M/S Ashoka Buildcon Limited vs. Commissioner Of Commercial Tax

Held

The Court held that a substantial question of law arises for consideration. The Court did not decide the merits of the case but rather directed the Tribunal to make a reference to the High Court on the substantial question of law identified. The question of law is: "Whether the Tippers & Dumpers used in construction/manufacture of roads are covered in the definition of ‘Capital Goods’ as defined under Section 2(e) of the VAT Act r/w Sl. No.26 of VAT Notification No.45 dated 28.04.2006?". The Court found that this question requires determination by the High Court. No specific finding was given on the eligibility of ITC for the applicant's vehicles, nor was any relief granted at this stage. The operative direction is for the Tribunal to make a reference.

Facts

The applicant, M/s Ashoka Buildcon Limited, is challenging a re-assessment order passed by the Assessing Officer. The Assessing Officer disallowed Input Tax Credit (ITC) on Tippers and Dumpers used in road construction, amounting to Rs. 25,19,589/-. The officer held that these vehicles were not covered by Notification No. 45 dated 28.04.2006. The applicant's appeal before the Appellate Authority was dismissed, upholding the assessment order. Subsequently, an appeal to the Chhattisgarh Commercial Tax Tribunal was also dismissed, with the Tribunal ruling that ITC on capital goods is only claimable if used for sale, manufacturing, or mining. The Tribunal rejected the applicant's request to refer a question of law to the High Court. This application is filed under Section 55(2)(b) of the CG Value Added Tax Act, 2005, seeking a reference of a question of law.

Key Issues

1. Whether Tippers & Dumpers used in construction/manufacture of roads are covered in the definition of ‘Capital Goods’ as defined under Section 2(e) of the VAT Act read with Sl. No. 26 of VAT Notification No. 45 dated 28.04.2006? The applicant argued that Tippers and Dumpers used in road construction should be considered capital goods eligible for ITC. The respondent (revenue) contended that these vehicles are not included in the specified categories for ITC claims under the relevant notification and that ITC on capital goods is only permissible for sale, manufacturing, or mining activities, as held by the Tribunal. The applicant relied on the definition of 'Capital Goods' under Section 2(e) of the VAT Act and the scope of Notification No. 45 dated 28.04.2006. The revenue's argument was based on the Tribunal's interpretation of the notification and the purpose for which capital goods are used.