(Tax Case No.196/2024 and nine other connected cases) 2025:CGHC:19844-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 196 of 2024 M/s Simplex Infrastructure Ltd., Bilaspur (C.G.), Tin Number 22124203993 --- Applicant versus Commissioner of Commercial Tax, Raipur (C.G.) --- Non-applicant TAXC No. 192 of 2024 M/s Simplex Infrastructure Ltd., Archana Vihar, Bilaspur, Chhattisgarh --- Applicant Versus Commissioner of Commercial Tax, Raipur, District Raipur, Chhattisgarh --- Non-applicant TAXC No. 193 of 2024 M/s Simplex Infractuture Ltd., Bilaspur, Chhattisgarh, Tin Number 22124203993 --- Applicant Versus Commissioner of Commercial Tax, Raipur --- Non-applicant TAXC No. 194 of 2024 M/s Simplex Infrastructure Limited, Archana Vihar, Bilaspur. --- Applicant Versus Commissioner of Commercial Tax, Raipur. --- Non-applicant SISTA SOMAYAJULU Digitally signed by SISTA SOMAYAJULU Date: 2025.05.05 10:57:01 +0530 (Tax Case No.196/2024 and nine other connected cases) TAXC No. 195 of 2024 M/s Simplex Infrastructure Ltd., Archana Vihar, Bilaspur --- Applicant Versus Commissioner of Commercial Tax, Raipur --- Non-applicant TAXC No. 197 of 2024 M/s Simplex Infrastructure Ltd., Bilaspur (C.G.), Tin Number - 22124203993 --- Applicant Versus Commissioner of Commercial Tax, Raipur (C.G.) --- Non-applicant TAXC No. 198 of 2024 M/s Simplex Infrastructure Ltd., Bilaspur, Chhattisgarh, Tin Number 22124203993 --- Applicant Versus Commissioner of Commercial Tax, Raipur, Chhattisgarh --- Non-applicant TAXC No. 199 of 2024 M/s Simplex Infrastructure Ltd, Bilaspur, Chhattisgarh, Tin Number 22124203993 --- Applicant Versus Commissioner of Commercial Tax, Raipur --- Non-applicant TAXC No. 200 of 2024 M/s Simplex Infrastructure Ltd., Bilaspur, Chhattisgarh. (Tin Number 22124203993) --- Applicant (Tax Case No.196/2024 and nine other connected cases) Versus Commissioner of Commercial Tax, Raipur, Chhattisgarh. --- Non-applicant TAXC No. 201 of 2024 M/s Simplex Infrastructure Ltd., Bilaspur, C.G. Tin Number 22124203993 --- Applicant Versus Commissioner of Commercial Tax, Raipur. --- Non-applicant For Applicant : Mr. Hari Agrawal, 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 (01/05/2025) Sanjay K. Agrawal, J. 1. Since the question(s) of law referred by the Tribunal in all tax cases are one and same, they have been clubbed together, heard together and are being disposed of by this common order. 2. The Chhattisgarh Commercial Tax Tribunal, Raipur in exercise of power conferred under Section 55(1) of the Chhattisgarh Value Added Tax Act, 2005 (for short, ‘the Act’) has referred the following two substantial questions of law for determination of this Court, which came up for consideration before this Court in Tax Case Nos.194/2024, 195/2024, 196/2024, 197/2024, 199/2024 & 200/2024: - “1. Whether under the facts and circumstance of the case the Hon’ble Tribunal had erred in law by holding that the assessment (Tax Case No.196/2024 and nine other connected cases) has been done on the basis of the guiding principle of the Gannon Daunkerley judgement? 2. Whether under the facts and circumstance of the case the Hon’ble Tribunal had erred by reaching to perverse finding that assessing authority have properly levied tax and allowed the deduction as per the law?” 3. Similarly, the Tribunal has referred the following sole substantial question of law relating to deduction of Entry Tax for determination of this Court, which came up for consideration before this Court in Tax Case Nos.192/2024, 193/2024, 198/2024 & 201/2024: - “Whether under the facts and circumstance of the case the Hon’ble Tribunal had erred by reaching to perverse finding that assessing authority have properly levied tax and allowed the deduction on the ET paid on purchase of goods as per the law?” 4. For the sake of convenience, Tax Case No.196/2024 are taken as lead case. 5. The assessment order was passed by the Assessing Officer on 20-12-2016 upholding the demand of 4,13,55,339/- for the assessment year 2009-10 ₹ against which appeal was preferred by the applicant / assessee, which was dismissed by the appellate authority on 24-9-2018 holding that the accounts book does not show closing work in progress, opening work in progress and the entry of purchase is made for lesser amount, therefore, the records are not reliable and upheld the order passed by the Assessing Officer. It was categorically held by the appellate authority that the judgment rendered by the Supreme Court in the matter of M/s Gannon Dunkerley and Co. and others v. State of Rajasthan and others1 cannot be applied, as the documents were not made available as per the 1 (1993) 1 SCC 364 (Tax Case No.196/2024 and nine other connected cases) said judgment for the authority to follow the principles of law laid down therein. The Commercial Tax Tribunal also dismissed the further appeal preferred by the assessee / applicant herein on 9-9-2022 making observation regarding non-supply of proper documents. Ultimately, on 5- 9-2022, the Tribunal under Section 55(1) of the Act has referred the substantial questions of law which have been quoted in the opening paragraph of this order. 