Dr. Inder Jit Singh, Presiding Member

1. The above Nine First Appeals have been filed by the Appellants/Opposite Parties under Section 19 of the Consumer Protection Act, 1986 against the common order dated 13.04.2018 of the State Consumer Disputes Redressal Commission, Punjab (hereinafter referred to as the 'State Commission'), in Consumer Complaint Nos. 4/2017, 130/2017, 131/2017, 132/2017, 133/2017, 758/2017, 759/2017, 388/2016 and 391 of 2016. Since all the Appeals arise from a common impugned order and involve similar facts and common questions of law, they are being disposed of by this common judgment. However, for the sake of convenience, FA No. 1423 of 2018 (Manu Sehgal) is taken as lead case.

2. The Appellants, who were Opposite Parties Nos. 1 & 2 before the State Commission, are engaged in the business of real estate development. The Respondents/Complainants had booked residential flats in the Appellants' group housing project named "Wellington Heights" in TDI City, Sector 117, SAS Nagar, Mohali, Punjab. The case of the Complainants before the State Commission was that after making full payment of the total sale price and taking possession of their respective flats, the Appellants raised illegal demands and charges, including Value Added Tax (VAT), Service Tax, Escalation Charges, Car Parking Charges, Club Membership Fees, and excess External Development Charges (EDC). They also alleged various construction defects and deficiency in service. This issue was raised before this Commission and the orders dated 08.04.2024 and 04.-07.2025 passed by this Commission are reproduced below:

                   Order dated 08.04,2024 "'Heard learned counsel for the appellants and the learned counsel for the respondents. The impugned order grants six reliefs including that relating to VAT charges, service tax, car parking space, external development charges, dub membership charges, compensation for harassment and mental agony.

                   Learned counsel for the appellant has cited the judgment in the case of Va/ab Bhai Gobar Bhai Pate! Vs. Praveen Kumar Shankar Lal, 2016 SCC online NCDRC 411 paragraph no. 7 to 9 to urge that service tax is not a charge on business but on consumer. Learned counsel for the respondent/ complainant however submits that the details of such imposition of service charges have never been provided and the appellant has proceeded to recover it in a lump-sum way which is notjustified.

                   In relation to VAT charges the contention is that these are statutory charges which were payable by the fiat buyers. Learned counsel for the respondent/ complainant submits that VA T had to be paid by the appellant timely and in accordance with law.

                   According to the learned counsel for the complainant, if the appellant has defaulted in such payment and has been penalized, the said penalty or any extra burden of finances cannot be a charge on flat buyers.

                   Then there are external development charges which the learned counsel for the appellant contends that it is charge by the development authority under statuary provisions, and as such the said development charges have also to be borne by the fiat buyers in terms of the agreement itse/f. It is pointed out by the learned counsel 6 k k for complainant/ respondent that the external development charges were reduced from Rs. 120 to Rs. 40 sq. ft. by the authority and therefore the excess amount realised by the appellant has not been refunded.

                   It is then urged that so far as dub membership charges are concerned the dub was functional immediately upon a partial completion certificate which is being disputed by the otherside.

                   There are other charges imposed and compensation awarded which the learned counsel for the complainant submits could not have been levied, on the appellants. There is anotherjudgment sited by the learned counsel for the appellant in the case ofAlok Kumar Mittal vs. NHkant Town Planner' in CC No.417/2016 decided on 27.11.20 where paragraph 8 to 13 has been pointed out. In view of the ratio of the aforesaid order of this Commission, the issues raised herein have been answered and therefore, the same may be taken into consideration. A copy of the said order has been handed over to the learned counsel for the respondent/complainant.

                   In view of the objections that have been raised on behalf of the respondent/complainant the appellant will have to come out with a chart indicating the justification for the charges or the tax being demanded clearly indicating about any penalty imposed against the appellant and any orders passed in this regard. They may also explain how and on what basis they have imposed charges on the flat buyers on a pro-rata basis without any details. The said affidavit be filed within four weeks. Reply be filed by the learned counsel for the complainant/ respondent within four weeks thereafter. List the matter on 22.07.2024 at 2.00 PM."

                   Order dated 04.07.2025 "xxxx State Commission vide impugned order had ordered refunds on various items tike VAT, Service Tax, Ciub Membership fees etc. Although the Apartment Buyer's Agreement contains provisions with respect to escalation on account of variations on the costs of construction, increase in super area, increase in EDC etc. and also have clauses that all kinds of taxes / levies etc. will be borne by the allottees, the appellants herein were not able to give a detail break¬ up of such items as to how such charges for each allottees have been determined, how the basic prices mentioned in the said agreement have been enhanced. Even if the builder has a right to enhance prices or demand additional taxes levied by Government, it is a right of the allottees to be informed of the basis for such demand so that he/they feel assured that such demands are well within the four walls of the agreement which he has signed with the builder. As regards VAT, one of the issues raised by the counsel representing the respondents-complainants is that VAT demand made by the Government is primarily on account of penalties imposed on the builder on account of their failure to regularly pay the VAT on year to year basis and does not represent the normal VAT demands. He contends that they cannot be made to bear the penalties levied by the Government on the builder.

