALLOWING THE APPEALS AND SETTNG ASIDE THE ASSESSMENT ORDER DATED 09.01.2015 PASSED BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, (AUDIT-5.6), DVO-5, BENGALURU, FOR THE TAX PERIODS APRIL 2012 TO MARCH-2013. IN STRP No.1/2020 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES VANIJYA THERIGE KARYALAYA, P KALINGARAO ROAD, 1ST MAIN ROAD, GANDINAGAR BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. ASHWINI BUILDERS, No.430/B, 10TH CROSS, 21ST MAIN, J P NAGAR, BENGALURU-560078. ...RESPONDENT THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATKA VALUE ADDED TAX ACT, 2003 AGAINST THE - 25 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS JUDGEMENT DATED 28.03.2019 PASSED IN STA.No.2825 TO 2832/2012, 2833 TO 2840/2012 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, PARTLY ALLOWING THE APPEAL AND SETTING ASIDE THE ORDER DATED 18.10.2012 ON THE FILE OF THE JOINT COMMISSION OF COMMERCIAL TAXES, (APPEALS)-3 BENGALURU, PASSED IN VAT.AP.Nos.1754 TO 1776/2011-12 AND THE ASSESSMENT ORDER DATED 02.03.2012 PASSED UNDER SECTION 39(1)(a) OF THE ACT BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, (AUDIT) -36, BENGALURU, FOR THE TAX PERIODS AUGUST -2006 TO MARCH 2007 AND APRIL 2007 TO NOVEMBER 2007 LEVYING TAX, PENALTY AND INTEREST UNDER SEC.36 AND 72(2) OF THE ACT. IN STRP No.4/2020 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P. KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU-560009. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. PURVANKARA PROJECTS LIMITED, No.130/1, ULSOOR ROAD, BENGALURU-560042. ...RESPONDENT (BY SRI THIRUMALESH M., ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 07.02.2019 PASSED IN STA.No.2896 TO 2907/2013, 2908 TO 2919/2013, 2910 TO 2931/2013, 2932 TO 2943/2013 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE APPEAL FILED AGAINST THE ORDER DATED 30.09.2013 PASSED IN - 26 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS VAT.AP.1363 TO 1374/2011-12, VAT.AP.1293 TO 1304/2011- 12 VAT.AP.1375 TO 1386/2011-12 AND VAT.AP.176 TO 187/2012 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS) BENGALURU, DISMISSING THE APPEALS AND UPHOLDING THE ASSESSMENT ORDER DATED 30.04.2011, 09.08.2011, 28.07.2011 AND 08.11.2012 PASSED UNDER SECTION 39(1) OF THE KVAT ACT,2003 AND CONSEQUENTIAL LEVY OF INTEREST AND PENALTY BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT)-51, BENGALURU (HEREIN AFTER REFERRED IN SHORT AS THE AA) FOR THE TAX PERIOD OF APRIL 2007 TO MARCH 2008, APRIL 2008 TO MARCH 2009, APRIL 2009 TO MARCH 2010 AND APRIL 2010 TO MARCH 2011 RESPECTIVELY. IN STRP No.5/2020 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALA, P.KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S NERMITEE CONSTRUCTIONS, 508, 9TH CROSS, SADASHIVANAGAR, BENGALURU-560080. ...RESPONDENT (BY SRI K. M. SHIVAYOGISWAMY, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 01.04.2019 PASSED IN STA No.9/2011 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT - 27 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS BENGALURU, ALLOWING THE APPEAL AND SETTING ASIDE THE ORDER DATED 30.11.2010 PASSED IN VAT.AP.No.1851/2010-11 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS)-1 BENGALURU UNDER SECTION 62(6) OF THE ACT, PARTLY ALLOWING THE APPEAL AND PARTIALLY CONFIRMING THE RE- ASSESSMENT ORDER DATED 28.09.2010 ON THE FILE OF THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (RECOVERY) -21 DVO 2 BENGALURU FOR THE TAX PERIODS APRIL 2006 TO MARCH 2007 LEVYING TAX, PENALTY AND INTEREST UNDER SECTION 36 AND 72(2) OF THE ACT. IN STRP No.6/2020 BETWEEN: 1. THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P. KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S. SUMON ASSOCIATES, No.208, BARON CENTER, 84/1, M.G. ROAD, BANGALORE 560 001. ...RESPONDENT (BY SMT. ANUPARNA BORDOLOI, ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUED ADDED TAX ACT, 2003 AGAINST THE JUDGMENT DATED 25.03.2019 PASSED IN STA.No.871 TO 884/2014 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE APPEAL AND SETTING ASIDE THE ORDER DATED 12.02.2014 PASSED IN VAT.P.No.696 TO 709/10-11 ON THE FILE OF THE JOINT - 28 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS COMMISSIONER OF COMMERCIAL TAXES (APPEAL)-1 BENGALURU AND THE RE-ASSESSMENT ORDER DATED 10.06.2010 PASSED ON THE FILE OF THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (DM-11) BENGALURU FOR THE TAX PERIODS OF APRIL 06, JUNE 06, AUGUST 06, SEPTEMBER 06, OCTOBER 06, NOVEMBER 06, DECEMBER 06, APRIL 07 TO JULY 07, SEPTEMBER 07, OCTOBER 07 AND APRIL 2008. IN STRP No.18/2020 BETWEEN: 1. THE STATE OF KARNATAKA, REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES, VANIJYA THERIGE KARYALAYA, P KALINGARAO ROAD, 1ST MAIN ROAD, GANDHINAGAR, BENGALURU-560001. ...PETITIONER (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. SRI H. S. HARIKRISHNA, PROPRIETOR, M/S GAANA BUILDERS AND DEVELOPERS, No.5, 12TH CROSS, S. P. EXTENSION, MALLESHWARAM, BENGALURU-560003. ...RESPONDENT (VIDE ORDER DATED 30.09.2022 NOTICE TO RESPONDENT IS HELD SUFFICIENT) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT,2003, AGAINST THE JUDGMENT DATED 27.09.2019 PASSED IN STA No.2044/2011 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT - 29 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS BANGALORE, PARTLY ALLOWING THE APPEAL AND CHALLENGING THE ORDER DATED 12.05.2011 PASSED IN VAT.AP.Nos. 1803/10-11 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS-1), BANGALORE, DISMISSING THE APPEAL AND FILED AGAINST THE RE-ASSESSMENT ORDER DATED 14.10.2010 PASSED BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT) 12, DVO-1, BANGALORE, AND FOR THE TAX PERIOD OF SEPTEMBER 2005. IN STRP No.2/2022 BETWEEN: 1. THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES (AUDIT 1.3), DVO-1, YESHWANTHPUR, BANGALORE 560022. 2. THE JOINT COMMISSIONER OF COMMERCIAL TAXES (APPEALS 1), SHANTHINAGAR, BANGALORE-560 027. ...PETITIONERS (BY SRI ADITHYA VIKRAM BHAT, AGA) AND: 1. M/S MILLENNIA VENTURES AND PROJECTS PVT. LTD. No.328/B, 14TH CROSS, 5TH MAIN, SADASHIVANAGAR, BANGALORE-560 008. REP. ITS PROPRIETOR. ...RESPONDENT (BY SMT. VANI H., ADVOCATE) THIS STRP IS FILED UNDER SECTION 65(1) OF THE KARNATAKA VALUE ADDED TAX ACT, 2013 PASSED IN STA.No.275/2018 ON THE FILE OF THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU, ALLOWING THE - 30 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE DATED 31.05.2018 PASSED IN VAT.AP.No.72/2017-18 ON THE FILE OF THE JOINT COMMISSIONER OF COMMERCIAL TAXES, DISMISSING THE APPEAL AND UPHOLDING THE RE- ASSESSMENT ORDER DATED 29.06.2017 PASSED BY THE ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, BENGALURU, FOR THE TAX PERIOD 2013-14. THESE PETITIONS AND APPEALS HAVING BEEN HEARD AND RESERVED FOR ORDER ON 20.02.2026 COMING ON THIS DAY, S.G.PANDIT J., PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE MR. JUSTICE K. V. ARAVIND C.A.V. JUDGMENT (PER: HON'BLE MR. JUSTICE S.G. PANDIT) The above Sales Tax Revision Petitions, Sales Tax Appeals involve common questions of law, hence, heard together with the consent of learned counsel appearing for the parties and disposed of by this common judgment. 2. The Sales Tax Revision Petitions are against the orders passed by the Karnataka Appellate Tribunal, Bengaluru (for short, ‘the Tribunal’); the Sales Tax Appeals are against the orders passed in a suo-motu revision under Section 65 of the Karnataka Value Added Tax Act, 2003 (for - 31 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS short, ‘KVAT Act’) and the Review Petitions are by the Revenue seeking review of judgment dated 02.04.2025 in STA.No.18/2022 C/w. STA.No.19/2022 and STA.No.20/2022 (DB). 3. Since the questions of law in all the above petitions and appeals are identical, at the request of the Bench, learned counsel appearing for the parties formulated common questions of law and submitted that decision on the said common questions of law would govern all the above appeals and petitions. The common questions of law involved in the above appeals and petitions are as follows: “1. Whether a joint development agreement ("JDA") entered into between a landowner and a developer is a works contract taxable under the provisions of the KVAT Act? 2. Whether the transaction/ joint development agreement between the landowner and the developer amounts being a 'barter/exchange' amounts to 'sale' of goods within the definition in section 2(29) of the KVAT Act, 2003? - 32 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 3. Whether the disallowance of exemption of the value of the undivided share of land received from the purchasers of the developer's share of flats, as done by the assessing authority / revisional authority amounts to levy of VAT on immovable property/land, which the State Legislature lacks the power to tax under Entry 54 of List II of the Seventh Schedule of the Constitution of India? 