The objections raised by the Company in its reply to the show cause numberice were rejected by the A.O. and the Company was companysequently served with an assessment order dated.
Accordingly, the Company objected to the proposal made in the show cause numberice by the A.O. to recompute the tax liability adopting a uniform rate of 12.5 on the sub contractors turnover.
The sub contractors were registered dealers.
The site was occupied by sub contractors.
31.5.06 raising an additional tax payment of Rs.9,75,89,261/ .
The overall work was done under the supervision of the companysultants numberinated by the companytractee.
The principles whatsoever apply to a sale in general squarely apply to a deemed sale also.
Accordingly, LT placed orders on such sub contractors for agreed price, inclusive of applicable taxes.
The sub contractors purchased goods and chattel like bricks, cement and steel and, where necessary, supply and erect equipments such as lifts, hoist, etc.
They remained the property of the sub companytractors.
Aggrieved by the assessment order dated 31.5.06, for the aforestated period, the Company moved the Andhra Pradesh High Court vide Writ Petition No.12124 of 2006 and challenged the following companyclusion of the A.O. made in the assessment order dated 31.5.06 which reads as under Main companytractor is having an order from the companytractee to purchase and sell goods in the companyrse of execution of works companytract and for that matter, the main companytractor should acquire that goods from the sub contractor, by way of deemed sale as well as the main companytractor, by way of deemed sale as well as the main companytractor should transfer the value of the property by way of deemed sales to the companytractee.
By the said reply, the Company specifically stated that it did number claim input tax credit ITC on the tax invoice of sub contractors.
The materials were erected by the sub contractors.
In reply, LT submitted that under Section 4 7 a of the Andhra Pradesh Value Added Tax Act, 2005 2005 Act, for short there was numberprovision for inclusion of sub contractors turnover in the turnover filed by the Company that, the scheme of the said Act at the relevant time did number companytemplate for the declaration of sub contractors turnover and, that, under the scheme of the said 2005 Act the sub companytractor was a dealer.
The materials were brought to site.
H. KAPADIA, J. Leave granted.
LT was served with a numberice dated 10.3.06 in which it was alleged that the Company had failed to disclose the sub companytractors turnover of Rs.111,53,05,835/ in the returns filed upto 31.1.06 for the period 1.4.05 to 31.1.06.
Respondent Larsen Tourbo Ltd. LT is engaged in executing civil, mechanical and other building works throughout India including Andhra Pradesh.
During the relevant period it entered into companytracts with its clients companytractees whose names are given in the annexure to the original writ petition filed in the High Court of Andhra Pradesh.
Under the Contract, LT, with the companysent of the companytractee, was permitted to assign parts of companystruction work to the sub contractors whose names are also given in the list annexed to the original writ petition filed in the High Court.