                   As regards the dub membership charges, counsel for the builder categorically stated that (a) dub exists, (b) it exists in the project, (c) OC for the dub has been obtained and (d) the dub is functioning.

                   However, the counsel for the respondents submits that the project in question covered in the present seven cases is Wellington Heights of the builder TDI and according to him there is no separate dub functioning in the project. Counsel for the appellants clarified that there is dub functioning in the overall project by the name TDI City Mohall.

                   xxxx"

3. The State Commission, vide its common order dated 13.04.2018, partly allowed the Complaints and issued directions to the Appellants, inter alia to:

                   (i) Execute conveyance deeds without demanding VAT charges;

                   (ii) Refund Service Tax collected from the Complainants with interest @9% per annum;

                   (iii) Refund Car Parking Charges with interest @9% per annum;

                   (iv) Refund excess EDC charges retained with interest @9% per annum;

                   (v) Refund Club Membership Charges with interest @9% per annum; and

                   (vi) Pay Rs.50,000/- as compensation for mental harassment and litigation costs.

4. Aggrieved by the said order, the Appellants have filed the present Appeals, primarily challenging the directions of the State Commission on the grounds that the impugned order is contrary to the terms of the Apartment Buyer's Agreements executed between the parties, ignores the statutory nature of various taxes and levies, and exceeds the jurisdiction of the consumer forum.

5. We have heard the learned counsel for the Appellants and the learned counsel for the Respondents at length and have perused the voluminous record, including the impugned order, the pleadings before the State Commission, the evidence adduced by the parties, and the written synopses filed by both sides.

6. Contentions of the Appellants:

                   6.1 The State Commission erred in holding that the Complainants are not liable to pay VAT. It is submitted that the transaction between the parties is in the nature of a 'works contract' as defined under the Punjab Value Added Tax Act, 2005 and Article 366(29-A)(b) of the Constitution of India. Reliance is placed on the Hon'ble Supreme Court's judgments in M/s Larsen & Tourbo Limited & Anr. v. State of Karnataka & Anr. , (2014) 1 SCC 708 and K. Raheja Development Corporation v. State of Karnataka, (2005) 141 STC 298 (SC), to argue that the transfer of property in goods involved in the execution of a works contract constitutes a deemed sale, and VAT is leviable on the value of goods at the time of incorporation. It is further contended that the Appellant Company has been assessed to VAT by the Excise and Taxation Department, and the said amount has been deposited, which is recoverable from the allottees on a pro-rata basis as per Clause 3 of the Apartment Buyer's Agreement, which makes the allottee liable to pay "all taxes, cess, including but not limited to taxes of all and any kind by whatever name called."

                   6.2 The State Commission also erred in directing the refund of Service Tax. It is argued that Service Tax is a statutory levy under the Finance Act, 1994, and the Appellants, being the service provider, were liable to collect and deposit the same. The construction of a complex intended for sale is deemed to be a service, and the Complainants, as recipients of the service, are liable to pay Service Tax. The decision of the Hon'ble National Commission in M/s More Builders and Promoters & 3 Ors. v. Manohar Gopalrao Ghatwai & 2 Ors. (Revision Petition No.296 of 2016) is distinguishable on facts.

                   6.3 With respect to car parking charges, it is submitted that the Apartment Buyer's Agreement specifically provided for separate allotment of car parking spaces, which were excluded from the computation of the super area. The price of the flat was calculated based on the super area, which did not include the parking spaces. Therefore, the Appellants were entitled to charge separately for the parking spaces as per the agreement. The judgment of the Hon'ble Supreme Court in Nahalchand Laloochand Pvt. Ltd. v. Panchali Co-operative Housing Society Ltd., AIR 2010 SC 3607, is not applicable to the facts of the present case as it was based on the specific provisions of the Maharashtra Ownership Flats Act, 1963.

                   6.4 Regarding Club Membership Charges, it is contended that the club building is complete and has been granted a partial completion certificate. Photographs of the club facilities have also been placed on record. It is argued that the Complainants are liable to pay the one-time membership fee for availing the club facilities, and the direction for refund is unjustified.

                   6.5 It is further argued that the State Commission failed to appreciate that the Apartment Buyer's Agreement was executed between the parties with free consent, and the terms thereof are binding. The Complainants cannot challenge the various charges after a lapse of several years, and the claim is barred by limitation and the principle of estoppel. Reliance is placed on Bharathi Knitting Co. v. DHL Worldwide Express Courier, (1996) 4 SCC 704, to argue that the Consumer Forum cannot go behind the terms of the agreement.

7. Contentions of the Respondents:

                   7.1 The State Commission rightly held that the Complainants are not liable to pay VAT as they purchased a built-up flat and not raw materials.

