M/s. Larsen & Toubro Limited, 4th Floor, Crystal Tower, G.E. Road, Telibandha, Raipur, Chhattisgarh v. Commissioner of Commercial Tax, Raipur, Chhattisgarh
Case Details
Page 1 of 7 (Tax Case No.46/2025) SISTA SOMAYAJULU Digitally signed by SISTA SOMAYAJULU Date: 2025.06.26 17:51:44 +0530 2025:CGHC:27598-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 46 of 2025 M/s. Larsen & Toubro Limited, 4th Floor, Crystal Tower, G.E. Road, Telibandha, Raipur, Chhattisgarh. ... Applicant versus Commissioner of Commercial Tax, Raipur, Chhattisgarh. ... Non-applicant For Applicant
Legal Reasoning
: Mr. Neelabh Dubey, Advocate. For Non-applicant : Mr. Rahul Tamaskar, Government Advocate. Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Deepak Kumar Tiwari, JJ. Order on Board (20/06/2025) Sanjay K. Agrawal, J. 1. The applicant herein has preferred an application under Section 55(2) of the Chhattisgarh Value Added Sales Tax Act, 2005 (for short, ‘the Act of 2005’) to require the Tribunal to make a reference calling question of law holding that the case involves question of law. Though the applicant has made application, but the same has been rejected on tenable grounds. 2. The applicant herein has proposed the following three questions of law to be called from the Tribunal for determination: - Page 2 of 7 (Tax Case No.46/2025) “a) Whether under the facts and circumstances of the case, the learned Tribunal is justified in upholding the order of the appellate authority as it failed to grant time to produce Form 3? b) Whether under the facts and circumstances of the case, the learned Tribunal is justified in not remanding the case for fresh assessment so as to allow further time to obtain Form 3 especially in light of the fact that the tax on same has already been paid by the sub-contractor and it should not have been included in the taxable turnover of the applicant Company? c) Whether the Tribunal has failed to appreciate that the issue is squarely covered by the judgment of the Hon’ble Supreme Court in the case of the applicant Company itself, State of Andhra Pradesh and others v. Larsen & Toubro Limited and others, (2008) 9 SCC 191, bound to stand by the promise given and the applicant could not have been made to suffer for non-action of the State non- applicant authorities?” 3. The aforesaid questions of law have been proposed on the following factual backdrop: - 4. The applicant herein is engaged in the execution of works contract. The work undertaken by the applicant, in the instant case, was sub-contracted to M/s. GMC Infrastructures and Construction and that was the contract for mixing and pumping of concrete mixer (included both supply of goods and service) where the material was supplied (free of cost) by the applicant to the sub-contractor which further prepared the concrete mixer in its mixing truck. 5. The case of the applicant is that on 22-7-2020, assessment was made for the year 2015-16 under Section 21(3) of the Act of 2005 and total deduction prayed for by the applicant was ₹ 71,69,26,446/- on the turnover of goods supplied in the course of execution of works contract claiming that tax has already been paid by the sub-contractor. However, Page 3 of 7 (Tax Case No.46/2025) on production of Form 3, the Assessing Officer allowed deduction of ₹ 57,04,56,916/-, but on the remaining amount of ₹ 14,64,69,530/-, the applicant could not produce Form 3 and therefore the Assessing Officer has allowed deduction of only ₹ 5,85,87,812/- towards cost of labour and other expenses for civil works. Thus, only for an amount of ₹ 8,78,81,718/-, Form 3 was not provided by the applicant and accordingly, it was added to the taxable sale value against which the applicant has preferred an appeal which was partly allowed to the extent of ₹ 8,21,119/-. In first round, the Tribunal has remitted the matter, however, the reference application under Section 55(1) of the Act of 2005 was rejected by order dated 25-6-2024 leading to filing of application under Section 55(1) which stands rejected by the impugned order against which this instant application has been preferred proposing the aforesaid questions of law. 7. Section 55 of the Act of 2005 states as under: - “55. (1) With in sixty days from the date of communication by the Board of any order to as dealer or to the commissioner under section 48 or section 49 or section 56 the dealer or the commissioner may, by application in writing accompanied, where the application is made by a dealer by a fee of one hundred rupees, require the Board to refer to High Court any question of law arising out of such order and where the Board decides to make a reference to the High Court, it shall draw up statement of the case and refer it accordingly. (2) If for reasons to be recorded in writing, the Board refuses to make a reference, the applicant may within sixty days from the date of communication of such refusal- (a) withdraw his application and if he does so, the fee paid shall be refunded, or Page 4 of 7 (Tax Case No.46/2025) (b) apply to the High Court to require the Board to make a reference. (3) If upon the receipt of an application under clause (b) of sub- section (2) the High Court is satisfied