Tamil Nadu

StateCommission

A/75/2019

Mr. Neeraj Somani, - Complainant(s)

Versus

Mr. Sanjay Sarathy, And 2 others. - Opp.Party(s)

PARTY IN PERSON

30 Dec 2021

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

Present:    HON’BLE THIRU.JUSTICE.R.SUBBIAH               ::  PRESIDENT

                    TMT. Dr.S.M.LATHA MAHESWARI                     ::    MEMBER

 

FA.No.75/2019

(Appeal against the Order dt.13.02.2019 made in C.C. No.55/2016 on the file of DCDRC, Chengalpattu, Kancheepuram District)

Dated the  30^th  day of  December  2021  

Neeraj Somani

F1, Ample Agalaya Apartment, Thulasi Street,

Iswarya Garden,

Kattupakkam,

Chennai – 600 056.                                                     ..    Appellant / Complainant                

Vs.

1.Mr.Sanjay Sarathy,

   Project Director

   Hiranandani Parks, Triveni Nagar, Vadakapattu Village,

   Singaperumalkoil,

   Kancheepuram 603 204.

 

2.C.Swaminathan,

   General Manager,

   Hiranandani Parks, Triveni Nagar,

   Vadakapattu Village,

   Singaperumalkoil,

   Kancheepuram 603 204.

 

3.Mr.Niranjan Lakhumal  Hiranandani

   Board of Director

   Evita Construction Pvt Ltd

   514, Dalamal Towers, 211, FPJ Marg,

   Nariman Point,

   Mumbai MH 400 021.                                       ..Respondents / Opposite parties                                                             

 

For the Appellant                                 :   Party in person

Counsel for Respondent 1 &  3               :  M/s Vjiaya kumar

Counsel for Respondent  2                    : Served called absent

              This complaint having come up for final hearing before us on  16.12.2021  and on hearing the arguments of the appellant and Respondents 1 & 3 and  perusing the material records, this Commission made the following;-

ORDER

1.TMT. Dr.S.M.LATHA MAHESWARI    -     MEMBER

 

This appeal has been filed by the appellant/ Complainant under section 15 of the Consumer Protection Act, 1986 against the order of the District Consumer Disputes Redressal Commission, Kancheepuram, made in C.C. No.55/2016 dated 13.02.2019, dismissal of the complaint.

 

2.The facts leading to filing of this appeal is as follows :-

 

          The complaint was filed alleging deficiency in service on the part of the opposite parties in not refunding the Service tax and VAT along with the prayer to refund a sum of Rs.5,29,583/- towards service tax and Rs.1,35,360/- towards vat with interest and compensation of Rs.5 lakhs for mental agony, and Rs.20,000/- towards cost of the proceedings.

3.       It was submitted by the complainant that he along with his mother and father purchased a fully constructed ready to move flat in “Belchmap 302” at Senthmangalam Village, Chengalpet Taluk, Kanchipuram District from Hiranandani Palace Gardens Private Limited. The construction agreement and the sale of Undivided share of land executed on 20.07.2013. The opposite parties charged Rs.5,29,583/- towards service tax and Rs.1,35,360/- towards vat charges. The key was handed over on 09.10.2013. As the complainant came across that as per sec.66 E of the finance act no service tax and Vat could be charged on ready to occupy houses. As the Hiranandani Palace Gardens went in to liquations it was taken over by Evita Construction, the complainant sought refund of the Rs.5,29,583/- towards service tax and Rs.1,35,360/- towards Vat from the opposite parties along with compensation and cost of the proceedings. The  opposite parties 1 & 2  filed version stating that the complainant misunderstood the entire service tax payment structure.  At the time of booking of flat the building “belchamp” was totally constructed except the issuance of completion certificate. It is submitted that the complainant misunderstood the terms ready to move and ready to occupy. As the service tax and Vat is exempted only when the completion certificate was obtained by the developer. The present case the builder Hiranandani Palace having not obtained the same were included in the offer letter. Hence they prayed for dismissal of the complaint.

4.       The 3^rd opposite party filed version stating that the complainant had approached all the opposite parties with illegal motive to extract money.  In all other aspects he had the same defence of opposite parties 1&2. Thus the opposite parties sought for dismissal of the complaint. The complainant filed proof affidavit and submitted documents marked as Ex.A1 to Ex.A16 on the side of opposite parties proof affidavit and documents Ex.B1 to Ex.B2 marked. On perusal of the pleading and documents the District Commission dismissed the complaint. Aggrieved over the same the complainant had come on appeal before us.

 

5.Points for consideration

1.Whether the opposite parties had committed deficiency in serice in not refunding the Service Tax and Vat charges collected from the complainant.

2. If so, what relief the complainant is entitled to?

6.      Point No.1 & 2:-

          The complainant appeared in person and submitted his arguments. It is submitted by him that the provisional completion certificate had been issued by Appur Panchayat on the basis of the competent Engineer certificate dated 27.06.2013, and it is clear that the agreement of sale dated 27.06.2013 does not attract service and vat taxes. He cited various Judgment to show that the opposite parties had obtained service and Vat charges from him. He further submitted that the District Commission did not examine the documents in proper prospective.

7.       As per the Finance Act which reads as follows:

          “In the Finance Act, changes have been made in the construction services, both commercial construction and construction of residential complex, using “completion certificate” issued by “competent authority”. Before the issuance of completion certificate if agreement is entered into or any payment is made for sale of complex or apartment in residential complex, service tax will be leviable on such transaction since the builder provides the construction service. completion certificate issued by a Government authority was prescribed as demarcation by introducing an Explanation in the Finance Act. During the post budget discussions, it was pointed that practice regarding issuance of completion certificates varies from state to state. Considering the practical difficulties, the scope of the phrase ‘authority competent’ to issue completion certificate has been widened by issusing an order for removal of difficulty (Refer M.F.(D.R) Order No.1/2010 dated 22^nd June  2010). Completion certificate issued by an architect or chartered engineer or licensed surveyor can be now taken to determine the service tax liability.”

 

8.       Thus as per the said sec it is made clear that service tax will not be leviable on transactions made by the builder before the issuance of completion certificate and the service tax to be livable only when the construction service was provided by the builder. In the present case it is evident the complainant party in person has entered in to an agreement for sale and sale of undivided share of land dated 09.10.2013 (Ex.A8). The completion certificate Ex.B2 produced by the opposite parties shows that it has been issued with respect to the complainants building by Appur Panchayath on 20.01.2014. hence it is amply clear that what the complainant had purchased is not a completed ready to move apartment. In such circumstances the levy and receipt of the Service Tax and Vat charges by the opposite parties is justified. The complainant had miserably failed to prove that he purchased only a completed apartment to have exemption from levy of the service and Vat charges. In such circumstances the finding rendered by the District Commission and needs no interference. Thus we answer point No.1&2 against the complainant.

In the result the appeal is dismissed confirming the Order of the District Commission, Chengalpattu, Kancheepuram in C.C. No.55/2016 dt.13.02.2019.  Considering the facts and circumstances parties are directed to bear their own cost of the appeal.

 

 

S.M.LATHAMAHESWARI                                                                           R.SUBBIAH

         MEMBER                                                                                             PRESIDENT