Ambey Mining Private Limited And Ors vs State Of Jharkhand And Ors

As the common question is involved in all these writ applications, they have been heard together and are being disposed of by this common order.

Heard learned counsels for the petitioners Companies and learned counsels for the respondent State.

The petitioners herein, are engaged in the work of removing of overburden, and coal transportation, within the mining premises of the different Coal

Companies carrying out the mining process, and are aggrieved by the show cause notices issued to them by the Commercial Taxes Authorities,

whereby, they have been noticed that though they purchased the High Speed Diesel at the rate of concessional rate of CST, on the basis of Form-C,

issued to them, but in the bills, raised by them, they had charged the price of the diesel, which included VAT of 22%, and thereby they had received

the payment from the Coal Companies, including the VAT amount of 22%, which was in violation of the provisions, under Sections 47(1)(b) and 48(1)

of the Jharkhand Value Added Tax (JVAT) Act, 2005, (herein after referred to as the ‘JVAT Act’), and why appropriate action be not be

taken against them for the violations of these provisions of the JVAT Act.

For carrying out their work contract, the petitioners Companies are the inter-State purchasers of High Speed Diesel at the concessional rate 2% of

CST, on the basis of Form-C.

In the e-tender notice, issued by the CCL, there was a Clause, which was also there in the e-tender notices of the other Coal Companies as well,

which read as follows:-

“26. All duties, taxes and other levies payable by the Contractor except the service tax under the Contract, or for any other cause as

applicable on the last date of submission of tender, shall be included in the rates, prices and total Bid price submitted by the Bidder. All

incidentals, overheads etc. as may be attendant upon execution and completion of works shall also be included in the rates, prices and total

Bid price submitted by the bidder.

However such duties, taxes, levies etc. which is notified after the last date of submission of tender and/or any increase over the rate existing

on the last date of submission of tender shall be reimbursed by the Company on production of documentary evidence in support of payment

actually made to the concerned authorities. Any decrease in duties, taxes, levies etc. as above shall be recovered by the Company.â€​

In the same e-tender notice, there was also a provision for payment of price variation, which reads as follows:-

“37.00 PAYMENT OF PRICE VARIATION:- If the prices of Diesel increases or decreases, the contractor shall be compensated for such

increase or recoveries shall be made from the dues of the contractor of such decrease as per provisions detailed below and the amount of

the contract shall accordingly be varied, subject to the condition that such compensation for variation in price shall be available only for

the work done during the stipulated period of the contract including such period for which the contract is validly extended under the

provisions of the contract without any penal action. If the contract is to be extended beyond the stipulated period for completion of the work

due to fault on the part of the contractor, escalation on price should not be allowed further if not provided otherwise in the accepted

contract.â€​

The work order was also issued to the petitioners and one of the work order, which had been issued by the CCL, shows that the rates, approved

were subjected to the price variation of Diesel, as per Clause-37 of the general terms and conditions of the notice, inviting tender.

It is the case of the petitioners in all these writ applications that in submitting their invoices, they had not charged the VAT from the Coal

Companies concerned, rather they had charged only the CGST and SGST, or the applicable Service Tax at the relevant point of time, and accordingly,

the notices issued to them for showing cause by the concerned Commertial Taxes Authorities, are absolutely without jurisdiction and cannot be

sustained in the eyes of law. Learned counsel has prayed for quashing of their individual notices, annexed in all the writ applications.

Learned counsels for the State, on the other hand, have opposed the prayer and submitted that these writ applications are not maintainable at this

stage, inasmuch as, only show cause notices have been issued to the petitioners Companies and they can appear before the respondent authorities and

satisfy them that the VAT at the rate of 22%, was neither paid by them at the time of purchase of High Speed Diesel, nor the said liability had been

passed on to the Coal Companies in their invoices.

Having heard learned counsels for both the sides, we are of the considered view that preliminary objection taken by the learned counsels for the

State are absolutely correct. At this stage, only notices have been issued to the petitioners Companies and they have been asked to satisfy the

Commercial Taxes Authorities, with the relevant documents, that they had not committed any breach of the provisions of Sections 47(1)(b) and 48(1)

of the JVAT Act. Admittedly, this is not a final action against the petitioners Companies, by which, the petitioners companies are aggrieved. At this

stage the petitioners Companies have only to satisfy the concerned authorities, with the help of the documents called for, that they had not committed

any violation of Sections 47(1)(b) and 48(1) of the JVAT Act, and in case they are able to satisfy the concerned authorities on these facts, no action is

warranted against them, for which, the final decision has to be taken by the Commercial Taxes Authorities, on the basis of the documents, to be

produced by the petitioners Companies.

We, accordingly, direct the petitioners Companies to appear before the Commercials Taxes authorities with the relevant documents, and their reply

to the show cause notices, which shall be considered by the authorities concerned, who may take appropriate action, taking into consideration the fact,

whether the petitioners companies had reduced the base price of the High Speed Diesel to the actual price, on which, the same was purchased by

them at the relevant point of time, and whether they had escalated or decreased their bills to the actual price of the High Speed Diesel paid by them,

as compared to the base price, quoted by them.

All these writ applications are accordingly, disposed of with the direction and observation as above.