Maharashtra VAT on Builders - Constitutional Validity - Supreme Court Interim Order
THE Hon. Bombay High court has delivered judgement in case of Maharashtra Chamber of Housing Industry (MCHI) vs. State of Maharashtra in respect of the writ petition no. 2022 of 2007. The constitutional validity of the amendment to section 2(24) of the Maharashtra Value Added Tax Act, 2002 Notification dated 9-7-2010 notifying a composition scheme for Builders, Developers was upheld. The Promoters and Builders Association has filed special leave petition No. 17738 and 17709 of 2012 before the Hon' Supreme Court of India. Hon' Apex Court admitted the petition but no stay is granted to the judgement of Hon Bombay High Court.
As a result, the developers are liable to pay tax under Maharashtra Value Added Tax Act, 2002 with effect from 20th June, 2006.
The Maharashtra State Government had issued a VAT Trade Circular No. 14T dated 6 August 2012, which inter alia stipulated that:
l) The developers who have still not obtained registration shall obtain registration on or before 16th August, 2012. In such cases penalty under sub-section (2A) of section 29 of MVAT Act will not be attracted.
m) Those developers who had obtained registration and paid taxes for period after 01-04-2010 should apply for administrative relief for previous period and file returns for previous periods on or before 31st August, 2012.
The Bombay High Court judgement is already under challenge before the Supreme Court.
The Supreme Court in an order on 28.08.2012 issued the following directions:-
1. The time for registration by the developersas per clause (l) of the Trade Circular dated August 6, 2012 shall stand extended up to October 15, 2012 and the time for filing returns by the developers as per clause (m) of the said circular shall stand extended up to October 31,2012.
2. In case the concerned developers pay tax under the Maharashtra Value Added Tax Act, 2002 (for short"2002 Act") as amended vide Section 2(24) w.e.f. June 20 2006 on or before October 31, 2012, the coercive process for recovery of interest or penalty shall remain stayed. This shall however not preclude the assessing officer to complete the assessment.
3. The above payment of tax by the concerned developers shall be subject to the final decision in the matter before this Court.
4. In case the amendment in Section 2(24) of the 2002 Act is held to be unconstitutional and the tax so deposited/paid by the developers is ordered to be returned by the State Government to the developers, the same shall be returned along with interest at such rate that may be ordered by the court finally at the time of disposal of the matter.