Case Title | Soma Mohite Joint Venture |
Court | Maharashtra AAAR |
Honorable Judges | Member Sungita Sharma & Member Rajiv Jalota |
Citation | 2020 (01) GSTPanacea 22 HC Maharashtra MAH/AAAR/SS-R1/21/2019-20 |
Judgement Date | 20-January-2020 |
Council for Petitioner | Makarand P.S.Joshi |
Council for Respondent | R.P.Bodke |
Section | Section 002(19) |
In Favour of | In Favour of Assessee |
The Maharashtra bench of Member Sungita Sharma & Member Rajiv Jalota has held that the present project being a part of a Major Project and not a Minor project does not fulfill the condition of being the type of work entrusted to a Panchayat. The work deals with excavation of earth and depositing it on the sides. As per the definitions, it is clear that Earthwork includes excavation and as per the contract the Earthwork constitutes more than 92.66% of the contract by value. The Contract may be for something else- be it construction of building, tunnel, canal, road and in these contracts if the earthwork constitutes more than 75% then it qualifies for the above entry. If the intention of the Legislature had been to cover only pure contract of earthworks in it then a qualifying condition of more than 75% by value wouldn`t have been provided. Bench therefore find the reasoning of the AAR untenable.
FACTS OF THE CASE
Appellants are engaged in business of Construction of Infrastructure projects. On 27th December 2008, a Joint Venture was formed between Soma Enterprises and DM Corporation Pvt. Ltd. (formerly known as Mohite & Mohite Engineers & Contractors Pvt. Ltd.) to undertake construction of tunnel and its allied works for Nira-Bhima Link No. 5 of Indapur Taluka, Pune under Krishna Bhima Stabilisation Project awarded by Godavari Marathwada Irrigation Development Corporation, Aurangabad
On On 26th April 2019, Appellants filed an online Application for Advance Ruling before the Authority for Advance Ruling of Maharashtra (hereinafter referred to as “AAR”) seeking Advance Ruling in respect of following Question
Whether the said contract is covered under SI No – 3A, Chapter No 99 as per Notification No.02/2018-Central Tax (rate) dated 25th January 2018, w.e.f. 25th January 2018?
Whether the said contract is covered under the term “Earth Work” and the covered under SI No – Chapter No. 9954 as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017?
If Appellants are covered under SI No. 3 Chapter No. 995 as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017 w.e.f. 13th October 2017, then what is the meaning of “Earth Work”?
On 23rd May 2019, preliminary hearing in the matter was held before the AAR which was attended by the Appellants and the CST Department was represented by the Assistant Commissioner of ST, Pune. AAR was pleased to admit the Application. On 3rd August 2019, final hearing was held before the AAR which was attended by the Appellants and the Jurisdictional Officer wherein, the Appellants filed the Written Submissions.
On 23rd August 2019, ignoring the submissions, written as well as oral, made by the Appellants, AAR passed an Order No. GST-ARA-08/2019-20/B100 (hereinafter referred to as the “impugned Order”) and rejected the Application filed by the Appellants seeking Advance Ruling.
Being aggrieved and dissatisfied by the aforementioned impugned Order dated 23rd August 2019, the Appellants are filing the instant Appeal before this Hon`ble Appellate Authority on the grounds mentioned here under which are to be taken independently and without prejudice to one another.
COURT HELD
Considering the facts as recorded, held that as for fulfilling the condition regarding whether the function is that which is entrusted to Panchayat under 243G, Bench find that as per the Central Water Commission guidelines, a Major Project is a project having CCA (Culturable Command Area) more than 10,000 hectares and the present project= Nira Bhima tunnel is a basic component of the Krishna Marathwada project whose CCA is 33945 hectares. Therefore, the present project being a part of a Major Project and not a Minor project does not fulfill the condition of being the type of work entrusted to a Panchayat.
It is evident that as per the work order, the work deals with excavation of earth and depositing it on the sides. As per the above definitions, it is clear that Earthwork includes excavation and as per the contract the Earthwork constitutes more than 92.66% of the contract by value. Thus apparently all the conditions of the entry are fulfilled.
The entry says that the Composite supply should have earthwork forming more than 75% of the contract by value. Thus it very much clear from the wording that the Contract may be for something else- be it construction of building, tunnel, canal, road and in these contracts if the earthwork constitutes more than 75% then it qualifies for the above entry. If the intention of the Legislature had been to cover only pure contract of earthworks in it then a qualifying condition of more than 75% by value wouldn`t have been provided. Bench therefore find the reasoning of the AAR untenable.
ANALYSIS OF THE JUDGEMENT
It is seen that the Godavari Marathwada Irrigation Development Corporation is a “Government entity” as it is set up by an Act of the State Legislature – namely the Maharashtra Godawari Marathwada Irrigation Development Corporation Act, 1998. the function is that which is entrusted to Panchayat under 243G, bench find that as per the Central Water Commission guidelines, a Major Project is a project having CCA (Culturable Command Area) more than 10,000 hectares and the present project= Nira Bhima tunnel is a basic component of the Krishna Marathwada project whose CCA is 33945 hectares. Therefore, the present project being a part of a Major Project and not a Minor project does not fulfill the condition of being the type of work entrusted to a Panchayat.
It is evident that as per the work order, the work deals with excavation of earth and depositing it on the sides. As per the above definitions, it is clear that Earthwork includes excavation and as per the contract the Earthwork constitutes more than 92.66% of the contract by value.
Thus apparently all the conditions of the entry are fulfilled.
The entry says that the Composite supply should have earthwork forming more than 75% of the contract by value. Thus it very much clear from the wording that the Contract may be for something else- be it construction of building, tunnel, canal, road and in these contracts if the earthwork constitutes more than 75% then it qualifies for the above entry. If the intention of the Legislature had been to cover only pure contract of earthworks in it then a qualifying condition of more than 75% by value wouldn`t have been provided. Bench therefore find the reasoning of the AAR untenable.
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