M/S Bharat Rail Automations Pvt. Ltd., Vs Commissioner of Commercial Tax

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Page 1 of 6

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(Tax Case Nos.92/2023 & 91/2023)

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Digitally signed by SISTA SISTA SOMAYAJULU SOMAYAJULU Date: 2025.04.09 12:57:14 +0530

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2025:CGHC:16355-DB

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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TAXC No. 92 of 2023

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M/s Bharat Rail Automations Pvt. Ltd., Registered Office at 202 Kamala Hub, Near Costa Coffee Restaurant, Gulmohar Raod (NS Road 1), JVPD Scheme, Ville Parle West, Mumbai 400 059, Branch Office at 307, 3^rd Floor, Maruti Heritage, Pachpedi Naka, Raipur, District Raipur (C.G.), Through its Director and Authorized Representative namely Bhupesh V. Dhabalia, S/o Vinod Rai Dhabalia, R/o 201 Kamala Hub, Cross Road No. 1, Ville Parle West, Mumbai 400 059 (Maharashtra)

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--- Applicant

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Versus

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Commissioner of Commercial Tax, Behind Raj Bhavan, Civil Lines, Raipur (C.G.)

--- Non-applicant

AND

TAXC No. 91 of 2023

M/s Bharat Rail Automations Pvt. Ltd., Registered Office at 202 Kamala Hub, Near Costa Coffee Restaurant, Gulmohar Raod (NS Road 1), JVPD Scheme, Ville Parle West, Mumbai 400 059, Branch Office at 307, 3^rd Floor, Maruti Heritage, Pachpedi Naka, Raipur, District Raipur (C.G.), Through its Director and Authorized Representative namely Bhupesh V. Dhabalia, S/o Vinod Rai Dhabalia, R/o 201 Kamala Hub, Cross Road No. 1, Ville Parle West, Mumbai 400 059 (Maharashtra)

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--- Applicant

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Versus

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Commissioner of Commercial Tax, Behind Raj Bhavan, Civil Lines, Raipur (C.G.)

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--- Non-applicant

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Page 2 of 6

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(Tax Case Nos.92/2023 & 91/2023)

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For Applicant : Mr. Hari Agrawal, Advocate. For Non-applicant : Mr. Rahul Tamaskar, Advocate.

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Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Deepak Kumar Tiwari, JJ.

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Order On Board (08/04/2025)

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Sanjay K. Agrawal, J.

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Since both the applications involve common question of law and fact, they both were clubbed together, heard together and are being disposed of by this common order.

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The applicant herein namely, M/s Bharat Rail Automations Pvt. Ltd. is a railway contractor engaged in work contract and is assessed for VAT, ET & CST for its tax, interest and penalty by the Commercial Tax Officer for the financial year 2011-12, as it was awarded a works contract vide Contract No.RVNL/S&T/BSP/BYTURK/67 of 8,28,31,169-73 ps. by Rail Vikas Nigam Ltd. (RVNL).₹ The contract was executed on 24-6-2011. The contract involved supply, installation and commissioning of an Electronic Interlocking System. It is the case of the applicant that pursuant to the award of works contract, desired goods have been transported from Bhiwandi (Rajasthan) godown of Shriram Cables to Tilda, Chhattisgarh. It is the further case of the applicant that while filing VAT return, the applicant has shown a receipt of ₹ 2,01,32,039/- for the aforesaid purchases and other similar

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Page 3 of 6

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(Tax Case Nos.92/2023 & 91/2023)

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purchases to be an inter-State sale being covered under the definition of Section 3(a) of the Central Sales Tax Act, 1956 on the ground that the movement of goods occasioned in pursuance of the preexisting contract and the goods are directly sent to the Railways by its approved manufacturer, who happens to be outside the State of Chhattisgarh. The Assessing Officer on 20-5-2016 issued an order rejecting the applicant’s aforesaid claim of interState sale of 2,01,32,039/- holding that there is no conceivable₹ link between movement of goods from outside the State and further held the above to be the sale in the State of Chhattisgarh and imposed VAT to the extent of 5% along with interest thereby total imposition of VAT to be ₹ 13,76,234/- against which the applicant preferred an appeal before the Additional Appellate Deputy Commissioner, Commercial Tax, who rejected the appeal on 29-12-2017 and further appeal was filed before the Chhattisgarh Commercial Tax Tribunal, Raipur which also suffered same fate and appeal was dismissed by order dated 10-3-2022 feeling aggrieved against which the applicant filed an application seeking reference of questions of law to the High Court which was also dismissed by order dated 14-2-2023 holding that TDS was issued by RVNL in favour of the applicant and as per the proviso to Section 27(2) of the Chhattisgarh Value Added Tax Act, 2005 (for short, ‘the Act of 2005’), TDS is not required for inter-State trade

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Page 4 of 6

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(Tax Case Nos.92/2023 & 91/2023)

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and as such it is an inter-State trade and ultimately, the applicant filed an application under Section 56 of the Act of 2005 for rectification of mistakes which also came to be rejected by the Chhattisgarh Commercial Tax Tribunal by order dated 15-2-2023 holding that TDS is not required for inter-State trade and there is no evidence that goods received by the applicant is transported out of the State of Chhattisgarh and also the movement of goods is condition precedent to apply Section 3(a) of the Central Sales Tax Act, 1956. Finally, the applicant filed the instant applications under Section 55(2)(b) of the Act of 2005 requiring the Tribunal to make a reference.

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Mr. Hari Agrawal, learned counsel appearing for the applicant in both the applications, would submit that in light of the decision of the Supreme Court in the matter of Commissioner, Delhi Value Added Tax v. ABB Limited 1, it is undoubtedly a case of inter-State trade as the desired goods have been transported from Bhiwandi (Rajasthan) godown of Shriram Cables to Tilda, Chhattisgarh and thus, a case of inter-State trade, therefore, the applications be allowed and the Tribunal be called upon to make reference by formulating question of law before this Court.

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Mr. Rahul Tamaskar, learned State counsel, would submit hat no question of law arises for consideration in these two applications.

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1 (2016) 6 SCC 791

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Page 5 of 6

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(Tax Case Nos.92/2023 & 91/2023)

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We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record with utmost circumspection.

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Having heard learned counsel for the parties and having regard to the facts and circumstances of the case, we are of the opinion that the Tribunal is not justified in rejecting the making of reference to the High Court and accordingly, the Tribunal is hereby called upon to make reference on the following two common questions of law in both the instant applications: -

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Whether the transaction in question is inter-State sale within the meaning of Section 3(a) of the Central Sales Tax Act, 1956 in view of the fact that desired goods have been transported from Bhiwandi (Rajasthan) godown of Shriram Cables to Tilda, Chhattisgarh, in light of the decision of the Supreme Court in Commissioner, Delhi Value Added Tax (supra)?

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Whether only on deduction of tax under Section 27 of the Act of 2005, the transaction, which is movement of goods from outside the State, amounts to intra-State sale?

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