                   There is no works contract between the parties, and the transaction is simply a sale of an immovable property. The demand of VAT is illegal and amounts to an unfair trade practice.

                   7.2 The direction for refund of Service Tax is correct in law. The Appellants themselves carried out the construction work without engaging any other contractor, and therefore, there is no service provider and service recipient relationship. The Hon'ble National Commission in M/s More Builders and Promoters (supra) has held that in such cases, the builder is not entitled to charge Service Tax from the flat buyer.

                   7.3 The refund of car parking charges is justified as stilt parking cannot be sold separately by the promoter. The Hon'ble Supreme Court in Nahalchand Laloochand (supra) has clearly held that stilt parking space is a part of the common area and cannot be sold independently.

                   7.4 Since the club facilities were not fully functional at the time of filing the complaint, the refund of Club Membership Charges was correctly ordered, relying on Alop Kumar Mittal v. Neelkanth Town Planner Pvt. Ltd. & Anr., 2017(4) CPR 698 (NC).

                   7.5 The refund of excess EDC charges is also justified as the rates were reduced by the Government, and the Appellant Company failed to pass on the benefit to the Complainants.

8. Findings of this Commission:

Following issues arise in the present case:

                   8.1 VAT and Service Tax 8.1.1 One of the questions that arise for consideration in the present case is whether the Builder like the Appellant herein is entitled to charge both the VAT on the building construction materials purchased by it and service tax for the services provided. In the present case, the State Commission vide impugned order has held that the Builder is neither entitled to charge VAT nor Service Tax. It was the case of the Builder that the payment of due taxes towards the said apartment was integral part of the Agreement. The relevant clause in the Agreement, which empowers/entitles the Builder to charge all kinds of taxes to the allottee is reproduced below:

                   "2 Payment for taxes, wealth-tax, cesses by Apartment Allottee That the Apartment Allottee agrees to pay directly or if paid by the Company then reimburse to the Company on demand, all taxes, cess, including but not limited to demands, property taxes. Service Tax, electricity, water charges and Wealth Tax, taxes of all and any kind by whatever name called, whether levied or leviable now or in future on the said Complex and/or building(s) constructed on the said Portion of Land or the said Apartment, as the case may be, as assessabie/appiicabie from the date of application of the Apartment Allottee and the same shall be borne and paid by the Apartment Allottee as per prorate share."

                   8.1.2 In support of their contentions, the builder has relied upon following judgments:

                   (a) Usha Minhas and Another v. Ireo Pvt. Ltd., 2023 SCC Online NCDRC 1751, wherein this Commission held that:

                   1'14. By Finance Act, 2010 "Service Tax" has been imposed on the services of building construction. Central Government by Notification dated 24.06.2016 has amended Finance Act, 1994 with effect from 01.06.2016 and validated Service Tax and taken away the effect of the judgment of Delhi High Court dated 03.06.2016 passed in W.P. (Civil) No.2235 of 2011 Suresh Kumar Bansa! v. Union of India. There is nothing on record that 'service tax' collected/deposited prior to this judgment was refunded to the opposite party. Therefore on the basis of thisjudgment it cannot be said that Service Tax is not payable."

                   (Note: the notification is dated 22.06.2010 has amended Finance Act, 1994 with effect from 01.07.2010)

                   (b) Alop Kumar Mittal v. Neelkanth Town Planner Pvt. Ltd. & Anr.z CC/417/2016 decided on 27.11.2017, wherein National Commission held that:

                   "8. It would thus be seen that any tax paid or payable by the OP and/or its contractors in connection with the construction of the complex was to be paid by the fiat buyers on a proportionate basis. The learned counsel for the OP has placed on record a certificate dated 13.7.2016 issued by Virender K Gupta & Co., Chartered Accountants of the OP wherein it is stated that expenses amounting to Rs.107582569/- were incurred as per clause l.l(i) & (ii) of the Buyers Agreement. The OP has also filed an affidavit stating therein that the share of the complainant in the aforesaid taxes comes to Rs.273733/-. Hence, there is no merit in the challenge to the aforesaid charges and service tax on those charges."

                   (c) Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., (2020) 16 SCC 512 : 2020, wherein Hon'ble Supreme Court held that:

                   "xxxx

                   56. The ABA also contains the following provisions:

                   '2. Payment for taxes on land, wealth tax, cesses, etc. by allottee The allottee agrees and confirms to pay all government rates, tax on land, municipal tax, property taxes, wealth tax, Building and Other Construction Workers Welfare Fund (Cess), taxes, one-time building tax, luxury tax if any, fees or levies of all and any kind by whatever name called, whether levied or leviable now or in future by the Government or municipal authority or any other governmental authority on the said complex and/or the said building or land appurtenant thereto as the case may be as assessable or applicable from the date of the Application if the said apartment is assessed separately and if the said apartment is not assessed separately then the allottee shall pay directly to the authority concerned and if the same is levied on or paid by the Company or the allottee then the same shall be borne and paid by the allottee on pro rata basis and such determination of proportionate share by the Company and demand shall be final and binding on the allottee. However, if the said apartment is assessed separately the allottee shall pay directly to the government authority.

