M/S G.C.Jain vs. State Of Chhattisgarh

Held

The High Court held that the learned Single Judge was correct in declining to interfere with the re-assessment order by invoking powers under Article 226 of the Constitution. The Court found no grounds to interfere with the Single Judge's decision in the writ appeal. The primary reasoning was the availability of an alternative statutory remedy under Section 48 of the Chhattisgarh Value Added Sales Tax Act, 2005, which the appellant failed to pursue. Furthermore, the Court noted the appellant's delay of approximately 15 months in approaching the High Court after the re-assessment order was passed. The appeal was dismissed without prejudice to the appellant's right to pursue the statutory remedy in accordance with law. The issue regarding the absence of a machinery provision for segregating costs in works contracts was not decided on merits, as the petition was dismissed on the ground of alternative remedy and delay.

Facts

The appellant, M/s G.G. Jain, challenged a re-assessment order dated 16.08.2018 passed under the Chhattisgarh Value Added Sales Tax Act, 2005. The appellant argued that the Act lacked a mechanism to segregate the cost of labour and other elements from the total value of works contracts for taxation purposes, citing the Supreme Court ruling in M/s Gannon Dunkerley and Co. & Others vs. State of Rajasthan & Others. Instead of availing the statutory remedy of appeal, the appellant directly filed a writ petition before the High Court. The learned Single Judge dismissed the writ petition, holding that an alternative remedy was available and that the appellant had approached the court after an inordinate delay of approximately 15 months from the date of the re-assessment order.

Key Issues

1. Whether the Chhattisgarh Value Added Sales Tax Act, 2005, provides a machinery for calculating tax liability on sale of goods in the execution of works contracts, and if not, can an assessment or re-assessment be made? (Question of law turning on the interpretation of the Act of 2005). Petitioner/Appellant's Contention: The Act of 2005 lacks a machinery provision to segregate the cost of labour and other elements from the total figure in works contracts before subjecting it to tax. Therefore, no assessment or re-assessment can be made. Reliance is placed on M/s Gannon Dunkerley and Co. & Others vs. State of Rajasthan & Others. Revenue/State's Contention: Not recorded in the judgment. The judgment notes that the appellant did not choose to challenge the provision of law but indirectly sought a declaration. The State relied on the availability of an alternative statutory remedy under Section 48 of the Act of 2005.