4. Without prejudice, assuming but without admitting that the transaction is indeed a works contract, whether in the absence of a method to value the goods incorporated in the works contract under the KVAT Act and the Rules, the charge fails? 5. Whether under the composition scheme any deductions not contemplated by the statute are permissible?" For the sake of convenience, facts of STRP.No.181/2018 are referred to. 4. The petitioner namely, M/s. Vaswani Estate Developer (P) Ltd., (developer) is a private limited company engaged in the business of development, construction, execution of works contracts for residential apartments and sale thereof. - 33 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 5. A proposition notice under Section 39(1) of KVAT Act dated 01.06.2010 was issued by the Adjudicating Authority proposing reassessment on the ground that the total and taxable turnover, pertaining to the value of goods used in the execution of works contracts and the value of goods relating to the land owners’ share of flats in pursuance to the Joint Development Agreement (JDA) had not been correctly and fully disclosed by the dealer. Questioning the said proposition notice, the dealer approached this Court by way of writ petition which was withdrawn. Subsequent to withdrawal of writ petition, the dealer filed objections to the proposition notice and the Adjudicating Authority rejected the objections, confirmed the proposal and proceeded to demand tax as well as levied penalty and interest. Once again aggrieved by the said order, the dealer was before this Court in writ petition, which was also withdrawn to file an application under Section 39(1) of the KVAT Act seeking clarification. The said rectification application was allowed partly, allowing certain - 34 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS deductions. Questioning the partial rejection of the rectification application by order dated 19.10.2010, the dealer preferred appeal before the Tribunal and against the order of the Tribunal the present Revision Petitions. 6. Heard learned Additional Government Advocate Sri.Aditya Vikram Bhat for Revenue, learned senior counsel Sri.T.Surya Narayana for learned counsel Smt.Tanmayee Rajkumar, learned counsel Sri.Raghavendra.C.R., learned counsel Sri. G.Sridhar, Sri.Atul Krishna Rao Alur, learned counsel Sri.Surya Kanth.C.S., learned counsel Sri.Chethan.A.C., learned counsel Sri.K.Kumareshan, learned counsel Sri.M.Thirumalesh, learned counsel Sri L.S.Karthikeyan, learned counsel Sri.Umesh.P.E., learned counsel Sri.Naveen Kumar.K.S., learned counsel Sri.K.M.Shivayogiswamy, learned counsel Smt.Anuparna Bordoloi and learned counsel Smt.Vani.H., Perused the entire papers. 7. Learned Additional Government Advocate contends that the taxable turnover shall include the value of - 35 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS all the flats constructed by the dealer/developer and cost of the land cannot be excluded from the taxable turnover. It is submitted that the dealer opted for the Composition Scheme, as such, question of adjudicating or excluding land cost would not arise. Learned Additional Government Advocate invites attention of this Court to Sub-Section (29) of Section 2 of the KVAT Act, the definition of sale and submits that it includes works contracts and construction activities and that a sale may be for any valuable consideration. Learned Additional Government Advocate further contends that JDA is a works contract and the transfer of an undivided right in the land in favour of the builder or its nominee/agent is for consideration, as the land owner, for the said transfer of land would receive proportionate built-up area which shall be the consideration. Therefore, it is submitted that land cost forms part of the turnover and the dealer cannot seek deduction of the said land cost. - 36 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 8. Learned Additional Government Advocate further submits that the dealer having opted for the composition scheme is liable to pay tax by way of a fixed composition amount in lieu of regular tax, without claiming any deductions, except the deductions expressly permitted under Sub-Section (5) of Section 15 of the KVAT Act, which would not include deduction towards the cost of land. 9. Learned Additional Government Advocate would submit that it is an admitted fact that JDA exists between dealer/developer and the land owner. It is further submitted that the developer has executed works contract for the land owner by transferring goods in the course of construction of apartments, and as consideration land owner through General Power of Attorney (GPA) has authorized developer to receive the consideration from the flat buyers by way of sale of proportionate undivided share in the land. It is further contended that for the transfer of goods involved in the construction of apartments for the land owner, the developer has in effect received works contracts - 37 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS consideration from the buyers, as such, receipts should be included in the taxable turnover, by treating it as land cost. 10. Per contra, learned senior counsel Sri.T.Suryanarayana with Smt.Tanmayee Rajkumar, learned counsel for the respondent/assessee would submit that JDA entered into between the land owner and the developer at any stretch of imagination cannot be considered as works contract and placing reliance on LARSEN AND TOUBRO LIMITED., VS. STATE OF KARNATAKA1 submits that the State had conceded that a JDA is not a works contract. Further, learned senior counsel would submit that the works contract is between the developer and the purchasers of flat. It is submitted that developer receives consideration towards the cost of construction and the value of the undivided share in the land, whereas in a JDA there is no element of sale of goods involved in the execution of a works contract, as the transaction essentially pertains to the transfer of immovable property. Learned senior counsel 1 (2015) 1 SCC 708 - 38 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS invites attention to Circular No.121/2009-10 dated 07.12.2009 which treated JDA as works contract, which has no statutory force to impose tax liability and further submits that prior to the said circular, JDA was not treated as works contract. It is further contended that, the KVAT Act permits levy on the sale of goods as defined under Section 2(29) of KVAT Act which requires a transfer of property in goods for cash or other valuable consideration in the course of execution of a works contract. It is specifically contended that under JDA, it is sale or exchange of an undivided share in land, consideration being the share in the built-up area in the construction by the developer, therefore, it could be at the best would be sale/exchange of immovable property. 11. Learned senior counsel referring to Section 2(29) as well as Section 2(37) of KVAT Act submits that sale as well as works contract are defined separately and every agreement for construction of a building would not necessarily amount to works contract. Normally under JDA, the developer would not undertake any work for the land - 39 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS owner. Therefore, it is submitted that JDA is an agreement for the sale of immovable property and not for execution of a works contract. Further, learned senior counsel would submit that the transaction between the developer and land owner at the best could be considered as barter or exchange but not a sale. It is submitted that the word “supply” under the provisions of the Goods and Services Act, 2017 (for short, ‘GST Act’) expressly includes transactions by way of barter and exchange. To consider it as a sale, there is no monetary consideration. Again referring to Section 2(29) of the KVAT Act and the words “other valuable consideration” appearing in the said Section, submits that it is to be understood in the context of monetary payments and cannot include transactions in the nature of exchange or barter and in that regard, reliance is placed on the decisions in DEVI DASS GOPAL KRISHNAN VS. STATE OF PUNJAB2 and SALE TAX COMMISSIONER, W.P., VS. RAM KUMAR AGARWAL3. 2 (1967) 20 STC 430 3 (1967) 19 STC 400 - 40 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 12. Learned senior counsel would also question the competence of the State to levy the tax on land by submitting that it is beyond the State’s power as conferred under Entry 54 of List-II of the Seventh Schedule to the Constitution of India. It is submitted that it is impermissible to levy tax on the transfer of immovable property by treating it as a works contract. Learned senior counsel lastly submits that KVAT Act would not provide for any mechanism for the valuation of the goods involved in the execution of a works contract and as such, charging provision cannot be given effect to. It is submitted that the mechanism for computation must be expressly provided along with the charging section and it cannot be supplemented by executive instructions. Learned senior counsel would submit that in the instant case as the charge and mechanism for computation are through a Circular, it lacks statutory force. In that regard, he places reliance on the decision of the Hon'ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, - 41 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS KERALA VS. LARSEN AND TOUBRO LIMITED4 and DHINGRA JARDINE INFRASTRUCTURE (P.) LTD., VS. STATE OF HARYANA5. 