6. However, the Supreme Court in M/s Gannon Dunkerley and Co. (supra) has laid down the guiding principles in sub-paragraphs (5), (6) and (7) of paragraph 51 of the report, which state as under: - “51. The aforesaid discussion leads to the following conclusions: (1) to (4) xxx xxx xxx (5) In order to determine the value of the goods which are involved in the execution of a works contract for the purpose of levying the tax referred to in Article 366(29-A)(b), it is permissible to take the value of the works contract as the basis and the value of the goods involved in the execution of the works contract can be arrived at by deducting expenses incurred by the contractor for providing labour and other services from the value of the works contract. (6) The charges for labour and services which are required to be deducted from the value of the works contract would cover (i) labour charges for execution of the works, (ii) amount paid to a sub-contractor for labour and services; (iii) charges for obtaining on hire or otherwise machinery and tools used for execution of the works contract; (iv) charges for planning, designing and architect's fees; and (v) cost of consumables used in execution of the works contract; (vi) cost of establishment of the contractor to the extent it is relatable to supply of labour and services; (vii) other similar expenses relatable to supply of labour and services; and (viii) profit earned by the contractor to the extent it is relatable to supply of labour and services. (Tax Case No.196/2024 and nine other connected cases) (7) To deal with cases where the contractor does not maintain proper accounts or the account books produced by him are not found worthy of credence by the assessing authority the legislature may prescribe a formula for deduction of cost of labour and services on the basis of a percentage of the value of the works contract but while doing so it has to be ensured that the amount deductible under such formula does not differ appreciably from the expenses for labour and services that would be incurred in normal circumstances in respect of that particular type of works contract. It would be permissible for the legislature to prescribe varying scales for deduction on account of cost of labour and services for various types of works contract. (8) xxx xxx xxx” 7. At this stage, it would be appropriate to notice the finding recorded by the learned Tribunal while dismissing the appeal, which states as under: - “3. It appears from records that account books are not showing closing work in progress, opening work in progress and entry of purchase is made for lessor amount hence the records are not dependable. The original assessment order is not under challenge. The first appellate authority after evaluating the entire documents recoded finding that assessment is proper and this tribunal has no reason to take a contrary view.” 8. However, a careful perusal of the order passed by the learned Tribunal in appeal, would reveal that the Tribunal has not held that the assessment has been done following the guiding principles laid down in M/s Gannon Dunkerley and Co. (supra). In absence of any such finding, the questions referred by the learned Tribunal do not arise for determination by this Court. As such, the Tribunal did not hold that the assessment has been done following the guiding principles laid down in M/s Gannon Dunkerley and Co. (supra). 9. At this stage, it would be apposite to notice Section 55(4) of the Act, which states as under: - (Tax Case No.196/2024 and nine other connected cases) “Section 55 : Statement of case to High Court (1) to (3) xxx xxx xxx (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 Tribunal to make such additions or alterations as the Court may direct in that behalf.” 10. A careful perusal of sub-section (4) of Section 55 of the Act would show that 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 Tribunal to make such additions or alterations as the Court may direct in that behalf. 11. Now, though at the cost of repetition, it would be appropriate to notice the first substantial question of law referred by the Tribunal. which states as under: - “1. Whether under the facts and circumstance of the case the Hon’ble Tribunal had erred in law by holding that the assessment has been done on the basis of the guiding principle of the Gannon Daunkerley judgement? 12. Thus, after going through the record, substantial questions of law and the order of the Tribunal, we are satisfied that the Tribunal did not hold that the assessment has been done following the guiding principles laid down in M/s Gannon Dunkerley and Co. (supra). 13. In that view of the matter, in exercise of the power under Section 55(4) of the Act, we direct the Tribunal to alter the substantial question of law suitably and frame the question afresh for determination of this Court. 14. At this stage, Mr. Hari Agrawal, learned counsel appearing for the applicant, would submit that the substantial question for determination of (Tax Case No.196/2024 and nine other connected cases) this Court would be “whether under the facts and circumstances of the case, the Tribunal was justified in upholding the assessment made without following the guiding principles laid down by the Supreme Court in M/s Gannon Dunkerley and Co. (supra)”. 15. Accordingly, the matters are referred to the Tribunal to suitably alter the question of law for determination of this Court in the following manner and refer the same to this Court: - “Whether under the facts and circumstances of the case, the Tribunal was justified in upholding the assessment made without following the guiding principles laid down by the Supreme Court in M/s Gannon Dunkerley and Co. (supra) and consequently erred in determining the Value Added Tax and the Entry Tax?” 16.Accordingly, all the applications / office references stand disposed of. Sd/- Sd/- (Sanjay K. Agrawal) (Deepak Kumar Tiwari) JUDGE JUDGE Soma