# The Commissioner, Commercial Tax, U.P. Lko. Revisionist v. S/s Sanya Construction & Developers Pvt. Ltd., Kanpur

- **Citation:** (2023) 12 ILRA 301
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-11-23
- **Case number:** Sale/Trade Tax Revision No. 94 of 2023
- **Bench:** Shekhar B. Saraf
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/the-commissioner-commercial-tax-u-p-lko-revisionist-v-s-s-sanya-construction-49566
- **Pages:** 4

## Headnote

Civil Law - Value Added Tax Act, 2008 -
U.P. Value Added Tax Rules, 2008, Rule
9(1)(e) - Issue: Whether the Commercial
Tax Tribunal was justified in holding that
cement and other goods imported from
outside U.P. for execution of pre-existing
works contracts, the turnover is liable to
be reduced as per Rule 9 of the Value
Added Tax Rules ? Facts: Department
contended that the assessee had not
established import of goods and execution
of specific works contract, and thus
benefit under Rule 9(1)(e) could not be
claimed, whereas the assessee contended
that when the goods are coming from
outside the State and the Tribunal comes
to a specific finding that the goods were
brought in to the State for the purpose of
carrying out pre-existing works contract,
the benefit of deduction contemplated
302 INDIAN LAW REPORTS ALLAHABAD SERIES
under Section 9(1)(e) of the Rules would
be available to the assessee. Held: Goods
were imported from outside the State of
U.P. and were used in one project in the
State of U.P., such being the case, Rule 9
(1)(e) of the Rules would apply. General
rule of law in taxing statutes is that in
case of any doubt the benefit should be
given to the assessee. However, in case of
exemption and deduction to be given, a
stricter
approach
may
be
followed.
Question of law answered in favour of the
assessee and against the Department.
Revision
dismissed,
Tribunal's
order
upheld,
assessee
entitled
to
claimed
deduction (paras 6, 7, 8)

Dismissed. (E-5)

## Text

12 All. The Commissioner, Commercial Tax, U.P. Lko. Vs. S/s Sanya Construction & Developers
 Pvt. Ltd., Kanpur
301
(Gangster Act), Court No.13, Lakhimpur
Kheri are illegal and the same are liable to
be quashed.

21. In view of above facts and
circumstances of the case, the impugned
orders passed by the courts below cannot
be said to be passed in correct perspectives
as they are not sustainable in the eye of law
and require interference by this Court, the
prosecution has failed to establish that the
provisions of Sections 2 and 3 of the
Gangster Act are attracted in the case of
appellant, and further the appellant's
property is also not attached in accordance
with law, as the prosecution has failed to
establish that the property in question
acquired and owned by the appellant's
husband has been earned from the income
indulging in anti social activities. The
inquiry under Section 16 was not done in
accordance with the Act, the provisions of
Sections 14, 15 & 17 were also not
followed in accordance with the Act, thus
the entire proceeding initiated in pursuance
thereof is vitiated.

22. Accordingly, the present appeal is
allowed. The impugned order dated order
dated 01.04.2023 passed under Section 16
of the Gangster Act in Misc. Criminal
Case No.186 of 2022 (Nazima Vs. State
of U.P.) by learned Additional Sessions
Judge / Special Judge (Gangster Act),
Court No.13, Lakhimpur Kheri and order
dated 06.04.2022 passed by District
Magistrate,
Lakhimpur
Kheri
passed
under Section 14 of the Gangster Act in
Misc. Criminal Case No.586 of 2022
(Anwar Vs. State of U.P.), Case Crime
No.85 of 2021, under Section 2/3 of Uttar
Pradesh
Gangster
and
Anti
Social
(Prevention of Activities) Act, 1986,
Police Station Mailani, District Kheri are
hereby quashed.

The District Magistrate, Lakhimpur
Kheri is directed to release all the property
of the appellant attached vide order dated
06.04.2022
in
favour
of
appellant,
forthwith.

23. No order as to costs.
----------
(2023) 12 ILRA 301
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.11.2023

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.

Sale/Trade Tax Revision No. 94 of 2023

The Commissioner, Commercial Tax, U.P.
Lko. ...Revisionist
Versus
S/s Sanya Construction & Developers Pvt.
Ltd., Kanpur ...Respondent

Counsel for the Revisionist:
Sri Bipin Kumar Pandey, S.C.