                   3. Amount paid by allottee with application The allottee has paid a sum of Rs 3f 00f000 (Rupees 3 iakhs only) along with the Application, the receipt of which the Company doth hereby acknowledge and the allottee agrees to pay the remaining price of the said apartment as prescribed in schedule of payments (Annexure III) attached with this agreement along with all other charges, taxes, securities, etc. as mentioned in this agreement and as per the demand raised by the Company in accordance with the agreement."

                   57. The ABA contains the definition of taxes in the following terms:

                   ""taxes" shall mean any and all taxes payable by the Company/LOC and/or its contractors, suppliers, consultants, etc. by way of value added tax (VAT), State sales tax, Central sales tax, works contract tax, service tax, cess, levies and educational cess and any other taxes levies, charges by whatever name called levied and collected by government agency in connection with Deveiopment/construction of the said apartment/said building/said complex."

                   58. The two certificates of the Chartered Accountant issued on 26-7-2013 and 9-8-2014 indicate that taxes inclusive of interest have been recovered. According to the appellants, the builder admitted that it had "not property discharged" his liability towards taxes for a period of thirty- six months between 2011-2012 and 2013-2014 and that tax dues were paid on 25-3-2015 together with penalty and interest. Hence, it has been urged that the liability to pay interest which arose on account of the default of the developer in discharging the tax liability on time cannot be fastened upon the buyers.

                   59. On behalf of the developer it has been submitted that when construction commenced in 2009, there was an absence of clarity on whether works contract tax was liable to be paid in relation to agreements between owners-developers and allottees of apartments where the apartments were to be delivered in future. In 2013, this Court delivered its judgment in Larsen & Toubro Ltd. v. State of Karnataka [2014) 1 SCC 708] as a result of which the liability towards works contract tax was adjudicated upon. Consequently, while computing the amount payable in the final statements of accounts, the developer passed on the interest burden but not the penalty on a proportionate basis in terms of Clause 1.10. The allottees were required to pay their proportionate share of the works contract tax in terms of the ABA and the final demand was raised at the time of the offer ofpossession.

                   60. The specific conditions contained in the ABA clearly imposed the liability to bear the proportionate share of taxes on the purchasers. Clauses 1.3 and 1.10 leave no manner of doubt in regard to the position. The developer has offered an explanation of why as a result of pending litigation, the dues towards works contract tax were not paid earlier. Indeed, if they were paid earlier, the purchasers would have been required to reimburse their proportionate share of taxes earlier as well. No part of the penalty imposed on the developer has been passed on to the purchasers. In view of the terms of the ABA and the explanation which has been submitted by the developer, there is no deficiency of service in regard to the demand of interest payable on the tax which was required to be deposited with the Revenue."

                   8.1.3 The rationale given by the State Commission for Builder not entitled to charge VAT and the same is not payable by the Complainants as the Complainants have not purchased any material from the OP Company. They have purchased a built-up apartment from the OP-Company in the project in question. Extract of relevant paragraph of the order of the State Commission, in this regard, is reproduced below:

                   13. Admittedly the flat/apartment in question was allotted to the complainants by the opposite party-Company, vide allotment letter dated 7.1.2015, Ex.C-2, for the basic sale price of ^20,84,863/-, in respect of which Apartment Buyer's Agreement was also executed on the same date i.e. 7.1.2015, Ex.C-3. The Schedule of Payment has been given in Annexure-II of that Agreement. The complainants paid the total cost of the flat including certain charges as per Annexure-II to the tune of T24,56,527/- and thereafter the opposite party-

                   Company delivered possession of the flat/apartment in question to them on the same very day i.e. 7.1.2015, vide letter Ex.C-4. When the complainants requested the opposite party- Company to execute conveyance deed of the flat in their favour as per clause 10 of the Apartment Buyer's Agreement, Ex.C-3, the opposite party-Company directed them to deposit VAT charges of 1,16,597.42P, vide letter dated 13.3.2015, Ex.C-5 and also demanded VAT interest of 710,935/- vide Final Statement of Account, Ex.C-7 before execution of conveyance deed. The first question to be decided by this Commission in the present complaint is as to whether the complainants are liable to pay VAT as asked for by the opposite party-Company, vide impugned demand dated 13.3.2015, Ex.C-5?