13. Sri.Atul K. Alur, learned counsel appearing for assessee in STA.No.8/2022, STA.No.9/2022 and STA.No.10/2022 submitted that though initially JDA is entered into, the entire extent of land is purchased by the developer subsequently. Further, he contends that cost of land cannot be included in the taxable turnover. 14. Sri.Sridhar, learned counsel appearing in STA.No.133/2012 submits that, Revisional Authority without any basis reversed the reassessment order. Further, he contends that valuable consideration must necessarily involve monetary payment and the transfer of land in exchange for a share in the built-up area amounts to barter or exchange and would not fall within sale under KVAT Act. 4 (2016) 1 SCC 170 5 (2017) 78 Taxmann.Com 6 (Punjab and Haryana) - 42 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 15. We have given our thoughtful consideration to the submissions of the learned counsel appearing for the parties and perused the entire material on record. 16. The relevant provisions which are germane for the determination of the issue involved in the above appeals and petitions are as follows: Section 2(29) of the KVAT Act “(29) 'Sale' with all its grammatical variation and cognate expressions means every transfer of the property in goods (other than by way of a mortgage, hypothecation, charge or pledge) by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration and includes, - (a) a transfer otherwise than in pursuance of a contract of property in any goods for cash, deferred payment or other valuable consideration; (b) a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; - 43 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS (c) a delivery of goods on hire purchase or any system of payment by installments; (d) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. Explanations.- (1) A transfer of property involved in the sale or distribution of goods by a society (including a co-operative society), club, firm, or any association to its members, for cash, or for deferred payment or other valuable consideration, whether or not in the course of business, shall be deemed to be a sale for the purposes of this Act. (2) Every transaction of sale by way of or as a part of any service or in any other manner whatsoever, of goods, being food or any other article of human consumption or any drink (whether or not intoxicating) where such sale or service is for cash, deferred payment or other valuable consideration, shall be deemed to be a sale of those goods by the person making the sale and purchase of those goods by the person to whom such sale is made. (3) Notwithstanding anything to the contrary contained in this Act or any other law for the time being in force, two independent sales or purchases - 44 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS shall, for the purposes of this Act, be deemed to have taken place, (a) when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser, or (b) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal, if the agent is found in either of the cases aforesaid, - (i) to have sold the goods at one rate and to have passed on the sale proceeds to his principal at another rate, or (ii) to have purchased the goods at one rate and to have passed them on to his principal at another rate, or (iii) not to have accounted to his principal for the entire collections or deductions made by him in the sales or purchases effected by him on behalf of his principal, or (iv) to have acted for a fictitious or non- existent principal. (4) Every transfer of property in goods by the Central Government, any State Government, a - 45 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS statutory body or a local authority for cash or for deferred payment or other valuable consideration, whether or not in the course of business, shall be deemed to be a sale for the purposes of this Act.” Section 2(15) of the KVAT Act “(15) 'Goods' means all kinds of movable property (other than newspaper, actionable claims, stocks and shares and securities) and includes livestock, all materials, commodities and articles (including goods, as goods or in some other form) involved in the execution of a works contract or those goods to be used in the fitting out, improvement or repair of movable property, and all growing crops, grass or things attached to, or forming part of the land which are agreed to be severed before sale or under the contract of sale.” Section 2(34) of the KVAT Act (34) 'Taxable turnover' means the turnover on which a dealer shall be liable to pay tax as determined after making such deductions from his total turnover and in such manner as may be prescribed, but shall not include the turnover of purchase or sale in the course of interstate trade or commerce or in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India and the value of - 46 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS goods transferred or despatched outside the State otherwise than by way of sale. Section 2(36) of the KVAT Act (36) 'Turnover' means the aggregate amount for which goods are sold or distributed or delivered or otherwise disposed of in any of the ways referred to in clause (29) by a dealer, either directly or through another, on his own account or on account of others, whether for cash or for deferred payment or other valuable consideration, and includes the aggregate amount for which goods are purchased from a person not registered under the Act and the value of goods transferred or despatched outside the State otherwise than by way of sale, and subject to such conditions and restrictions as may be prescribed the amount for which goods are sold shall include any sums charged for anything done by the dealer in respect of the goods sold at the time of or before the delivery thereof. Explanation. – The value of the goods transferred or despatched outside the State otherwise than by way of sale, shall be the amount for which the goods are ordinarily sold by the dealer or the prevailing market price of such goods where the dealer does not ordinarily sell the goods. - 47 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Section 2(37) of the KVAT Act (37) 'Works contract' includes any agreement for carrying out for cash, deferred payment or other valuable consideration, the building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any movable or immovable property. Rule 3(1)(c) of the KVAT Rules 3. Determination of turnover - (1) The total turnover of a dealer, for the purposes of the Act, shall be the aggregate of. (a) xxx (b) xxx (c) the total amount paid or payable to the dealer as the consideration for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract including any amount paid as advance to the dealer as a part of such consideration; - 48 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Rule 3(2)(1) and 3(2)(m) of the KVAT Rules 3. Determination of turnover – (1) xxx (2) The taxable turnover shall be determined by allowing the following deductions from the total turnover.