A division bench of Acting Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw stayed the Delhi government's February 13 order and said "no coercive action would be taken by the government against it (Emaar)" till August 3, 2012, the next date hearing of the case.
The Trade and Taxes department of Delhi Government has issued an assessment order for 2008-2010, demanding a VAT of over Rs 314 crores from the private builder Emaar MGF over the sale of the Games village flats to its buyers.
Appearing for the builder firm, senior counsel Harish Salve submitted that VAT cannot be levied on the amount received by the company from its prospective flat buyers and the company has no liability to pay VAT on works contract.
"We don't have any such liability as VAT is not applicable on the sale of immovable assets," said Salve.
The group, had been entrusted the task of building the high-end apartments under the Public Private Partnership (PPP) model with Delhi Development Authority (DDA).
Of the total 1,168 flats, 723 are owned by DDA and the rest belong to Emaar-MGF.
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The real estate developer, a joint venture between Dubai-based Emaar and Indian company MGF, denied that they owe any liability to the state government and sought the court to quash the order.
There are 34 towers in the village. The village was used as residential complex for the international players who had come to participate in the international sports event.