                   14. Admittedly the Final Statement of Account dated 10.9.2016 in respect of the fiat/apartment in question has been issued by the opposite party-Company to the complainants and a copy of the same is annexed on the record of the case as Ex.C-7 mentioning therein the details of the amounts due and the details of the amounts received by the opposite party-Company and the details of the balance payable under different heads. So far as the demand of VAT by the opposite party-Company from the complainants is concerned, I am of the view that the same is not payable by the complainants as the complainants have not purchased any material from the opposite party-Company. They have purchased a built-up apartment from the opposite party-Company in its Group Housing Complex under the name and style of WELLINGTON HEIGHTS in TDI City, Sector 117, SAS Nagar, Mohall. The definition of 'apartment' is given in Section 2(c) of the Punjab Apartment & Property Regulation Act, 1995 (in short, "PAPRA ") and the same is reproduced hereunder for the facility of reference:-

                   "(c) "apartment" whether called block, chamber, dwelling unit, flat, lot, premises, suite, tenement, unit or by any other name, means a separate and self-contained part of any property, including one or more rooms or enclosed spaces, located on one or more floors, or, any part or parts thereof, in a building, or in a plot of land, used or intended to be used for residence, office, shop, showroom, or godown or for carrying on any business, industry, occupation, profession or trade, or for any other type of independent use ancillary to the purpose specified above and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway, and includes any garage or room whether or not adjacent to the building in which such apartment is located, provided by the promoter for the use by the allottee for parking any vehicle or, as the case may be, for the residence of any domestic servant employed in such apartment;

                   Explanation. (1) If a basement, cellar, garage, room, shop or storage space is sold separately from any apartment, it shall be treated as an independent apartment and not as part of any other apartment or of the common areas and facilities:

                   Explanation. (2) Notwithstanding that provision is made for sanitary, washing, bathing or other conveniences as common to two or more apartments, the apartments shall be deemed to be separate and self-contained."

                   A perusal of the above reproduced definition of 'apartment' provides that the apartment means a separate and self-contained part of any property, including one or more rooms or enclosed spaces, located on one or more floors, or any part or parts thereof in a building or in a plot of land, used for intended to be used for residence, office, shop, showroom, or godown or for carrying on any business, industry, occupation, profession or trade or for any other type of independent use ancillary to the purpose specified above and with a direct exist to a public street, road or highway or to a common area leading to such street, road or highway, and includes any garage or room whether or not adjacent to the building in which such apartment is located, provided by the promoter for the use by the allottee for parking any vehicle or, as the case may be, for the residence of any domestic servant employed in such apartment. Thus, the opposite party- Company sold the built-up flat/ apartment to the complainants for their persona! use and residence. The complainants have not purchased any material from the opposite party-Company for which they are liable to pay VAT. The opposite party-Company must have purchased different building materials from different persons for the construction of the Housing Project and, as such, opposite party- Company might be liable to pay VAT on those materials but so far as the complainants buying the fiat/apartment in question from the opposite party-Company is concerned, they are not Hable to pay any VAT to it.

                   15. So far as the judgment of Hon'ble Supreme Court in "M/s Larsen & Toubro Limited & Anr. v. State of Karnataka & Anr." passed by Hon'ble Apex Court on 26.9.2013 in Civil Appeal No.8672 of 2013 (arising out of SLP (C) No. 17741 of2007) is concerned, the Hon'ble Apex Court has observed that for sustaining the levy of tax on the goods deemed to have been sold in execution of a works contract, in our opinion, three conditions must be fulfilled (i) there must be a works contract, (ii) the goods should have been involved in the execution of a works contract, and (Hi) the property in those goods must be transferred to a third party either as goods or in some other form. However, in the case in hand, there is no works contract involved because the complainants have only purchased the buitt- up/constructed flat/apartment as defined in the PAPRA. As such, when there is no element of works contract, there is no question of purchase of any material by the complainants. VAT is leviable only on the building materials used in the construction of the flat/apartment. Therefore, the complainants are not liable to pay any VAT to the opposite parties-Company. Moreover, there is no clause in the Apartment Buyer's Agreement with regard to payment of VAT by the complainants to the opposite parties-Company. Only mentioning of "all taxes covered" will not cover the same unless specifically mentioning the same. Otherwise also no material has been produced on record, through which the VAT has been made leviable by the Government on the purchase of the flat/apartment by the complainants from the opposite parties-Company. Therefore, it is held that the demand of fl,16,597.12P as VAT and fl0,935/~ as VAT interest in the demand tetter dated 13.3.2015, Ex.C-5, are not payable by the complainants. This demand is hereby quashed."

                   8.1.4 Similarly, the State Commission has held that the Service Tax charged by the Builder is not payable. Extract of the relevant para in this regard is reproduced below:

                   "16. So far as the payment of "service tax" is concerned, the matter is no more res integra. In the judgment dated 8.3.2016 of Hon'ble National Commission in Revision Petition No. 296 of 2016 (M/5 MORE BUILDERS AND PROMOTERS & 3 ORS. v. MANOHAR GOPALRAO GHATWAI & 2 ORS.) the facts were that the complainants/ respondents paid service tax to the petitioner from whom they had agreed to purchase residential flats in a complex which the petitioner was to construct. The aforesaid service tax was collected from them at the stage of the execution of the sale deed in the year 2006.

