Applicability of Service Tax and VAT on resale of Property before

I am looking to purchase a apartment in Bangalore, Karnataka on a resale. There are 3 parties involved here. The original buyer, lets call this individual A. Me, the second buyer. Lets call me B. And the Builder of the apartment. Lets call them C. The first buyer, A, purchased it in the year 2012 and has got a sale agreement for the same. The entire money has gone to the builder from the first buyer, A. Lets call this an amount X. The builder, C, has collected tax, both Service Tax and VAT on this from the first buyer. In the meantime, the apartment has been constructed and and OC has been granted for the building in the month of August 2016. Now, I, the second buyer B, have created an assignment agreement to purchase the apartment from the original owner, A, with a value mentioned as Y, which is greater than X. So, the assignment value AV = Y - X Please note that this difference is the profit income of the first buyer, A. He is going to show this in his income tax returns. Now, the builder is asking us to pay the service tax and VAT on the differential amount AV at the rate of 16.15% on the entire amount AV. My question here is, is the tax even applicable here, since the increased money is not going to the builder, its going to the first buyer, from whom I am buying the house, and that he is going to pay the income tax on that? Also, since the OC is obtained before this transfer of property, are the taxes even applicable? Also, please note, that the house has still not been registered on anyone's name, the building is ready for possession and people have already started living. Thank you in advance.