- Xxx xxx Xxx xxx (1) All amounts actually expended towards labour charges and other like charges not involving any transfer of property in goods in connection with the execution of works contract including charges incurred for erection, installation, fixing, fitting out or commissioning of the goods used in the execution of a works contract. (m) Such amounts calculated at the rate specified in column (3) of the Table below towards labour charges and other like charges as incurred in the execution of a works contract when such charges are not ascertainable from the books of accounts maintained by a dealer. Column xxx Explanation I: Where the turnover of a dealer claiming deduction under clause (I)in any tax period - 49 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS is not sufficient to cover the deduction, it shall be allowed to the extent of the turnover of the dealer in that period, and the balance shall be carried forward to the following tax period or any subsequent tax period. Explanation II: For the purpose of clause (1), “labour and other like charges” include charges for obtaining, on hire or otherwise, machinery and tools used in the execution of a works contract, charges for planning, designing and architects’ fees, cost of consumables used in the execution of the works contract, cost of establishment to the extent relatable to supply of labour and services and other similar expenses relatable to supply of labour and services. Explanation III: For the purpose of clause (1), gross profit earned by a dealer shall be apportionable to the value of the goods and labour and other like charges involved in the execution of a works contract in the same ratio as in the total turnover. Explanation IV. – The deduction under clauses (d) and (3) shall be allowed in the return to be furnished for the tax period in which the goods are Returned by the purchasers or the dealer as the case may be. - 50 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Article 366(29A) (b) of Constitution of India (29A)"tax on the sale or purchase of goods" includes-- (a) XXX (b) a tax on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;” 17. It would also be necessary to take note of the relevant Clauses of the JDA to properly apply the provisions of law and also to decide the issue. The same are reproduced hereunder: "5. CONVEYANCE OF UNDIVIDED RIGHT IN LAND The owners hereby agree and confirm that they shall convey to the Developer or its nominees or assigns 65% of the undivided right, title and interest in the Schedule Property (for short hereinafter referred to as the Developer's Allocation) as hereinafter defined by executing one or more Sale deed/s in favour of the Developer or - 51 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS its nominees or assigns and also appear before the Sub-Registrar and admit execution of the Sale Deed or Sale Deeds either directly or through the General Power of Attorney duly to be executed in favour of the nominee/s or Director/s of the Developer herein as per the Developer's preference. 6. SHARING OF BUILT AREA 6.1 In consideration of the Owners agreeing to convey 65% of the undivided share, right, title and interest in the Schedule property together with right 65% of the Car Parking slots to the Developer or its nominees and similarly, the Developer agrees to construct and deliver to the owners 35% of the saleable super built area together with 35% of the Car Parking for the absolute use und or benefit and ownership of the Owners. 8: COST OF CONSTRUCTION The entire cost of construction of the Project in the Schedule Property shall be borne by the Developer. The Owners shall not be required to contribute any amount for the construction. 20. SPECIFIC PERFORMANCE In case of breach of trust and terms committed by any of the parties hereto against the - 52 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS other, the aggrieved Party shall have above option of arbitration and shall have course of the right of seeking specific performance of this JDA from the Party who committed such breach of trust as per this JDA and also be entitled to recover all losses, damages, consequential costs and expenses so incurred as consequence of such breach from the party committing the breach. 21. 21. GENERAL PROVISIONS 21.1 Nothing contained herein shall be deemed or construed as a partnership between the Owners and the Developer or a Joint Venture or an association or persons. Each party hereto shall be strictly responsible for its income, wealth, gift taxes and other duties." 18. A perusal of the JDA as extracted above makes it clear that the owner has agreed to convey or transfer to the developer or its nominees 65% of the undivided right, title and interest of the schedule property and the developer as consideration has agreed to construct and deliver to the owners 35% of the salable super built-up area, together with 35% of the car parking spaces for the absolute use, benefit and ownership of the landlord/owner. - 53 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Regarding Question of Law No.1: 19. In terms of Section 2(29) of the KVAT Act, ‘sale’ would mean transfer of property in goods by one person to another in the course of trade or business for cash, deferred payment or other valuable consideration and includes the transfer of property in goods involved in the execution of a works contract. ‘Works contract’ in terms of Section 2(37) of the KVAT Act includes any agreement for carrying out, for cash deferred payment or other valuable consideration, the building, the construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any movable or immovable property. In the light of the above, the question is, whether there exists a works contract under the JDA and if so, whether the same would amount to a sale within the meaning of the KVAT Act? 20. In an identical fact situation, the Hon'ble Apex Court in K.RAHEJA DEVELOPMENT CORPORATION VS. - 54 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS STATE OF KARNATAKA6, at paragraphs 17, 18, 19 and 20, observed as follows: "17. 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 6 (2005) 5 SCC 162 - 55 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 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 the Promotion of Construction, Sale, Management and Transfer) Act, 1972 will have no relevance. 18. However as Mr Mehta has argued on this aspect we record that reliance on the judgments in Podar Cement Ltd. [(1997) 5 SCC 482] and Mysore Minerals Ltd. [(1999) 106] cases are of no assistance to the appellants. Those are cases under the Income Tax Act. Those 7 SCC cases lay down that the term "owner" must be given an interpretation in the context of the provisions of the Act. If that rationale 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 got sanctioned in the name of the owner of the property. It would be the owner of the property - 56 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS who would then execute a conveyance directly to the society of purchasers. All that the appellants have is a possessory interest and a right to construct. Such rights do not constitute the person as an owner of the property. 19. 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 clauses (q), (r) of the recitals and clauses 1, 5(c) and 7, which read as follows: "(q)(i) Construction of the said multi-storeyed building. (ii) Sale of the units in the aforesaid multi- storeyed building to different persons in whose favour ultimately a deed of conveyance would be obtained by the holders, directly from the vendors, of an undivided fractional interest in the said land (i.e. the area of 5910.17 sq meters described in the First Schedule hereunder written) and such owner of units would own, on ownership basis, the respective units on condition that an agreement would be entered into between the holders on the one hand and the persons (desiring to acquire on ownership basis a unit in such multi-storeyed building) on the other hand and it would be an essential, integral and basic concept, term and condition of the proposed transaction (which would be by way of a package deal not capable of being segregated or separated or terminated, one without the corresponding effect on the other) that K. Raheja Development Corporation as the landholder would agree to sell to such persons an undivided fractional interest in the said land described in the First Schedule hereunder written on condition that they i.e. M/s K. Raheja Development Corporation as developers on behalf of and as developers of such person would construct - 57 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS for, as a unit ultimately to belong to such person a unit or units that would be so mutually selected and settled by and between K. Raheja Development Corporation and the person concerned. (r) The prospective purchaser is interested in acquiring ownership rights in respect of Unit/s 1101 on the eleventh floor/s of the said multi-storeyed building named 'Raheja Towers' and also Car Parking Space/s No./s nil in the basement/ground floor of the said building (hereinafter referred to as 'the said unit'). *** 1. As and by way of a package deal: (a) K. Raheja Development Corporation (as holders), agree to sell to the prospective purchaser an undivided 0.42% share, right, title and interest in the said land described in the First Schedule hereunder written (with no right to the prospective purchaser to claim any separate sub-division and/or right to exclusive possession of any portion of the said land) for a lump sum agreed and quantified consideration of Rs 3,25,000 (Rupees three lakhs twenty-five thousand only) to be paid by the prospective purchaser to the holders at the time and in the manner stated in clause 2 hereof. (b) K. Raheja Development Corporation (as developers) agree to build the said building named 'Raheja Towers', having the specifications and amenities therein set out in the Second Schedule hereunder written and as developers for the prospective purchaser, the developers shall build for and as unit/s to belong to the prospective purchaser, the