Remanded

M/s. Barbrik Project Ltd. v. (Deleted) State of Chhattisgarh

Chhattisgarh HC22 Jul 2024TAXC/23/2022

Case brief

AI extract

What is this about?

This reference application challenges a Tribunal order denying input tax rebate. The High Court directed the Tribunal to state a case and refer two questions of law regarding the deemed sale of goods in road construction and the applicability of mining-related conditions for rebate claims.

What did the court decide?

The Tribunal was directed to state a case and refer the matter for adjudication on two specific questions of law.

M/s. Barbrik Project Ltd. Vs (Deleted) State of… — GST and Indirect Tax | Chhattisgarh HC (2024)

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NAFR

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HIGH COURT OF CHHATTISGARH, BILASPUR

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TAXC No. 23 of 2022

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M/s. Barbrik Project Ltd. Nehru Park Road, Surajpur, District: Surajpur (C.G.)

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---- Applicant

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Versus

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1. (Deleted) State of Chhattisgarh as Per Hon'ble Court Order Dated 1701-2023.

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2. The Commissioner of Commercial Tax, GST Bhawan, Atal Nagar Sector-19, Nava Raipur (C.G.)

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3. (Deleted) The Chairman as per Hon'ble Court Order Dated 17-012023.

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---- Respondents

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For Applicant : Mr. S. Rajeswara Rao, Advocate. For Respondent : Mr. Akhilesh Kumar, G.A.

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Hon’ble Shri Justice Goutam Bhaduri J.

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Hon’ble Shri Justice Radhakishan Agrawal, J. Judgment on Board

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Per, Goutam Bhaduri Judge

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23.07.2024

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1. The present is a Reference Application under Section 55 (3) of CG VAT Act, 2005.

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2. According to the applicant, he is engaged in execution of Civil

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Contract, Building and Road Construction Works and the Mining activities. The reference is made to Annexure-RA/2, which is registration certificate at Serial No. 106 and 14 reflect the same indicating nature of activities registered.

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3. The applicant contended that mining activities is restricted to extraction of boulder and conversion of boulder into Gitti (crushed stone) for use for contract business and eventually the construction of road, which is being done by the applicant, road is handed over to the State. Therefore, it would be a deemed sale for the purpose of goods for which the registration exists and it cannot be confined to nomenclature of ‘work contract alone’.

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4. It is submitted that, on a first instance though the registration Annexure-RA/2 exists, the first Assessing Authority by an order dated 20.12.2017 did not dispute about the registration, but the input tax rebate which was claimed for the components was disallowed without any justification on the ground that it did not fall under capital goods as per notification dated 28.04.2006.

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5. The said order was subject of appeal before the Additional Commissioner, Commercial Tax. The First Appellate Authority by order dated 27.02.2019 held that the nature of business has been stated as work contract and the applicant is not registered for mining activities. The input tax rebate is only allowable on deemed sale transferred to contractee and in this case there is no deemed sale for want of transfer to contractee. The submission made is that in the

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construction of road for the State, after completion and handing over of the road, it would be deemed sale to the extent of material and input tax rebate is mandatorily allowable.

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6. This order was subject of appeal before the Commercial Tax Tribunal. The Commercial Tax Tribunal by its order dated 25.08.2021 has completely went on a different line and observed that the applicant is not registered as manufacturer or engaged in mining work though prima facie it appears to be wrong and further recorded that the claim made by the applicant is not found to be for capital goods and on this count, it was disallowed.

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7. According to the applicant, which is evident from the registration certificate, the applicant purchased the capital goods mentioned in the notification dated 28.04.2006. The construction of the road having been transferred, it would be a deemed sale for the purpose of the material used. Thereafter, the reference was filed by the applicant under Section 55 (1) of the CG VAT Act, 2005 and the learned Tribunal on different grounds dismissed the reference by holding that statement regarding mining work was not filed before the Mining Department and no royalty was paid for said work. It appears that the said observation was made, though it was nobody's case, even if not of the first Assessing Authority of the applicant.

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8. It has been stated that there is no condition of filing statement regarding mining work before the Mines Department and regarding royalty payment made in Section 13 of the Act of 2005 for claiming the

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input tax rebate. The observation made, it appears was not before the applicant to meet it, consequently, this reference is filed.

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9. We went through the order of the First Assessing Authority, the Appellate Authority and the Tribunal.

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10. Having gone through these facts of the case and the entries made in the registration certificate which the applicant is in hold, we are satisfied that the refusal for the reference was not justified, therefore, the Tribunal is requested to state the case and refer for adjudication on the following questions of law:

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A. Whether in the facts and circumstances of the case and in law, the impugned order is perverse having been based upon irrelevant material and by ignoring relevant evidence/material qua provisions of Section 13 of the Chhattisgarh Value Added Tax Act, 2005 for the purpose of determination of impugned issues?

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B. Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in confirming denial of input-tax rebate of Rs. 43,28,358/- by holding that applicant is not registered as manufacturer nor engaged in mining work and there was no transfer of goods and in absence of transfer or deemed sale, hence it is not entitled for input tax rebate?

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11. Accordingly, the application is disposed of with the directions as above.

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Sd/Sd/( Goutam Bhaduri ) ( Radhakishan Agrawal ) JUDGE JUDGE

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Saurabh

M/s. Barbrik Project Ltd. v. (Deleted) State of Chhattisgarh

Case brief

What is this about?

What did the court decide?

M/s. Barbrik Project Ltd. v. (Deleted) State of Chhattisgarh

Case brief

What is this about?

What did the court decide?

What the court decided

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