HIGH COURT OF JUDICATURE AT ALLAHABAD
M/S Ircon International Limited Thru’ Manager (Finance) (vs.) The Commissioner, Trade Tax U.P. Lucknow
This is an assessee’s revision for the assessment year 2003-04. The revisionist imported building and construction material under the terms of contract dated 8th February, 2001 entered into between two parties i.e. the applicant and the National Highway Authority of India . The Tribunal has not believed the contention of the assessee that the cement which was brought in within the State for the purpose of use in the works contract. The questions of law no.2, 3 & 5 have been referred, which are hereunder :-
“(2) Whether since the source of supply of material in the name of supplier and its place having been identified and approved by NHAI in accordance with the terms and conditions of the contract, hence the movement of the goods so approved from outside the State of U.P. directly to the site are covered by the principles of law laid down in the case of Santosh & Company (supra), the I.T.C. Classic Finance and Services (supra) and the Tribunal was not justified in not excluding the value of the said goods ?
(3) Whether the Trade Tax Tribunal has committed an error of law in holding that the cement and other goods which were purchased from outside the State of U.P. and were bought directly to the site for the execution of the Works contract does not bear any mark if identification, even though admittedly, on all the documents relating to the said goods, the consignee was IRCON A/c NHAI with the address of the site, hence in view of the law laid down by this Hon’ble Court in the case of Santosh & Company, New Delhi v. C.T.T. (1999 UPTC p. 823) and Commissioner of Trade Tax v. Indian Railway Constructions Company (2005 UPTC p.984), the value of such goods are liable to be excluded from the gross-turnover ?
(5) Whether the Trade Tax Tribunal was justified in not considering the various documents which are already on record ?”
I have heard learned Counsels on both side and have persed the material on record. The material on record clearly reflects that it was a prior contract under which the applicant was bringing construction material within the State of U.P. including cement. The Tribunal has recorded that cement was brought in within the State of U.P.
The Tribunal has simply recorded a finding that the cement was brought into the State of U.P. other than that no finding has been recorded by the Tribunal that the cement was not used in the works contract or that it was misused by the applicant.
It is also apparent from the record that the applicant has no other business except for road construction in the State of U.P.
In view of the admitted position of the case, there is no dispute that cement and other goods were brought in for the purpose of use in works contract, which were being executed in pursuance of a prior agreement. In the absence of any clear finding that there was misuse or some other use, the adverse inference drawn by the Tribunal is not justified specially in view of the decisions of this Court in the case of Santosh & Company v. C.T.T. reported in 1999 NTN (15) page 604 and the decision of this Court in the case of C.T.T. vs. Advance Spectra Tec. (P) Ltd. reported in 2010 NTN (Vol.43) 231 and in view of the decision of the Apex Court in the case of Gannon Dunkerley & Co. and others Vs. State of Rajasthan reported in 1993 UPTC page 416. The questions of law referred to are therefore, answered in favour of the assessee and against the department.
(3) Whether the Trade Tax Tribunal has committed an error of law in holding that the cement and other goods which were purchased from outside the State of U.P. and were bought directly to the site for the execution of the Works contract does not bear any mark if identification, even though admittedly, on all the documents relating to the said goods, the consignee was IRCON A/c NHAI with the address of the site, hence in view of the law laid down by this Hon’ble Court in the case of Santosh & Company, New Delhi v. C.T.T. (1999 UPTC p. 823) and Commissioner of Trade Tax v. Indian Railway Constructions Company (2005 UPTC p.984), the value of such goods are liable to be excluded from the gross-turnover ?
(5) Whether the Trade Tax Tribunal was justified in not considering the various documents which are already on record ?”
I have heard learned Counsels on both side and have persed the material on record. The material on record clearly reflects that it was a prior contract under which the applicant was bringing construction material within the State of U.P. including cement. The Tribunal has recorded that cement was brought in within the State of U.P.
The Tribunal has simply recorded a finding that the cement was brought into the State of U.P. other than that no finding has been recorded by the Tribunal that the cement was not used in the works contract or that it was misused by the applicant.
It is also apparent from the record that the applicant has no other business except for road construction in the State of U.P.
In view of the admitted position of the case, there is no dispute that cement and other goods were brought in for the purpose of use in works contract, which were being executed in pursuance of a prior agreement. In the absence of any clear finding that there was misuse or some other use, the adverse inference drawn by the Tribunal is not justified specially in view of the decisions of this Court in the case of Santosh & Company v. C.T.T. reported in 1999 NTN (15) page 604 and the decision of this Court in the case of C.T.T. vs. Advance Spectra Tec. (P) Ltd. reported in 2010 NTN (Vol.43) 231 and in view of the decision of the Apex Court in the case of Gannon Dunkerley & Co. and others Vs. State of Rajasthan reported in 1993 UPTC page 416. The questions of law referred to are therefore, answered in favour of the assessee and against the department.