said premises (details whereof are set out in the Third Schedule hereunder written) for a lump sum agreed and quantified consideration of Rs 5,07,000 (Rupees five lakhs seven thousand only) to be paid by the prospective purchaser to the developers at the time and in the manner set out in clause 3 hereof. The said premises shall have the amenities set out in the Fourth Schedule hereunder written: *** - 58 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 5. The under mentioned terms and provisions are express conditions to be observed, performed and fulfilled by the prospective purchaser, on the basis of which this agreement has been entered into by the holders/developers and the due and proper fulfilment whereof are to be conditions precedent to any title being created and/or being capable of being documented by the prospective purchaser in the aforesaid fractional interest in the land described in the First Schedule hereunder written and/or in the said premises: (a)-(b)*** (c) The overall control and management of the project and the development and completion of the said building shall be with the developers and furthermore the developers are and shall continue to be in possession of the said land and building and shall be entitled to a lien thereon and that the prospective purchaser shall not be entitled to claim or demand from the holders possession of any portion of the said land or to claim or demand from the developers possession of the said premises unless and until the prospective purchaser has paid in full through the holders the full consideration money payable to the holders under clause 2 above and the full consideration money payable to the developers under clause 3 above. *** 7. If the prospective purchaser commits default in payment of any of the instalments of consideration aforesaid on their respective due dates (time being the essence of the contract) and/or in observing and performing any of the terms and conditions of this agreement, the holders/developers shall be at liberty, after giving 15 days' notice specifying the breach and if the same remains not rectified within that time, to terminate this agreement, in which event, a sum equivalent to 10% of the amounts that may till then have been paid by the prospective purchaser to the holders and the developers respectively shall stand forfeited. The holders and the developers shall, however, on such - 59 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS termination, refund to the prospective purchaser the balance amounts of the Instalments of part- payment, if any, which may have till then been paid by the prospective purchaser to the holders and the developers respectively but without any further amount by way of interest or otherwise. On the holders/developers terminating this agreement under this clause, they shall be at liberty to dispose of the said unit/s and the said fractional interest in the land to any other person as they deem fit, at such price as they may determine and the prospective purchaser shall not be entitled to question such sale, disposal or to claim any amount from them." (emphasis supplied) 20. Thus the appellants are undertaking to build as developers for the prospective purchaser. Such construction/development is to be on payment of a price in various instalments set out in the agreement. As the appellants are not the owners they claim a "lien" on the property. Of course, under clause 7they have right to terminate the agreement and to dispose of the unit if a breach is committed by the purchaser. However, merely having such a clause does not mean that the agreement ceases to be a works contract within the meaning of the term in the said Act. All that this means is that if there is a termination and that particular unit is not resold but retained by the appellants, there would be no works contract to that extent. But so long as there is no termination the construction is for and on behalf of the purchaser. Therefore, it remains a works contract within the meaning of the term as defined under the - 60 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS said Act. It must be clarified that if the agreement is entered into after the flat or unit is already constructed, then there would be no works contract. But so long as the agreement is entered into before the construction is complete it would be a works contract.” 21. Taking note of the principles laid down by the Hon'ble Apex Court in the above decision, if the developer undertakes construction for a prospective purchaser for consideration, such an agreement would constitute a works contract. But, the aforesaid view was doubted by the Hon'ble Apex Court in the case of Larsen and Toubro Limited Vs. State of Karnataka7 and the matter was referred to a Larger Bench. The relevant observation are as under: "10. In the present case the Department has placed reliance essentially on para 20 of the judgment in Raheja Development case [(2005) 5 SCC 162] which reads as under: (SCC p. 171) "20. Thus the appellants are undertaking to build as developers for the prospective purchaser. Such construction/development is to be on payment of a price in various instalments set out in the agreement. As the appellants are not the owners 7 (2008) 17 SCC 199 - 61 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS they claim a 'lien' on the property. Of course, under Clause 7 they have right to terminate the agreement and to dispose of the unit if a breach is committed by the purchaser. However, merely having such a clause does not mean that the agreement ceases to be a works contract within the meaning of the term in the said Act. All that this means is that if there is a termination and that particular unit is not resold but retained by the appellants, there would be no works contract to that extent. But so long as there is no termination the construction is for and on behalf of the purchaser. Therefore, it remains a works contract within the meaning of the term as defined under the said Act. It must be clarified that if the agreement is entered into after the flat or unit is already constructed, then there would be no works contract. But so long as the before the agreement is entered into construction is complete it would be a works contract." (emphasis supplied) We have prima facie some difficulty in accepting the proposition laid down in para 20 quoted above. Firstly, in our view, prima facie, M/s Larsen & Toubro, the petitioner herein, being a developer had undertaken the contract to develop the property of Dinesh Ranka. Secondly, the show- cause notice proceeds only on the basis that the tripartite agreement is a works contract. Thirdly, in the show-cause notice there is no allegation made by the Department that there is monetary consideration involved in the first contract which is the development agreement. 11. Be that as it may, apart from the disputes in hand, the point which we have to examine is whether the ratio of the judgment of the Division - 62 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Bench in Raheja Development Corpn. [(2005) 5 SCC 162] as enunciated in para 20, is correct. If the development agreement is not a works contract could the Department rely upon the second contract, which is the tripartite agreement and interpret it to be a works contract, as defined under the 1957 Act. The Department has relied upon only the judgment of this Court in Raheja Development Corpn. case [(2005) 5 SCC 162] because para 20 does assist the Department. However, we are of the view that if the ratio of Raheja Development case [(2005) 5 SCC 162] is to be accepted then there would be no difference between a works contract and a contract for sale of chattel as a chattel. 