M/S Five Star Construction vs. The Commissioner Of Commercial Tax

Facts

The appellant, M/s Five Star Construction, is a civil contractor. Following an assessment under Section 21(5) of the C.G. Vat Act, 2005, the Assistant Commissioner ordered a refund of Rs. 8,12,158/-. The assessee appealed to the Deputy Commissioner, who enhanced the relief to Rs. 11,75,209/-, resulting in a total refund of Rs. 19,87,367/-. Subsequently, an application under Section 55(1) of the C.G. Vat Act, 2005, was filed. The Tribunal dismissed the application for reference by an order dated 04.09.2021, and a prior dismissal order dated 05.04.2020 also existed. The appellant contended that the Tribunal's orders were cryptic and non-speaking.

Held

The High Court held that the refusal to make a reference by the Tribunal was not justified. The Court found the orders of dismissal to be cryptic and non-speaking, lacking any recorded reasons for their conclusions. The Court emphasized that when a party's right is based on a procedure established by a Supreme Court judgment, such as in M/s Gannon Dunkerley, the Tribunal is required to answer why it would not be applicable to the petitioner's case. The Court stated that the law laid down by the Supreme Court has a binding effect and its non-applicability must be evaluated, especially when specifically pleaded. Therefore, the Tribunal was directed to state the case and refer the following question of law: 'Whether order passed by the Hon'ble Tribunal without following the procedure prescribed by the Hon'ble Supreme Court in case of M/s Gannon Dunkerley Vs. State of Rajasthan (1993) 88 S.T.C. 204 is bad in law?'

Key Issues

1. Whether the Tribunal's order dismissing the application for reference, without providing reasons, is bad in law, particularly when the appellant claimed deductions based on the procedure laid down by the Supreme Court in M/s Gannon Dunkerley Vs. State of Rajasthan, and the Tribunal failed to address the maintainability of the reference and the applicability of the Supreme Court's ruling? (Section 55(1) of C.G. Vat Act, 2005, and the principle of law laid down by the Supreme Court in M/s Gannon Dunkerley). Contentions: Petitioner/Appellant: The entire issue is covered by the procedure prescribed in M/s Gannon Dunkerley Vs. State of Rajasthan, entitling the assessee to deductions. The Additional Commissioner ought not to have exercised jurisdiction under Section 49(3) of the C.G. Vat Act, 2005, as there was no error of law or prejudice to revenue. The Tribunal failed to answer the issue of maintainability and dismissed the reference application with a non-speaking order. The law laid down by the Supreme Court has a binding effect and should have been applied or its non-applicability explained. Respondent/State: Not recorded.