BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.
Dated this the 31st day of January 2012
Filed on : 23/06/2009
Present :
Shri. A Rajesh, President.
Shri. Paul Gomez, Member
Smt. C.K. Lekhamma, Member
C.C. No.328/2009
Between
1. Varghese, : Complainants
S/o. Varkey, (By Adv. Roy Varghese,
Elavanthuruthel house, Kathrikkadavu, Kochi-17)
Kadakkanad P.O.,
Kolenchery via, Ernakulam.
2. Anitha, W/o. Varghese,
Elavanthuruthel house,
Kadakkanad P.O.,
Kolenchery via, Ernakulam.
And
M/s. Royal Castle Constructions Ltd : Opposite party
Rep. by its Managing Director, (By Adv. S. Renjith,
Babu Xavier, 1st Floor, XL/7846, 1st Floor, Safa
Chicago Plaza, Complex, Beside Metro
Rajaji road, Kochi-35. Mafathlal, M.G. Road,
Ernakulam)
O R D E R
Paul Gomez, Member.
The facts that induced filing of this complaint are the following: The complainant’s being husband and wife, dreamt of living under a roof of their own. They made an agreement for the construction of an apartment, with this end in view. An agreement was drawn with the opposite party for the same. Even though payment of taxes including service tax has been made a liability of the complainants therein, the said provision is illegal under Kerala Value Added Tax Act 2003 and Service Tax Act. The liability is primarily that of the builder only. Secondly, the opposite party has not handed over possession of the building even though they are bound to do so in the year 2007. Instead of that, they are illegally demanding charges on different counts. Hence this complaint urging upon the Forum to grant several reliefs.
2. In the version filed by the opposite party, the very maintainability of the complaint is challenged on the ground that owner of the property being necessary party was not made a party in the complaint and it is bad for non-jointer of necessary parties. Secondly the source of liability of the complaint is the agreement executed between the parties. There is no force in the contention that the apartment is not handed over to the complainant. The work is completed but the amenities have not been provided because complainants have failed to pay the balance amount outstanding against them. In fact, the laxity on the part of the complainants in discharging their obligation has created in convenience and hardship to the opposite party. Hence it is prayed to dismiss the complaint with costs.
3. Possession of the apartment in question was delivered to the complainant as per order in I.A. No. 528/09. No oral evidence on the side of the complainants. Ext. A1 to A4 were marked for them. No oral evidence for opposite party too. Exts. B1 to B3 were marked on their side. Both parties were heard.
4. The following points arise for consideration.
i. Whether complainants are entitled for possession of the flat
from the appointed date.?
ii. Whether complainants are liable to pay any charges as claimed
by the opposite party?
iii. Any incidental reliefs, if any.
5. Points Nos. i & ii. Whereas no relief is sought from the owner of the property, we do not think, he is a necessary party in this complaint. The possession of flat under dispute is now with complainants vide order in IA No. 528/09. The same has been acknowledged by Ext. B2 letter issued by complainant which has been confirmed by Ext. B1 letter. Therefore the possession of the flat is not in dispute even though the question of the date from which the possession ought to have been handed over to the complainants is still a moot point. The complainants have contented that the dead line set for the same in the agreement was six months from
20-10-2007 the date prescribed for completion of work. Opposite party has replied that even though work was completed in time, handing over was delayed due to the lapse on the part of the complainant in paying the dues under many counts. In view of the relief of delivery of possession has been substituted by the complainants by that of payment of Rs. 4,16,292/- the amount paid under the heading of VAT + service tax, it is not necessary to delve into the matter. The question of payment of compensation also does not arise because, the complainants have tacitly admitted that delay was caused by their failure in paying the balance amount demanded by opposite party.
Consequently, the dispute boils down to the liability of complainants to pay service tax and vat as contended by opposite party. Clause 5 of the agreement imposes liability upon the complainants to pay all forms of taxes. But complainants contend that they have no liability to pay tax either under KVAT or Service Tax Act. And also they have no case that as awarder of contract, they have deducted tax at source. What we understand from the KVAT Act is that it is the duty of the registered dealer to collect tax and pay it as prescribed. A person executing contract is a “dealer” as per the Act. Also it is pertinent to note that complainants have not shown that opposite party falls within the exempted categories envisaged under Section 30 (2). Therefore we are of the view that KVAT Act read with the agreement executed by parties authorizes the opposite party to collect value added tax from the complainants and pay it over to the Government as prescribed. The next question is regarding payment of service tax. Opposite party has produced Ext. B3 auditor’s certificate to show that they have remitted Rs. 1,97,111/- towards service tax in respect of construction services provided to the complainants. The moot point raised in this regard is as to whose liability it is to pay the service tax. Once again, if we turn to clause 5, obviously it begins with the expression “all taxes”. But it is followed by a catalogue of taxes of various kinds, but it does not mention the service tax. When all kinds of taxes are specifically stated, the omission of a particular type of tax must be deliberate. Moreover, opposite party has not produced any material to show that they have the authority to collect the service tax from the awarder of contract so as to pay it over to the Government as in the case of VAT. In that view of the matter, we think the liability to pay service tax is a primary liability of the contractor indepenent from the awarder of contracts, so as to pay it over to the Government as in the case of VAT. Contractor cannot pass it over to the awarder. We do not think any other relief is warranted by the facts and circumstances of the case.
In view of the aforesaid discussion, the complaint is allowed is as follows:
i. The order in I.A. No. 528/09 is made absolute.
ii. Opposite party shall refund Rs. 1,97,111/- collected towards service tax.
The above said order shall be complied with within a period of one month from the date of receipt of a copy of this order
Pronounced in the open Forum on this the 31st day of January 2012.
Sd/-Paul Gomez, Member
Sd/-A Rajesh, President
Sd/- C.K. Lekhamma, Member.
Forwarded/By Order,
Senior Superintendent.
Appendix
Complainant’s exhibits:
Ext. A1 : True copy of agreement
dt. 09-11-1006
A2 : Copy of lawyer notice dt. 07-03-2009
A3 : Postal receipts & A/D. card
A4 : Copy of reply notice dt. 23-03-2009
Opposite party’s exhibits:
Ext. B1 : Copy of Letter dt. 29/04/2010
B2 : copy of letter dt. 29-04-2010
B3 : Auditor’s certificate