12. Lastly, could it be said that the petitioner Company was the contractor for prospective flat purchaser. Under the definition of the term "works contract" as quoted above the contractor must have undertaken the work of construction for and on behalf of the contractor for cash, deferred (sic payment) or any other valuable consideration. According to the Department, the development agreement is not a works contract but the tripartite agreement is a works contract which, prima facie, appears to be fallacious. There is no allegation that the tripartite agreement is sham or bogus.” - 63 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 22. The Larger Bench of the Hon'ble Apex Court in LARSEN AND TOUBRO LIMITED AND ANOTHER VS. STATE OF KARNATAKA8, considering various aspects of JDA, held as follows: "88. The question is: whether taxing sale of goods in an agreement for sale of flat which is to be constructed by the developer/promoter is permissible under the Constitution? When the agreement between the promoter/developer and the flat purchaser is to construct a flat and eventually sell the flat with the fraction of land, it is obvious that such transaction involves the activity of construction inasmuch as it is only when the flat is constructed then it can be conveyed. We, therefore, think that there is no reason why such activity of construction is not covered by the term “works contract”. After all, the term “works contract” is nothing but a contract in which one of the parties is obliged to undertake or to execute works. Such activity of construction has all the characteristics or elements of works contract. The ultimate transaction between the parties may be sale of flat but it cannot be said that the characteristics of works contract are not involved in that transaction. When the transaction involves the activity of construction, the factors such as, the 8 (2014) 1 SCC 708 - 64 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS flat purchaser has no control over the type and standard of the material to be used in the construction of the building or he does not get any right to monitor or supervise the construction activity or he has no say in the designing or layout of the building, in our view, are not of much significance and in any case these factors do not detract the contract being works contract insofar as construction part is concerned." 89. For sustaining the levy of tax on the goods deemed to have been sold in execution of a works contract, in our opinion, three conditions must be fulfilled: (i) there must be a works contract, (ii) the goods should have been involved in the execution of a works contract, and (iii) the property in those goods must be transferred to a third party either as goods or in some other form. In a building contract or any contract to do construction, the above three things are fully met. In a contract to build a flat there will necessarily be a sale of goods element. Works contracts also include building contracts and therefore without any fear of contradiction it can be stated that building contracts are species of the works contract. Xxxxxxx - 65 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 105. The argument on behalf of the developers that the flat purchaser is entitled to transfer of flat and conveyance of fraction of land only when all instalments have been fully paid and that shows that the agreement between the developer and the flat purchaser is the sale of flat and not to appoint the developer as the contractor of the flat purchaser for the purposes of carrying out the construction of the flat for and on behalf of the flat purchaser has no merit. The submission overlooks the typical nature of the development agreement which is followed by a tripartite agreement between the owner of the land, the developer and the flat purchaser. Effectively and de facto it is the developer who constructs the building for the flat purchaser. The developer does so for monetary consideration. The label of payment is not decisive but the factum of the payment is. The construction is done on payment of price as agreed upon between the developer and the flat purchaser. It is not necessary to recapitulate all clauses of the agreement under KOFA or for that matter under MOFA. Raheja Development [K. Raheja Development Corpn. v. State of Karnataka, (2005) 5 SCC 162] takes note of relevant clauses of the recitals and the agreement under KOFA. We need not repeat them. Similarly, Form V of the Maharashtra Ownership Flat Rules contains recital such as, “as a result of the - 66 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS development agreement the promoters are entitled and enjoined upon to construct buildings on the said land”. One of the relevant clauses (omitting the unnecessary portion) in Form V reads: “1. The promoter shall construct the said building/s … in accordance with the plans, designs, specifications … which have been seen and approved by the flat purchaser with the owner [Ed.: An alternative source states “purchaser with only such variations and modifications.…”] , such variations and modifications as the promoter may consider necessary or as may be required by the local authority/the Government concerned … Provided that the promoter shall have to obtain prior consent in writing to the flat purchaser in respect of variations or modifications which may adversely affect the flat of the purchaser.” It is, thus, not correct to say that the work is undertaken by the developer for himself and for the owner and the construction is not carried for and on behalf of the purchaser." 106. In the development agreement between the owner of the land and the developer, direct monetary consideration may not be involved but such agreement cannot be seen in isolation to the terms contained therein and following development agreement, the agreement in the nature of the tripartite agreement between the - 67 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS owner of the land, the developer and the flat purchaser whereunder the developer has undertaken to construct for the flat purchaser for monetary consideration. Seen thus, there is nothing wrong if the transaction is treated as a composite contract comprising of both a works contract and a transfer of immovable property and levy sales tax on the value of the material involved in execution of the works contract. The observation in the referral order that if the ratio in Raheja Development [K. Raheja Development Corpn. v. State of Karnataka, (2005) 5 SCC 162] is to be accepted then there would be no difference between works contract and a contract for sale of chattel as chattel overlooks the legal position which we have summarised above. Xxxxxx 110. It may, however, be clarified that activity of construction undertaken by the developer would be works contract only from the stage the developer enters into a contract with the flat purchaser. The value addition made to the goods transferred after the agreement is entered into with the flat purchaser can only be made chargeable to tax by the State Government." - 68 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS On a careful reading of the above decision, it can be gathered that a development agreement between the land owner and the developer may not necessarily involve direct monetary consideration, unless it is a tripartite agreement between the land owner, the developer and the flat purchaser, wherein the developer undertakes construction for the flat purchaser for monetary consideration, then the transaction assumes the character of a composite contract comprising both a works contract and a transfer of immovable property. It is further held that, the activity of construction undertaken by the developer would constitute a works contract only from the stage at which the developer enters into a contract with the flat purchaser. In the light of the above decisions of the Hon'ble Apex Court, the questions of law raised requires to be considered. 23. We do not find any error with the finding of the Tribunal that the JDA between the land owner and the developer is in the nature of barter wherein the land owner transfers the agreed share of land, in consideration, the - 69 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS developer constructs apartments and delivers the agreed portion to the land owner. We are in agreement with the said finding and in terms of Section 2(29) of the KVAT Act, such transaction would not amount to sale. 24. The Larger Bench of the Hon'ble Apex Court in LARSEN AND TOUBRO LIMITED (supra) has held that where a contract comprises both a works contract and a transfer of immovable property, the same does not seize to be a works contract. It is further held that construction undertaken by a developer for a flat purchaser for monetary consideration constitutes a works contract. 25. Insofar as a development agreement between the land owner and the developer is concerned, though direct monetary consideration may not be involved, such an agreement cannot be moved in isolation. It has to be read in conjunction with the subsequent agreements entered into between the developer and the flat purchasers. In tripartite agreements where the developer agrees for construction for the flat purchaser for monetary consideration, the - 70 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS transaction assumes the character of a composite contract comprising both a works contract and a transfer of immovable property and levy of sales tax on the value of materials involved in the execution of the works contract is permissible. However, the activity of construction undertaken by the developer would constitute a works contract only from the stage at which the developer enters into a contract with the flat purchaser. Then, only the value addition to the goods transferred after entering to such agreements with the flat purchasers can be subjected to tax by the State. 