M/S. Barbrik Project LTD. vs. (Deleted) State Of Chhattisgarh

Facts

M/s. Barbrik Project Ltd., engaged in civil contract, building, road construction, and mining activities, filed a reference application under Section 55(3) of the CG VAT Act, 2005. The applicant's registration certificate indicated mining activities, specifically extraction of boulders and conversion into 'Gitti' for their contract business. The first Assessing Authority disallowed input tax rebate for components, deeming them not capital goods as per a notification. The Appellate Authority held that the business was work contract and input tax rebate was only allowable on deemed sales transferred to a contractee, which was absent. The Commercial Tax Tribunal dismissed the reference, observing the applicant was not registered as a manufacturer or engaged in mining, and the claim was not for capital goods. The Tribunal further noted the applicant did not file statements with the Mining Department or pay royalty, which the applicant argues are irrelevant to claiming input tax rebate under Section 13 of the Act.

Held

The High Court held that the refusal for the reference by the Tribunal was not justified. Regarding Issue 1, the Court found that the Tribunal's reliance on the applicant not filing statements with the Mines Department and not paying royalty was irrelevant to the provisions of Section 13 of the Chhattisgarh Value Added Tax Act, 2005, for claiming input tax rebate. This indicated the impugned order was based on irrelevant material and ignored relevant evidence. Concerning Issue 2, the Court implicitly agreed with the applicant that the construction of roads handed over to the State would constitute a deemed sale of materials, and the denial of input tax rebate on this basis was incorrect. The Court directed the Tribunal to state the case and refer it for adjudication on the framed questions of law. The ratio decidendi is that for claiming input tax rebate under Section 13 of the CG VAT Act, 2005, the focus should be on the nature of the transaction as a deemed sale and the relevant statutory provisions, not on collateral requirements like filing statements with mining departments or paying royalty, unless explicitly mandated by the Act for such claims.

Key Issues

1. Whether, in the facts and circumstances, the impugned order is perverse, based on irrelevant material and ignoring relevant evidence concerning Section 13 of the Chhattisgarh Value Added Tax Act, 2005, for the determination of the impugned issues? 2. Whether, on the facts and in the circumstances, the Tribunal was correct in confirming the denial of input-tax rebate of Rs. 43,28,358/- by holding that the applicant was not registered as a manufacturer, not engaged in mining work, and that there was no transfer or deemed sale, thus disentitling them to input tax rebate? Petitioner's Arguments: The applicant contended that their mining activities, involving boulder extraction and conversion to 'Gitti' for road construction handed over to the State, constitute a deemed sale of goods for which registration exists, and it cannot be solely confined to 'work contract' nomenclature. They argued that the Tribunal's observation regarding the non-filing of statements with the Mines Department and non-payment of royalty was irrelevant to claiming input tax rebate under Section 13 of the Act, and that the construction of roads involved a deemed sale of materials used. Revenue's Arguments: The judgment does not record specific arguments made by the revenue or state.