                   Alleging that the aforesaid collection of service tax was without authority of law, they demanded the refund of the said amount. The petitioner, however, claimed that it had already deposited the said amount with the Government and also sent a copy of the challan, whereby the said amount was deposited by it, to the compiainants/respondents. The compiainants/respondents tried to obtain refund from the Government but were told that the tax could only be refunded to the person who had deposited the same. Alleging deficiency on the part of the petitioner in rendering service to them, the respondents/complainants approached the concerned District Forum by way of a complaint, seeking refund of the amount which had been collected from them towards payment of service tax along with interest, compensation etc. The petitioner contested the complaint on the ground that they had collected the service tax because of some ambiguity in the circulars issued by the Government and had deposited the said tax with the Government. It was further stated in the reply that though the petitioner had already applied for refund of the said amount, the refund had not been made: The District Forum, vide its order dated 8.3.2010, directed the petitioner to refund the amount collected from the complainant towards service tax along with interest @ 9% per annum from the Redressa! date of passing the order until the date ofpayment. A sum of Rs.2,000/- was awarded to the complainant as cost of litigation. Being aggrieved by the same, the petitioner filed appeal before the concerned State Commission, which was dismissed, vide order dated 15.9.2015. The contention of the learned counsel for the petitioner in the revision petition before the Horible National Commission was that since the service tax was collected bonafidety and deposited with the Government, there was no deficiency on the part of the petitioner in rendering services to the respondents and consequently, the District Forum did not have jurisdiction to entertain the complaint. Honbie National Commission has held in para 5 as under:-

                   ... We, however, are not inclined to accept the said contention. In our opinion, once it was clarified that service tax was not payable on the transaction between the petitioner and the complainants and pursuant to the said clarification the complainants applied to the petitioner for refund of the amount collected from them towards payment of service tax, the petitioner ought to have made payment to them though it could have sought refund of the said amount from the Government with appropriate interest. The petitioner having not refunded the said amount despite clarification given by the Government and demand made by the complainants, it was deficient in rendering services to the complainants as far as refund of the amount collected from them towards them towards payment of service tax was concerned."

                   In this view of the matter, it is held that the complainants are entitled to the refund of the amount of f73,800/- collected from the complainant on account of service tax. However, the opposite party- Company is at liberty to claim the refund of the same from the Government in accordance with law ifso advised."

                   8.1.5 We have considered these issues in the light of provisions of the Consumer Protection Act, 1986 and relevant case laws on the subject. Consumer Protection Act, 1986 primarily covers Complaints relating to three aspects:

                   a) Defective Goods

                   b) Deficiency in service

                   c) Unfair trade practice or restrictive trade practice by any trader or service provider.

                   8.1.6 Section 2(i) defines 'goods' to mean goods as defined in Sale of Goods Act, 1930. The Sale of Goods Act, 1930 defines goods as follows:-

                   "goods" means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract ofsale;

                   Section 2 (o) defines services as follow:

                   "(o)"service" means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract ofpersona! service; "

                   8.1.7 Further, Section 2(f) and 2(g) define 'defect' in relation to any good and 'deficiency' in relation to any service. These two Sections are also reproduced below:

                   (f) 'defect7' means any fault, imperfection or shortcoming in the quality, quantity, potency, purity or standard which is required to be maintained by or under any law for the time being in force or under any contract, express or implied, or as is claimed by the trader in any manner whatsoever in relation to any goods;

                   (g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner ofperformance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;

                   8.1.8 Now the question arises is, in the case of Housing Construction, where a builder is selling flats/units to an allottee, whether it constitutes sale of a 'good' or provision of a 'service' under the provisions of Consumer Protection Act. From the examination of the relevant legal provisions, it is clear that the VAT is chargeable to goods while service tax is chargeable to services.

                   8.1.9 A careful perusal of provisions of the Consumer Protection Act, 1986, shows that in the context of housing construction the sale of a flat/unit by a builder to an allottee is treated as service under the category 'Housing Construction' and not a sale of goods. The Consumer Protection Act does not envisage sale of an immovable property, whether a flat or unit or building. When a builder allots any such flat/unit to the allottee, either through an allotment letter or through a Builder Buyer Agreement, it fixes the basic sale price as well as total consideration, duly keeping in view his estimated cost of construction, including the estimated cost of the materials he may have to procure during the construction phase. The cost of such materials include the prevailing taxes like VAT etc. on such goods, which are payable on such material/goods. Hence, once a tentative sale consideration/basic sale price of the unit in question has been fixed, it can be enhanced by the builder only in situations specifically defined in the Agreement with the allottee. As VAT is a tax on the materials/goods purchased by the builder during the construction phase and forms part of the total costs of such materials and consequently the total sale consideration of the unit in question, considering that under the Consumer Protection Act, the sale of unit/flat is not treated as sale of good, we are of the considered view that notwithstanding any provision in the agreement that all such taxes/increase in taxes are payable by the allottee, which according to builder, includes VAT, the builder is not entitled to charge VAT/any increase in VAT during the construction phase. Moreover, in the present case, as has been rightly observed by the State Commission, VAT is not specifically mentioned in the relevant clause of the agreement, although Service Tax is specifically mentioned. However, as the sale of unit constitutes a service under the provisions of the Consumer Protection Act, and if a service tax is payable on such provision of service under the provisions of any Law/Rule/Regulation by the Government at that point of time, and such tax has indeed been paid to the concerned Government authorities, the builder is entitled to charge such service tax to the allottee. In the present case, as regard Service Tax, it is the case of OP builder that as per the agreed terms and conditions of the agreement, taxes of all and any kind by whatever name called shall be borne by the Apartment allottee and Complainant cannot be permitted to resile from the same.

