Chattisgarh High Court
M/S Jabalpur Transmission Company Ltd vs Commissioner Of Commercial Tax 56 ... on 7 January, 2019
Bench: Ajay Kumar Tripathi, Parth Prateem Sahu
1
NAFR
HIGH COURT OF CHHATTISGARH, BILASPUR
Order Reserved on: 26/11/2018
Order Delivered on : 07/01/2019
Tax Case No. 122 of 2018
M/s. Jabalpur Transmission Company Ltd. Opp. Sahara Nursing
Home, Ring Road No. 2, Narmada Nagar, Bilaspur, Chhattisgarh.
---- Applicant
Versus
Commissioner of Commercial Tax, Raipur, District Raipur,
Chhattisgarh.
---- Respondent
For Applicant : Shri N. Venkat Raman, Senior Advocate with Shri Neelabh Dubey and Shri Varun Chablani, Advocates.
For Respondent: Shri UNS Deo, Government Advocate.
Hon'ble Shri Ajay Kumar Tripathi, Chief Justice Hon'ble Shri Parth Prateem Sahu, Judge C.A.V. Order Per Ajay Kumar Tripathi, Chief Justice
1. This tax case has been filed against the order dated 27.06.2018 passed by the Commercial Tax Tribunal, Raipur (for short 'the Tribunal) refusing to refer the substantial questions of law in Reference Case No. R/32/59/2017 arising out of the appeal against the Order No. A/59/11/2016 in relation to entry tax passed on 03.03.2017 by the learned Commercial Tax Tribunal for the assessment period 01.04.2012 to 31.03.2013.
2. The Applicant-Company is engaged in business of providing electricity transmission services to some of the power producing companies 2 in the State. The electricity transmission services are provided by the Applicant in terms of the long term "Transmission Service Agreement"
entered with various companies, details of which have been indicated in the tax case.
3. The Applicant has obtained transmission licence under Section 14 of the Electricity Act, 2003 from the Central Electricity Regulatory Commission. Extracts of the licence have been annexed with the tax case.
4. It is the case of the Applicant that prior to commencement of its business activities of transmitting electricity, it has to set up necessary infrastructure like erection of transmission poles and towers, install parts like conductors, insulators and transformers as well as lay down the transmission lines to facilitate transmission of electricity. The creation of such infrastructure is undertaken by the Applicant at its own cost and expense. The ownership of such infrastructure remains with the Applicant-Company and it is only after necessary infrastructure is put in place that the business of transmission of electricity begins from the power producing companies to the place of supply.
5. Prior to commercial operations, the Applicant purchased various materials for establishment of infrastructure of setting up of transmission lines. Purchases were made on inter-State basis and brought into the local area of the State of Chhattisgarh during the period of assessment i.e. 2012- 2013. Appropriate declarations have been made and even Form-C had been issued for the inter-State supplies under the Central Sales Tax Act.
6. It is the assertion of the Applicant that prior to 14.09.2015, it did not pay any entry tax on the purchases for establishing infrastructure under the bona fide belief that in terms of Section 3(1) of the Chhattisgarh Entry Tax Act, 1976, since the entry tax was required to be levied on the entry of goods 3 in the local area provided the same was in the course of business of dealer of goods. Since the business of the Applicant was commenced only after the transmission lines were fully erected and commissioned and thereafter connected to grids on 14.09.2015, therefore, the purchases made prior to the said date were not liable for payment of entry tax.
7. The Assessing Authority, however, made assessment creating liability against which the appeal was preferred before the Additional Commissioner (Appeals), Commercial Tax, who too dismissed the appeal of the Applicant. The matter thereafter travelled to the Tribunal where an application for reference under Section 55 (1) of the VAT Act, 2005 was filed but the same has been dismissed on the ground that no substantial question of law arises.
8. Having heard learned counsel for the parties, we are prima facie satisfied that the order dated 27.06.2018 rejecting to refer the questions of law raised in the reference application filed before the Tribunal suffers from irrationality and illegality. The questions of law raised before the Tribunal ought to have been referred for consideration by the High Court as they are not questions of facts as held by the Tribunal.
9. The impugned order dated 27.06.2018 passed by the Commercial Tax Tribunal, Raipur is set aside. The Tax Case is allowed. The Tribunal is directed to state the case and refer the same for consideration to the High Court.
Sd/- Sd/-
(Ajay Kumar Tripathi) (Parth Prateem Sahu)
CHIEF JUSTICE JUDGE
Subbu