MVAT on Goods Involved in Performance of Employment Contract on ONGC Platform: Bombay HC Rejects Petition
While considering a written motion for alternative remedy ground, a divisional bench of the Bombay High Court dismissed the same petition involving the levying of VAT by the State of Maharashtra on the property involved in the execution of the employment contract, executed on the ONGC platform.
The petitioner, HAL Offshore Ltd, has come to court claiming that the State of Maharashtra has no jurisdiction to levy a tax on the property involved in the performance of the contract of employment, performed on the rig CGSB.
According to the petitioner, the petitioner had provided the water production services to the ONGC platform. On this platform, sea water, that is to say salt water, was converted into drinking water. Machines running said process are owned by ONGC. The petitioner had only provided the labor and the chartered vessel on the highest basis. The petitioner had his own chartered vessel and possession and control of the vessel still remained with the petitioner.
A bench of Judge RD Dhanuka and Judge SMModak ruled that “if this Court grants this motion challenging the order of assessment without ordering the petitioner to avail himself of another remedy available under Section 26 of the Act MVAT and if the petition is dismissed on its own merits, the petitioner, in this case, would not be able to avail itself of an alternative remedy later by way of appeal under Article 26 of the MVAT Act, which would be prejudicial to the interest of the Petitioner. For this reason also, we are not inclined to entertain this Petition in Brief challenging the Assessment Order directly in this Petition in Brief.”
Granting interim relief to the petitioners, the Court held that “the petition for writ is dismissed as not being admissible on account of another effective remedy under section 26 of the Tax Act 2002 Maharashtra value added tax which the petitioner did not use Prayer clauses (b) and (c) of the petition challenging the validity of Section 26 of the Maharashtra Value Added Tax Act 2002 are being decided in United Projects v. The State of Maharashtra & Anr. in Written Application No. 2883 of 2018 and therefore should not be decided in this application.”
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