                   8.1.10 Service Tax is payable on services of Building Constriction as per Finance Act, 2010, as observed by this Commission in Usha Minhas (Supra), the Service Tax came into force w.e.f. 01.07.2010 and in the present case, Allotment Letter/Agreement/Possession etc., all are dated 07.01.2015 and Service Tax has indeed been paid by OP builder. Hence, we are of the considered view that while the reasoning given by the State Commission for builder not being entitled to charge VAT, may not be fully correct, the final finding that VAT is not payable by the allottee is correct. However, the k findings of the State Commission with respect to service tax is not correct. Hence, the Complainant is liable to pay the Service Tax at applicable rates, nut not the VAT.

                   8.2 Car Parking Charges 8.2.1 The State Commission relied on the judgment of the Hon'ble Supreme Court in Nahalchand Laloochand Pvt. Ltd. v. Panchali Co-operative Housing Society Ltd. AIR 2010 SC 3607, to hold that the stilt parking cannot be sold separately. However, this judgment was rendered under the specific provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 (MOFA). MOFA provided for a model form of agreement (Form V) which did not contemplate separate charges for parking. The Court held that the stilt parking space is not an 'apartment' and forms part of the common areas and facilities.

                   8.2.2 The present case is governed by the Apartment Buyer's Agreement executed between the parties. A perusal of the agreement, particularly Clause 1.9 and Annexure-I, shows that the super area of the apartment specifically excludes the open/covered car parking areas. The basic sale price was calculated only on the super area. The parking spaces were allotted separately against payment of specific charges. This was a contractual arrangement between the parties. The Hon'ble Supreme Court in Nahalchand Laloochand(Supra) itself observed that the promoter is entitled to charge price for common areas and facilities from each flat purchaser in proportion to the carpet area. In the present case, since the parking area was explicitly excluded from the computation of the super area, the Appellants are justified in charging for it separately. The principle laid down in Nahalchand applies only where the parking area is part of the common area included in the saleable area. Therefore, the direction of the State Commission to refund the car parking charges is set aside. Moreover, the State Commission in this case has directed to refund the amount of Rs. 1,00,000/- deposited by the Complainants. However, the perusal of the Apartment Buyer Agreement shows that in this case, the Complainants have opted for an open parking costing Rs.50,000/-. Hence, the State Commission's order ordering refund of Rs.1,00,000/- is prima fade wrong, even if such parking amount was refundable.

                   8.3 Club Membership Charges 8.3.1 The State Commission, relying on Alop Kumar Mittal v. Neelkanth Town Planner Pvt. Ltd. 2017(4) CPR 698 (NC), held that Club Membership Charges can be recovered only when the club is fully functional. The Appellant has now produced a partial completion certificate for the club building dated 30.10.2017 and photographs showing the club facilities. However, the impugned order was passed on 13.04.2018, and at that time, the State Commission observed that no completion certificate was on record. In our view, the direction for refund of Club Membership Charges cannot be sustained in its present form. The Complainants are prospective users of the club facilities. The proper course of action is to hold that the Club Membership Charges shall be payable by the Respondents when the club becomes fully functional and is ready to provide the promised amenities to the residents. The direction for immediate refund of Rs.50,000/- is therefore modified. The Appellants shall be entitled to demand and collect the Club Membership Charges only upon the club becoming fully functional. As regards Club Membership is concerned, during the hearing Counsel for the Appellant had submitted that the Club is functional now. However, the Complainants had submitted that the project in question i.e. the Wellington Heights, there is no separate Club functioning. Counsel for the Appellant fairly admitted that the club is functioning in the overall project by the name TDI City, Mohali. It was the case of the Complainants that the said club which is in another project is quite at a distance from the present project. Further, during the hearing, it was submitted by the Counsel for the Appellant that in case, the Complainant is not willing to avail the Club facilities, they have no objection in refunding the Club Membership amount.

                   8.3.2 As regards Club, the agreement contains no specific details about the Club, whether there will be a separate club in the 'Wellington Heights' or in the overall project of the OP TDI City Mohali.