that the refusal was not justified, it may require the Board to state case and refer it, and on receipt of such requisition, the Board shall act accordingly. (4) If the High Court is satisfied that the case stated is not sufficient to enable it to determine the question of law raised, it may call upon the Board to make such additions of alterations as the Court may direct in that behalf. (5) The High Court upon the hearing of a reference under this section shall decide the question of law raised therein and shall deliver judgment thereon containing the grounds of decision and shall send to the Board a copy of the judgment under the seal of the Court and the signature of the Registrar, and the Board shall dispose of the case accordingly. (6) to (9) xxx xxx xxx” 6. A careful perusal of Section 55(1) of the Act of 2005 would show that power of the Board (in this case, the Tribunal) to make reference to the High Court must arise from the subject order. 7. Reference jurisdiction is consultative / advisory jurisdiction of the High Court which he renders on opinion being asked and it is purely advisory in nature. The High Court in the reference jurisdiction is to extend its advise in its jurisdiction which is advisory in nature and purely consultative in nature to enable the referring Tribunal to dispose of the matter, as the case may be, on the basis of opinion given by the High Court. The law in this regard is very well settled. 8. Under Section 55(1) of the Act of 2005, the Tribunal will make reference only when the question of law is involved and question of law for which authoritative pronouncement of this Court is required. The issue raised in Page 5 of 7 (Tax Case No.46/2025) this case is only factual and no question of law is involved in the present case. 9. Coming to the facts of the case, in the instant case, all the three questions raised by the applicant relate to non-submission of Form 3 by the applicant. As per Section 6(1)(b) of the Act of 2005, the burden of proving that tax has been paid by the sub-contractor on the turnover of goods supplied in the course of execution of the works contract was upon the contractor i.e. the applicant herein. Section 6(1)(b) of the Act of 2005 states as under: - “Section 6 : Joint and several liability of certain class of dealers (1) (b) If the contractor proves in the prescribed manner to the satisfaction of the commissioner that the tax has been paid by the sub-contractor on the turnover of the goods supplied in the course of execution of the works contract, the contractor shall not be liable to pay tax again on the turnover of such goods.” 10.The manner for discharging the burden of proof has been provided under Rule 7 of the Chhattisgarh Value Added Tax Rules, 2006 (for short, ‘the Rules of 2006’), sub-rule (1) of which provides as under: - “Rule 7 : Manner of proving payment of tax by the contractor and the principal or the Commission agent (1) A claim made by a contractor under clause (b) of sub-section (1) of section 6 shall be supported by a declaration in form 3 to be issued by the sub-contractor and shall be admitted in proof of such claim.” 11.Sub-rule (1) of Rule 7 of the Rules of 2006 clearly provides that the burden of proof of payment of tax on the turnover by the sub-contractor can be discharged by the contractor only by producing Form 3. Admittedly, the applicant has failed to produce Form 3 for 8 years and has Page 6 of 7 (Tax Case No.46/2025) failed to demonstrate any statutory provision or any judgment to demonstrate that the authorities were under an obligation to keep granting the applicant time sine die to produce Form 3. In absence of production of Form 3, the question of double taxation as observed in paragraph 19 of the judgment by the Supreme Court in the matter of State of Andhra Pradesh and others v. Larsen & Toubro Limited and others1 does not arise. Thus, in absence of submission of Form 3 by the applicant, payment of tax by the sub-contractor on the turnover of the goods supplied in the course of execution of the works contract, remains a disputed question of fact and there is no statutory duty imposed on the Department to grant time for producing Form 3, yet considering the facts leniently, Form 3 submitted till second appeal being continuation of original proceedings, were accepted. However, in absence of statutory duty imposed upon the Department, the applicant has no existing legal right that can be enforced that too after lapse of 8 years since the original proceedings. As such, no question of law as required under Section 55(2) of the Act of 2005 arises for adjudication by this Court. 12.The payment of tax by the sub-contractor being the disputed question of fact cannot be equated with the question of law, as such, the disputed question of fact cannot be the question of law falling within the meaning of Section 55(2) of the Act of 2005. 1 (2008) 9 SCC 191 Page 7 of 7 (Tax Case No.46/2025) 13.Consequently, no question of law is required to be called from the Tribunal. Accordingly, the instant application deserves to be and is hereby rejected. No order as to cost(s). Sd/- (Sanjay K. Agrawal) Judge Soma Sd/- (Deepak Kumar Tiwari) Judge