The court affirmed that classification of goods as used primarily for manufacturing triggers enhanced entry tax rates under applicable provisions of the Entry Tax Act.

Order :

Sanjay K. Agrawal, J.

1. 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 VAT Act’) has referred the following questions of law for decision by this Court under Section 55(1) of the VAT Act, which state as under:-

Common questions of law in Tax Case Nos.29/2024 & 44/2024

1. Whether under the facts and the circumstances of the case the Tribunal is justified to hold that applicant dealer is manufacturer u/s-2(n) of the CG Vat Act and the provision of Sec.4-A of the entry tax applies.

2. Whether under the facts and circumstances of the case the Tribunal is justified to rely upon the decision of the High Court in the case of Rewa Coal Fields Ltd. Shahdol Vs. Sales Tax Commissioner, M.P. & Others (1994) 18 CTJ, page-71 which is under the MP General Sales Tax Act when the definition of manufacture u/s-2(j) was wide enough even to include collection of sand from river bed.

3. Whether under the facts and circumstances of the case the Tribunal is justified to apply the definition of raw material in this case whereas the issue is on manufacture. The CG Vat Act do not define raw material.

Questions of law in Tax Case No.27/2024

1. Whether under the facts and the circumstances of the case inspite of accepting that the appellant do not hold explosive license the amount of Rs. 13,10,772/- in the balance sheet as blasting expenses, the Tribunal is justified to hold that this is purchase of explosive.

2. Whether under the facts and circumstances of the case the Tribunal is justified to rely upon the decision of the High Court in the case of Rewa Coal Fields Ltd. Shahdol Vs. Sales Tax Commissioner, M.P. & Others (1994) 18 CTJ, page-71 which is under the MP General Sales Tax Act when the definition of manufacture u/s-2(j) was wide enough even to include collection of sand from river bed.

3. Whether under the facts and circumstances of the case, the Tribunal is justified to conclude that, the appellant has not produced the receipts and expenditure of the contract from Telecommunication consultants Limited.

2. Since common question of law arises for consideration in these three tax cases, except question Nos.1 & 3, they have been clubbed together, heard together and are being disposed of by this common order.

3. The aforesaid questions of law arise for decision on the following factual backdrop: -

{For the sake of convenience, Tax Case No.27/2024 (M/s. Balajee Minerals v. Commissioner of Commercial Tax) is taken as lead case.}

4. M/s. Balajee Minerals (applicant in Tax Case No.27/2024) entered into agreement for supply of blasting material (explosives) with M/s. Starex Minerals (applicant in Tax Case Nos.29/2024 & 44/2024). The applicant/assessee had filed 1^st & 3^rd quarterly returns on time and 2^nd & 4^th quarterly returns were filed with delay, however, the annual returns were not filed. Show cause notice for assessment was issued to the applicant and documents were filed on behalf of the applicant in which it is shown that the applicant had purchased explosives of Rs. 13,10,772/- and calculated entry tax @ 1%. However, the Assessing Officer was of the view that the explosives were being used for mining and therefore entry tax was to be collected at enhanced rate as per Section 4A of the Chhattisgarh Entry Tax Act, 1976 and accordingly, assessment order was passed by the Assessing Officer for the assessment year 2010-11 against which the applicant filed appeal which was allowed by the appellate authority vide order dated 10-11-2016 and entry tax on explosives was charged as 1% in place of 10%, thereby, extending the benefit of Rs. 1,19,106/- to the assessee/applicant. The Commissioner, Commercial Tax, Raipur exercising suo motu revisional jurisdiction in case of the assessee, enhanced entry tax under Section 4A of the Chhattisgarh Entry Tax Act, 1976 and set aside the order dated 10-11-2016 and restored the assessment order dated 30-12-20