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TMI Blog2023 (8) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondents 2, 3, and 6 for refund of an amount of Rs. 38,22,897. It is the petitioner's contention that the said amounts were illegally deducted and recovered from the bills of the petitioner as advance Value Added Tax purportedly under the provisions of Section 40 and 41 of the Bihar Value Added Tax Act, 2005 (for brevity "VAT Act"). 2. The petitioner argues that the VAT Act has absolutely no applicability since the manufacture and supply of the goods by the petitioner to the Railways was an inter-state sale; which is not exigible to sales tax within the State of Bihar either as a sale of goods or as a works contract. 3. We have heard Shri Satyabir Bharti, learned counsel for the petitioner and Shri Anshay Bahadur Mathur, learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Electrical Private Ltd. v. Union of India; 2011 (2) PLJR 444, State of Orissa and Anr. v. K.B. Saha and Sons Industries (P) Ltd and Ors.; (2007) 9 SCC 97, Commissioner, Delhi Value Added Tax v. ABB Limited; (2016) 6 SCC 791 and Kone Elevator India Private Limited v. State of Tamil Nadu; (2014) 7 SCC 1 to contend that the transaction was a pure and simple sale of goods and that too an inter-state sale on which Central Sales Tax (for brevity "CST") has been paid by the petitioner which is added in the invoice raised against the respondents. 6. The learned counsel appearing for the Railways specifically refers to the counter affidavit dated 26.11.2014 filed on behalf of the respondent Railways. It is pointed out that Clause 34 of the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es from another State on the basis of a prior contract and is subjected to accretion in the works. Kone Elevator India Private Limited puts to rest any controversy as to what a works contract is. There should be a composite contract for supply of goods and labour, which is absent in the present case. 8. In the present case, the issue is simplified insofar as the sale being mere manufacture and supply of goods which is a sale simplicitor of the goods; which goods have also been transported in pursuance to a prior contract of sale which is the reason for the movement of the goods from one State to the other; herein from the State of West Bengal to the State of Bihar. A Constitution Bench of the Hon'ble Supreme Court in State of A.P. v. Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to the various depots belonging to themselves from where the agent collected the goods and delivered it to the ultimate purchaser. The assesse-appellant claimed it as a branch transfer. The Hon'ble Supreme Court found favour with the order of the Assessing Officer, which found it to be an inter-state sale exigible to tax under the CST Act. The Hon'ble Supreme Court after referring to a number of decisions on the point stated the principle thus in Paragraph 39, which is reproduced hereunder :- 39. "From the above decisions, the principle which emerges is-when the sale or agreement for sale causes or has the effect of occasioning the movement of goods from one State to another, irrespective of whether the movement of goods is provided fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le not exigible to tax within the State of Bihar. 11. The Railways had made a deduction on the ground that it is a works contract; which we have negatived. The Railways is bound to refund the illegal tax deduction made from the bills to the petitioner contractor. The Railways could definitely apply for refund from the Bihar Value Added Tax Department. 12. In this context, we have to notice Pandit Electrical Private Ltd. that the Railways in a similar transaction was held to have made deduction illegally in an inter-state transaction. 13. The learned Standing Counsel for the Railways pointed out that there is an arbitration clause in the agreement and that the jurisdiction of this Court cannot be invoked under Article 226, especially in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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