                   8.3.3 Hence, with respect to the Club, we are of the considered view that in case the Complainant does not wish to avail the Club facilities, which is not within the premises of the project in question but at some distance in another project of Appellant/Builder, they will have the option to do so and in this situation, Appellant/Builder will refund them the Club Membership. However, if he still wishes to avail this facility even if it is located in another project of the builder located at some distance, he will have to pay the Club Membership Fee as per the Agreement.

                   8.4 External Development Charges (EDC) 8.4.1 The State Commission directed the refund of excess EDC charges after the rates were reduced from Rs. 120/- per square foot to Rs.40/- per square foot. The Appellant have not denied that EDCs got reduced by the competent authority from Rs. 120/- per sq.ft, to Rs.40 per sq.ft. However, it is the case of the Appellant/Builder that such difference in the EDCs have since been adjusted in the statement of accounts of all the Complainants including the Complainant in the present case. During the hearing, they drew our attention to the final statement in this regard indicating adjustment towards the amounts payable by the Complainants, on account of such reduction.

                   8.4.2 Hence, if the Appellant Builder has already adjusted the difference on account of reduction in EDC from the total amount payable, the direction of the State Commission to again refund such excess amount of Rs.95,308/- does not seem tenable. Accordingly, on this issue we hereby direct the Appellant/Builder to issue a detailed statement, clearly indicating the dates on which such excess amount was adjusted and the amount of such adjustment. If such amount has been adjusted within 30 days of the order of the competent authority reducing the EDCs from Rs. 120/- to Rs.40/- per sq.ft., no interest is payable, however, if there is any delay in adjustment of such amount beyond 30 days, the Appellant/Builder will be liable to pay interest @9% p.a. on such reduction.

9. In view of foregoing, we partially allow the Appeal with certain modifications to the orders of the State Commission and with following modified directions:

                   i) The Appellant/Builder is not entitled to charge VAT/any increase in VAT during the construction period. Hence, the Appellant/Builder is directed to execute the conveyance deed of the flat in question in favour of the Complainant(s) without demanding VAT charges as has been held by the State Commission.

                   ii) The Appellant/Builder is entitled to charge the service tax. Hence, the direction of refund of Rs.73,800/- charged by the OP Company on account of Service Tax along with interest @9% p.a. from the date of deposit till the date of actual payment, are set aside.

                   iii) Appellant/Builder is entitled to charge on account of parking space.

                   Hence, the direction of the State Commission to refund Rs, 1,00,000/- charged by OP Company on account of car parking space along with interest @9% p.a. from the date of deposit till the date of actual payment, is set aside. However, it is made clear that as in the present case, the Complainant has taken open parking costing Rs.50,000/-, the Appellant/Builder can charge only this amount.

                   iv) As regards excess EDCs, as the Appellant/Builder claims to have already adjusted the excess EDCs from the statement of accounts of the Complainant, direction of the State Commission to refund Rs.95308/- on account of excess EDC along with interest @9% p.a. is set aside. However, this is subject to the condition of Appellant/ Builder issuing a fresh statement of accounts, clearly indicating the date when such excess EDCs were adjusted towards the amount payable by the Complainant. If such adjustment/refund was done after a period of 30 days from the date when such EDCs were reduced by the competent authority, such refund/adjustment shall carry interest @9% p.a. from the expiry of 30 days of the order of the competent authority till the date of adjustment.

                   V) As regard Club Membership charges, if the Complainant does not wish to avail club facilities which are available in the adjoining project of the Appellant/Builder, he may intimate the same to the Appellant Builder in writing within one month of this order. In this situation, the Appellant/Builder shall not be entitled to charge club membership fee or any other club related charges. In case such fee has already been charged, the same shall be refunded along with interest @9% p.a. from the date it was charged/received till the date of refund. However, if the Complainant wishes to avail such facilities even though located in the adjoining project of the Appellant/Builder, he is liable to pay the Club Membership Fee as per terms and conditions of the agreement.

                   vi) Directions of the State Commission with respect to payment of Rs.50,000/- to the Complainant as compensation for mental harassment and agony etc. including costs of litigation, is maintained.

10. The Appellant/Builder shall implement the orders of the State Commission, as modified by above said directions of this Commission, within a maximum of 45 days. If any amount is payable/ refundable to the Complainant as per this order, the same should be paid/refunded within 45 days, failing which, the amount payable at the end of 45 days shall carry interest @ 12% p.a. from the expiry of 45 days till the date of refund.

11. Appeal 1423 of 2018 stands disposed off as per above directions.

12. Other 8 First Appeals viz FA Nos. 1424,, 1425, 1426, 1427, 1428, 1429, 2133, and 2134 of 2018 are also disposed off in terms of our directions in FA No. 1423 of 2018. The Complainants in these cases will also be entitled to same benefits as given in FA/1423/2018 and Appellant/Builder shall be liable to implement directions of this Commission in these 8 cases as well in the lines of directions in FA/1423/2018.

13. The pending IAs in all the 9 FAs, if any, also stand disposed off.