26. Reliance placed by the learned Additional Government Advocate on the decision of the Hon'ble Apex Court in M/S. GANNON DUNKERLEY AND CO., AND OTHERS VS. STATE OF RAJASTHAN AND OTHERS9 is misplaced in view of the subsequent Larger Bench decision of the Hon'ble Apex Court in LARSEN AND TOUBRO LIMITED (supra). 9 (1993) 1 SCC 364 - 71 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 27. In the light of the above, even if the transaction is treated as a composite contract comprising both a works contract and a transfer of immovable property, the levy of sales tax on the value of materials involved in the execution of the works contract would be confined only to the construction activity undertaken by the developer pursuant to agreements entered into with the flat purchasers. Therefore, the JDA between the land owner and the developer is a composite contract comprising both works contract and a transfer of immovable property, and that sales tax may be levied on the value of materials involved in the execution of the works contract, subject to the decision of the Larger Bench of the Hon'ble Apex Court in LARSEN AND TOUBRO LIMITED (supra) i.e., the activity of construction undertaken by the developer would constitute a works contract only from the stage at which the developer enters into a contract with the flat purchaser. Therefore, the construction undertaken in respect of a land owner’s share under the JDA would not amount to a works contract. - 72 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 28. Accordingly, question of law No.1 is answered in favour of the assessee and against the Revenue. Regarding Question of Law No.2: 29. Answer to question of law No.1 would almost cover or answer the present question. In terms of the Larger Bench decision of the Hon'ble Apex Court in LARSEN AND TOUBRO LIMITED (supra), to sustain the levy of tax on goods deemed to have been sold in the execution of a works contract, the following conditions must be satisfied: a) There must be a works contract; b) Goods must have been involved in the execution of such works contract; and c) Property in those goods must be transferred to a third party, either as goods or in some other form. 30. As noticed from the Clauses of the JDA, the land owner has agreed to convey a specific percentage of undivided share in the land in favour of the developer or its nominees and in consideration thereof, the developer has - 73 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS agreed to construct and deliver to the land owner a corresponding proportion of the salable super built-up area. The JDA would also indicate that the land owner has agreed to convey 65% of the undivided share in the land and the developer has agreed to construct and deliver 35% of the salable built-up area. The entire cost of construction is to be borne by the developer. There is no requirement of payment of monetary consideration by the land owner to the developer towards construction of land owner’s share. However, such agreement is considered as a composite contract for construction and transfer of immovable property, levy of tax is permissible only to the extent of construction activity that too, from the stage at which the developer enters into contract with the flat purchasers, that too, in respect of value addition to the goods transferred after such agreements with the flat purchasers. 31. In LARSEN AND TOUBRO VS. STATE OF KARNATAKA10 and in STATE OF KARNATAKA VS. VASWANI 10 ILR 2010 KAR. 3154 - 74 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS ESTATES PVT. LTD.,11 it has been held that the levy of sales tax is confined to the value of goods involved in a particular taxable activity. It is further held that, in execution of a works contract, several components are involved, and unless the value of the goods transferred in the course of execution of the works contract is ascertained, and the levy is confined to such value, the charging provision itself would fail. This Court, referring to Article 366 (29A) of the Constitution of India, has held that charge is restricted to the property in goods involved in the execution of a works contract and nothing beyond. In the absence of consideration, the transaction would partake the character of barter or exchange. 32. Insofar as the words “other valuable consideration” appearing in the definition of ‘sale’ in terms of Section 2(29) of the KVAT Act, the Allahabad High Court considering the same expression has held that where no price is paid, the transaction is one of exchange or barter. 11 2014 SCC OnLine KAR 12387 - 75 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Applying the Rule of ejusdem generis, it is held that “other valuable consideration” would take color from monetary modes such as payment by cheque, bills of exchange or similar negotiable instruments. The Hon'ble Apex Court in DHAMPUR SUGAR MILLS LIMITED., VS. COMMISSIONER OF TRADE TAX, U.P.12 had an occasion to consider the word ‘sale’ while dealing with Clause 29A of Article 366 of the Constitution of India and the observation made at paragraph 20 reads as follows: “20. It is inconceivable in law that a licence fee can be a subject-matter of barter or exchange. A barter or exchange indisputably is distinct and different from a sale. A contract of sale denotes a transfer of property in goods by mutual consent. Such a transfer of ownership must be in relation to transfer from one person to another. The consideration would be a price in the form of money. Only when the consideration for transfer consists of other goods, it may be an exchange or barter. Such is not the position here.” The above makes it abundantly clear that, barter or exchange is distinct from a sale. The essential ingredients 12 (2006) 5 SCC 624 - 76 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS of sale is the presence of price in the form of money. In the absence of consideration in the form of money or price, the transaction would partake the character of an exchange or barter. 33. In the instant case, to constitute sale in terms of Sub-Section (29) of Section 2 of KVAT Act, though there is transfer of property there is no consideration. Even under expression ‘other valuable consideration’, price in the form of money or monetary value shall exist to constitute a sale. Therefore, the contention of the State that the cost of construction of land owner’s share constitutes consideration for the transfer of undivided share in the land cannot be accepted, in the absence of any statutory backing solely on the basis of the Circular No.12/2009-10 dated 07.12.2009. 34. Accordingly, the question of law No.2 is answered in favour of the assessee and against the Revenue. - 77 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Regarding Question of Law No.3: 35. The larger Bench of the Hon’ble Supreme Court in LARSEN & TOUBRO LIMITED (supra) has held that the State Legislature lacks the legislative competence under Entry 54 of List II of the Seventh Schedule to levy tax on the transfer of immovable property. However, it has also been held that the State is competent to levy sales tax on the sale of goods component in an agreement for sale of flats, which includes a deemed sale of goods in the execution of a works contract. It is further held that there is no infirmity in treating the transaction comprising a development agreement between the landowner and the developer, followed by agreements with flat purchasers, as a composite contract involving both a works contract and a transfer of immovable property, and in levying sales tax on the value of materials involved in the execution of the works contract. While considering Article 366(29A)(b) of the Constitution, it is held that taxation of the sale of goods element in a works contract is permissible even after - 78 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS incorporation of goods, provided that the levy is confined to the value of the goods and does not extend to the transfer of immovable property. Ultimately, it is concluded that the activity of construction undertaken by the developer would constitute a works contract only from the stage at which the developer enters into a contract with the flat purchaser, and only the value addition to the goods transferred after such stage can be subjected to tax by the State. 36. In the light of the findings recorded herein, since the subject matter of the Joint Development Agreement is the transfer of immovable property, any levy of tax thereon would fall outside the legislative competence of the State. 