Counsel for the Respondent:
Sri Shubham Agrawal

Civil Law - Value Added Tax Act, 2008 -
U.P. Value Added Tax Rules, 2008, Rule
9(1)(e) - Issue: Whether the Commercial
Tax Tribunal was justified in holding that
cement and other goods imported from
outside U.P. for execution of pre-existing
works contracts, the turnover is liable to
be reduced as per Rule 9 of the Value
Added Tax Rules ? Facts: Department
contended that the assessee had not
established import of goods and execution
of specific works contract, and thus
benefit under Rule 9(1)(e) could not be
claimed, whereas the assessee contended
that when the goods are coming from
outside the State and the Tribunal comes
to a specific finding that the goods were
brought in to the State for the purpose of
carrying out pre-existing works contract,
the benefit of deduction contemplated
302 INDIAN LAW REPORTS ALLAHABAD SERIES
under Section 9(1)(e) of the Rules would
be available to the assessee. Held: Goods
were imported from outside the State of
U.P. and were used in one project in the
State of U.P., such being the case, Rule 9
(1)(e) of the Rules would apply. General
rule of law in taxing statutes is that in
case of any doubt the benefit should be
given to the assessee. However, in case of
exemption and deduction to be given, a
stricter
approach
may
be
followed.
Question of law answered in favour of the
assessee and against the Department.
Revision
dismissed,
Tribunal's
order
upheld,
assessee
entitled
to
claimed
deduction (paras 6, 7, 8)

Dismissed. (E-5)

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. Heard learned Standing Counsel for
the revisionist and Sri Shubham Agrawal,
learned counsel for the opposite party.

2. This is an application for revision
under Section 58 of the U.P. Value Added
Tax Act, 2008 in relation to Assessment
Year 2012-13, wherein the following
questions of law have been framed:

"1.
Whether
on
the
facts
and
circumstances of the case the Commercial
Tax Tribunal was legally justified in
holding that the cement imported from
outside the State of U.P., the turnover is
liable to be reduced as per Rule 9 of the
Value Added Tax Rules?

2.
Whether
on
the
facts
and
circumstances of the case the 1st Appellate
Authority was legally justified in reducing
the expenses from 21% to 10% and
Tribunal
has
committed
illegality
in
confirming the same?"

3. Learned counsel for the revisionist
has fairly submitted that he has no grounds
to argue with regard to the second question
of law and therefore, same is not being
pressed by him.

4. With regard to the first question of
law,
learned
counsel
on
behalf
of
revisionist submitted that factum of import
of goods and specific execution of work
contract has not been established by the
assessee and, therefore, the benefit under
Rule 9 Sub Rule (1)(e) of the U.P. Value
Added Tax Rules, 2008, (hereinafter
referred as 'the Rules') would not be
applicable to the assessee. It is further
submitted that the judgment passed by the
Coordinate Bench in M/s Comfort Systems
Vs. Commissioner Commercial Tax, U.P.,
reported in 2019 U.P.T.C. (Vol. 101) 242 is
not applicable to the present case as in that
case there was no dispute that the goods
have been imported from outside the State
of U.P. for utilization in the works contract.

5. Learned counsel on behalf of
respondent
assessee
has
relied
upon
paragraph nos. 11, 13, 14, 19, 20, 21 and 23
to buttress his argument that the ratio of the
case is that when the goods are coming
from outside the State and the Tribunal
comes to a specific finding that the goods
were brought in to the State for the purpose
of carrying out pre-existing works contract,
the benefit of deduction contemplated
under Section 9(1)(e) of the Rules would be
available to the assessee.

6. Upon perusal of the order of
Tribunal it is patently clear that the goods
were imported from outside the State of
U.P. and were used in one project in the
State of U.P. There does not appear to be
any perversity in the finding of the Tribunal
with regard to the above factum. In my
view, such being the case, Rule 9 (1)(e) of
the Rules would definitely apply and the
12 All. The Commissioner, Commercial Tax, U.P. Lko. Vs. S/s Sanya Construction & Developers
 Pvt. Ltd., Kanpur
303
petitioner would be entitled to the benefit
thereunder. One may further look into the
judgment of the Coordinate Bench for
further clarification. Relevant paragraphs
are delineated below:

"11.... Looking at the language of Rule
9(1)(e) of the Rules, the inter-state sale of
the goods (giving rise to the claim of
exemption) must precede their transfer
under the works contract. Second, transfer
of the property in those goods must result
or spring from the transaction of inter-state
sale of those goods. The findings recorded
by the Tribunal are to the effect, first a
works contract was executed. Thereafter,
the assessee caused the movement of goods
from outside the state of U.P. for purpose of
execution of the works contract. Third, as a
fact, the assessee applied those goods to
the
works
contract
executed
by
it.
Consequently, it has to be inferred that the
property in those goods stood transferred to
the contractee parties.

.

.

.
13. Once the Tribunal had found that the
movement of goods from outside the state
had been caused by the pre-existing works
contract and that the goods thus imported
had been applied solely for execution of
those works contracts and there was no
allegation or finding that such goods had
been imported by the assessee independent
of
the
works
contract,
the
enquiry
necessary to decide the dispute should end
there. According to the facts found by the
Tribunal, the deemed sale was one
performed in the course of inter-state sale
as the movement of the goods had been
occasioned from outside the state, only for
the purpose of execution of the works
contracts, by the assessee.

