Case Law Details
PCM Cement Concrete Pvt Ltd Vs Union of India (Patna High Court)
Patna High Court held that as the transaction is purely an inter-state sale of goods and is not a works contract nor a sale of goods exigible to tax within the State of Bihar, the illegal VAT deduction made by the Railways from the bills of the contractors needs to be refunded back.
Facts- The writ petition is filed seeking a direction to the Respondents 2, 3, and 6 for refund of an amount of Rs. 38,22,897. It is the petitioner’s contention that the said amounts were illegally deducted and recovered from the bills of the petitioner as advance Value Added Tax purportedly under the provisions of Section 40 and 41 of the Bihar Value Added Tax Act, 2005 (VAT Act).
The petitioner argues that the VAT Act has absolutely no applicability since the manufacture and supply of the goods by the petitioner to the Railways was an inter-state sale; which is not exigible to sales tax within the State of Bihar either as a sale of goods or as a works contract.
Conclusion- In the present case, the contract is one for the manufacture and transportation of pre-stressed concrete slabs and RCC Ballast Retainers of precise and particular specifications. There is no works contract involved and it is only a sale pure and simple of goods manufactured by the petitioner, who has been awarded the contract which is only for manufacture and sale. The manufactured goods are loaded and stacked in a vehicle or railway wagon, by which it is transported to the site within the State of Bihar for accretion in the works of the Railways; which work or accretion is not the responsibility of the petitioner.
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