37. Accordingly, the question of law No.3 is answered in favour of the Assessee and against the Revenue. Regarding Question of Law No.4: 38. This issue arises in the light of Circular No.121/2009-10 dated 07.12.2009, which mandates the - 79 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Assessing Authority, in cases involving Joint Development Agreements (JDA) to include the value of land relatable to the developer’s share in the taxable turnover, on the premises that towards the cost of construction of the land owner’s share of the built-up area the developer receives from the flat purchasers the value attributable to the undivided share of land. It further prescribes three different methods to ascertain the value of such undivided share recovered by the developer. Likewise, for determining the amount payable by the land owner towards construction of his share, the Circular again provides three methods to ascertain the value attributable to the transfer of undivided share in the land. The value so determined is directed to be treated as the total consideration for the works contract executed by the developer and added to the turnover declared by the developer. 39. The respondent-assessee contends that the statute would not prescribe or contain computation mechanism and circular cannot prescribe such computation - 80 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS mechanism. On going through the circular dated 07.12.2009, it would not indicate the provision under which the said circular is issued or source of power to issue such circular. No enabling provision to issue such circular is pointed out. It is true that to supplement a provision, circulars could be issued. However, in the absence of any provision enabling the authority to prescribe such computation mechanism, the circular would not stand to legal scrutiny. It is settled position of law that, once a charging provision is provided under the statute the machinery for its computation, shall also be provided. No such mechanism is provided under the statute. The instant circular without statutory authority cannot be enforced. The Hon'ble Apex Court in the case of GOVIND SARAN GANGA SARAN VS. COMMISSIONER OF SALES TAX AND OTHERS13, at paragraph 6 has observed as follows: "6. The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the 13 1985 (Supp) SCC 205 - 81 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and the fourth is the measure or value to which the rate will be applied for computing the tax liability. If those components are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislative scheme defining any of those components of the levy will be fatal to its validity." 40. In COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, KERALA VS. LARSEN & TOUBRO LTD.,14 the Hon'ble Apex Court has held that where there is no machinery provision for assessment, rendering the law vague, it would not be open to the Assessing Authority to arbitrarily impose or assess tax. In the absence of machinery and procedure to be followed for assessment, such machinery provisions cannot be introduced by way of circulars, unless the Act enables such prescription. 14 (2016) 1 SCC 170 - 82 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 41. The Punjab & Haryana High Court in DHINGRA JARDINE INFRASTRUCTURE (P.) LTD. V. STATE OF HARYANA (supra) has emphasised the necessity of a proper statutory mechanism for levy and computation of tax. The Court considered and answered the following question: "(7) Whether levy of tax on builders can be sustained in the absence of machinery provisions? The period being up to 16.05.2020 and thereafter, when the Rules were framed." After analysing the various statutory provisions and the judgments of the High Courts and the Hon’ble Supreme Court, the aforesaid question was answered by holding that, in the absence of a machinery provision specifying the details for computation, though the levy per se may not be in dispute, it would nevertheless be unenforceable. It was further held that unless the statute or rules provide for the manner of calculation of taxable turnover, the levy cannot be enforced. - 83 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS 42. It is settled position of law that a circular or executive order cannot supplement what the statute or act would prescribe or contemplate. If levy of tax is permitted under executive order or circular, it would defeat the process of legislation. Therefore, the instant circular is opposed to the decision of the Hon'ble Apex Court in COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, KERALA (supra). Accordingly, the question of law No.4 is answered in favour of the assessee and against the Revenue. Regarding question of Law No.5: 43. The learned Additional Government Advocate contends that the respondent, having opted for the composition scheme, is entitled to deductions from the total turnover only to the extent provided under Section 15 of the Act. It is submitted that, under the composition scheme, tax is levied at a specified rate on the total turnover or on the total consideration for the works contract executed. However, in the light of the judgment of the - 84 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Larger Bench of the Hon’ble Supreme Court in LARSEN & TOUBRO LIMITED (supra), tax cannot be levied on the transfer of immovable property. It has been clarified that a works contract arises only from the stage at which the developer enters into a contract with the flat purchaser, and the levy is confined to the value addition to the goods transferred thereafter. Once it is held that the value of land is not liable to be included in the taxable turnover, the question of granting or denying deductions from the total turnover, in the context of the composition scheme, would not arise. This question of law is answered accordingly. 44. In STA Nos.8, 9 and 10 of 2022, it is submitted that the land is owned by the developer. In the light of the submissions made by learned Additional Government Advocate for the State and the finding recorded while answering the questions framed, the answer to the above questions would govern the above appeals. No further finding or adjudication is necessary. - 85 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS Re. Review Petitions 45. In light of the findings recorded while answering the questions of law framed hereinabove, we find no error apparent on the face of the record warranting interference in these Review Petitions. Conclusion 46. In view of the foregoing discussion, the following conclusions emerge: (i) The Joint Development Agreement (JDA) between the landowner and the developer is a composite arrangement involving both elements of transfer of immovable property and works contract. However, the construction activity would constitute a works contract only from the stage at which the developer enters into agreements with the flat purchasers. (ii) The construction undertaken by the developer in respect of the landowner’s share under the JDA does not amount to a works contract, as there is no monetary consideration and the transaction is in the - 86 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS nature of barter or exchange, falling outside the scope of “sale” under Section 2(29) of the KVAT Act. (iii) The levy of tax under the KVAT Act is confined to the value of goods involved in the execution of a works contract. Such levy can be sustained only in respect of the value addition to goods transferred pursuant to agreements entered into with flat purchasers, and not on the transfer of immovable property. (iv) The Circular No.12/2009-10 dated 07.12.2009, in so far as it seeks to introduce a mechanism for valuation and to include the value of land in the taxable turnover, lacks statutory backing and cannot override or supplement the provisions of the Act. Consequently, it is not binding on the assessees. (v) In the absence of a statutory mechanism to determine the value of goods involved in the execution of works contract in the context of JDA, the levy, to that extent, is unenforceable. - 87 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS (vi) The contention of the Revenue that the cost of construction of the landowner’s share constitutes consideration for transfer of land is untenable in law. (vii) Even under the composition scheme, tax cannot be levied on elements attributable to transfer of immovable property, and once the value of land is excluded, the question of deduction from total turnover does not arise. ORDER i) The Sales Tax Revision Petition Nos.181/2018, 182/2018, 25/2019, 49/2019, 71/2019, 72/2019, 73/2019, 74/2019, 75/2019, 76/2019, 77/2019, 1/2020, 4/2020, 5/2020, 6/2020, 18/2020 and 2/2022 filed by the Revenue are dismissed. ii) The Sales Tax Appeal Nos.133/2012, 8/2022, 9/2022, 10/2022, 13/2022, 14/2022, 15/2022, 16/2022 and 17/2022 filed by the - 88 - STRP No. 181 of 2018 C/W RP No. 403 of 2025 RP No. 404 of 2025 AND 26 OTHERS assessee/developer are allowed setting aside the impugned order. iii) The Review Petition Nos.403/2025 c/w 404/2025 and 405/2025 are dismissed. iv) Questions of law are answered in favour of the Assessee and against the Revenue. v) No order as to costs. Sd/- (S.G.PANDIT) JUDGE Sd/- (K. V. ARAVIND) JUDGE MV/NC