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IN THE HIGH COURT OF JUDICATURE AT PATNA
RAJEEV RANJAN PRASAD, SOURENDRA PANDEY, JJ.
Ircon International Ltd., a Company incorporated - Petitioner
Versus
The State of Bihar through Commissioner of State Tax, Bihar, Patna having its Office at Vikas Bhawan, Patna. – Respondent
Civil Writ Jurisdiction Case No.3600 of 2020 with Civil Writ Jurisdiction Case No.
11625 of 2019 Civil Writ Jurisdiction Case No. 1716 of 2023
Decided On : 25-02-2026
Bihar Value Added Tax Act, 2005 – Sections 2(zc), 31 and 35 – Civil Procedure Code, 1908 – Section 11 – Rate of tax – Fabrication of steel into bridge superstructure – Reassessment orders and demand notices – Principles of res judicata would not apply to tax proceedings – Ultimate transfer of property in goods occurred when goods were incorporated in works – Twin tests of transformation and marketability are also getting satisfied from materials on record – With fabrication of structural steel, distinct constituent, elements and structure are incorporated so as to make it a functional utility – Once structural steel is transformed with fabrication and installation/erection in terms of works contract, it passes final tests of marketability – Final test of marketability must be conducted keeping in view nature of works contract and value attached with the same – No ground to interfere with impugned order of Assessing Officer and notice of demand – Writ applications dismissed. (Paras 60, 88, 89 and 90)
Constitution of India – Article 226 – Writ Jurisdiction – Alternative remedy – Rule of alternative remedy is a rule of prudence and not of law – Where writ petitions had remained pending for long period and interim protection had been granted, High Court would not dismiss them on the ground of availability of alternative remedy. (Para 61)
| Table of Content |
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| 1. linked writs heard analogously. (Para 1 , 2 , 3 , 4) |
| 2. quash bvat reassessments and demands. (Para 5 , 6 , 7) |
| 3. bridge steel superstructure works contract facts. (Para 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 4. ao disallows fabrication labour deductions. (Para 15 , 16 , 17 , 18) |
| 5. steel declared goods; 5% rate; sub-contract deductible. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34) |
| 6. superstructure unspecified goods at 13.5%. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46) |
| 7. contract and impugned reassessment details. (Para 47 , 48 , 49 , 50 , 51) |
| 8. no res judicata in tax proceedings. (Para 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60) |
| 9. writ maintainable despite alt remedy. (Para 61) |
| 10. works contract taxed per art 286(3). (Para 62 , 63 , 64 , 65) |
| 11. goods value at incorporation excludes labour. (Para 66 , 67 , 68 , 69 , 70 , 71 , 72) |
| 12. sub-contract costs embedded in goods value. (Para 73 , 74 , 75 , 76 , 77) |
| 13. fabrication workshop transforms steel girders. (Para 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86) |
| 14. fabrication satisfies transformation; deductions rejected. (Para 87 , 88 , 89) |
| 15. writs dismissed upholding order. (Para 90) |
JUDGMENT :
RAJEEV RANJAN PRASAD, J.
There are seven writ applications listed together for hearing. At the outset, learned counsel for the petitioners as well as the State have jointly submitted that the three writ applications, i.e. CWJC No. 3600 of 2020, CWJC No. 11625 of 2019, and CWJC No. 1716 of 2023, are required to be heard together as they involved identical questions for adjudication.
2. Learned counsel(s) have pointed out the order dated 17.02.2023, wherein the joint submissions of the parties have been recorded by the then learned coordinate Bench. So far as the other four writ applications (CWJC No. 3800 of 2019, CWJC No. 13258 of 2019, CWJC No. 13286 of 2019 and CWJC No. 13854 of 2019) are concerned, they do not involve the same legal issues but were ordered to be listed next below the above three cases. It has been submitted that the fate of those four writ applications should depend upon the result of the three writ applications. Therefore, this Court would consider the other four writ applications together.
3. Heard Mr. Tarun Gulati, learned Senior Counsel and Mr. D.V. Pathy, learned Senior Counsel in all the writ applications and Mr. Vikash Kumar, learned SC-11 for the State. Parties have also filed their respective written notes of submissions which have been taken on record.
4. On the request of the learned counsel for the parties, CWJC No. 3600 of 2020 has been taken as the lead case. This Court would, however, reproduce the prayers made in all the writ applications hereunder for a ready reference:-
CWJC No. 3600 of 2020
5. The petitioner in this writ application is seeking the following reliefs:-
“i) the show cause notice dated 23.11.2018 issued by the respondent no. 2 under section 31 of the Bihar Value Added Tax Act, 2005 be quashed.
ii) the order dated 09.01.2020 (as contained in Annexure-7 series) passed by the respondent no. 2 for the period 2014-15 under section 31 of the Bihar Value Added Tax Act, 2005 be quashed.
iii) the notice of demand dated 25.01.2020 (as contained in Annexure-7 series) issued by the respondent no. 2 in pursuance of the order of assessment be quashed.
iv) for granting any other relief(s) to which the petitioner is otherwise found entitled to.”
6. The petitioner in CWJC No. 11625 of 2019 is seeking the following reliefs:-
“i) the order dated 03.03.2019 (as contained in Annexure- 6 Series) passed by the respondent no. 2 for the period 2013-14 under section 31 of the Bihar Value Added Tax Act, 2005 (hereinafter called the Act) be quashed.
ii) the notice of demand dated 30.03.2019 (as contained in Annexure- 6 Series) issued by the respondent no. 2 in pursuance of the order of assessment be quashed.
iii) for granting any other relief(s) to which the petitioner is otherwise found entitled to.”
7. The petition
Fabricated steel superstructure in works contract is distinct from structural steel, taxable as unspecified goods at 13.5%; sub-contractor fabrication costs form part of taxable value at incorporatio....
The taxable turnover of a works contractor for the transfer of property involved in the execution of works contract shall be arrived after deducting the value of goods used in the execution of works ....
Assessment orders issued beyond the three-year limit under Section 24(5) of the PVAT Act, 2007 are invalid; powder coating activities constitute a works contract subject to taxation.
The petitioner's appeal against the Assessment Order under sec. 23(4) of the MVAT Act was dismissed by the Court on the grounds of the availability of an alternative remedy and the presence of disput....
The assessment order issued without proper notice and outside statutory limitation is invalid, emphasizing the necessity of compliance with the principles of natural justice.
The court found that even if the impugned actions of the authorities concerned were not strictly in conformity with law or were irregular or were illegal or even perverse, such findings, by themselve....
Tax assessments must comply with principles of natural justice, including the right to cross-examine witnesses, or they may be quashed.
Composite Show Cause Notices under the Central Goods and Service Tax Act can be issued involving multiple tax periods, as adjudication procedures differ from assessment mechanisms, allowing for broad....
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