14. It would have been a completely
different case if the assessee had been
found to hold in stock any goods that may
have been imported from before and may
have been applied to the works contract
subsequently. However, neither there is any
room for presumption nor such speculation
is permissible in the clear facts of the
present case.

.

.

.

19.
That
being
the
governing
principle, the language of Rule 9(1)(e) of
the Rules relied upon by the learned
Standing Counsel has to be examined in
that light. In absence of any legislative
competence on part of the State legislature
to impose tax on deemed sale in the course
of inter-state trade, the phrase "as a result
of sale in the course of inter-state trade or
commerce" appearing in Rule 9(1)(e) of the
Rules cannot be restricted or confined to
inter-state
sale
but
as
referring
to
transaction of "a sale or purchase of
goods" falling under section 3 of the
Central Sales Tax Act, 1956.

.

.

.

23. The question of law framed above
is answered thus:

Since in the present case, the Tribunal
recorded a specific finding that there preexisted
works
contracts
between
the
assessee and the contractees and further
the assessee had purchased the goods from
outside the State of U.P., only to execute
those pre-existing works contracts, in
absence of any further finding that such
goods had been sourced from before or that
they were not applied to the works contract
or that there arose two sales, the assessee
was clearly entitled to the benefit of
304 INDIAN LAW REPORTS ALLAHABAD SERIES
deduction contemplated under Rule 9(1)(e)
of the Rules."

7. The general rule of law in
taxing statutes is that in case of any
doubt the benefit should be given to the
assessee.
However,
in
case
of
exemption and deduction to be given, a
stricter approach may be followed, as
per catena of judgments of the Supreme
Court, to examine whether the assessee
is eligible for such benefit. In the
present case, there is no factual dispute
of goods having been imported from
outside the State of U.P. and, therefore,
the assessee clearly qualifies for the
said benefit. In light of the same, the
question of law no. 1 is answered in
favour of the assessee and against the
Department.

8. In light of the observations made
above,
the
revision
application
is
dismissed.
----------
(2023) 12 ILRA 304
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 26.10.2023

BEFORE

THE HON'BLE SAUMITRA DAYAL SINGH, J.
THE HON'BLE SURENDRA SINGH-I, J.

Writ Tax No. 454 of 2020

M/s Harbir Singh Contractor & Anr.
 ...Petitioners
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Sri Shubham Agrawal, Ms. Sanyukta Singh

Counsel for the Respondents:
A.S.G.I., Sri Ashok Singh, Sri Krishna Agarawal,
Sri Ramesh Chandra Shukla
A. Taxation Law--The Constitution of
India, 1950-Article 226 - The Central
Goods
and
Services
Tax
Act,
2017Sections 22, 25(1) & 139---Writ petition
seeking a direction upon the respondent
revenue authorities to treat the registration
granted (subsequently), to the petitioner on
23.10.2017 for the activity "Manpower Supply
Services", under the C.G.S.T Act, 2017, with
retrospective effect from 1.7.2017 i.e the date
from when the original registration was granted
to the petitioner no.1--- Petitioner no.1 entitled
to the relief such that the second registration
granted to him be treated to be effective from
the date 1.7.2017, on a deemed basis. In
absence of lack of bonafides and in face of the
established machine error, grant of that relief
has become imperative for non-negotiable
justice considerations. (Para 37)

B. The substantive relief of benefit of ITC
arising to the petitioner no.2 on the sales
performed by the petitioner no.1 from 1.7.2017
till 31.8.2017 would hinge on the further
conduct of petitioner no.1 regarding deposit of
tax on the due date while filing the return
relevant to the revised Tax Invoices that came
to be issued by the petitioner on 23.10.2017 i.e.
upon the fresh registration being granted. If the
due tax on the revised Tax Invoices had been
deposited along with the return for the month of
October 2017, the respondent including the
GSTN shall make appropriate arrangement to
allow for availment of the Input Tax Credit to
petitioner no.2 against such revised Tax
Invoices. If however there were delays or noncompliance to that extent, the relief being
claimed
by
petitioner
no.1
shall
stand
accordingly modified, consequent to that due
verification, the disclosure made in GSTR-1 of
petitioner no.1 for the month of October 2017
would be modified by GSTN to reflect on the
corresponding GSTR-2A, relevant to petitioner
no.2 for the period July to September 2017 and
all consequences to arise to the petitioners. To
that extent, the order passed by the Authority
for Advance Ruling may not stand in the way of
the petitioners.

Petition allowed. (E-15)

List of Cases cited: