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Rajasthan High Court · body

2015 DIGILAW 1114 (RAJ)

Commercial Taxes Officer v. Penar Industries Ltd.

2015-05-22

J.K.RANKA

body2015
JUDGMENT : 1. Instant sales tax revision petition arises out of the order of the Rajasthan Tax Board (for short, 'Tax Board') dt.15/11/2003 passed in Appeal No.119/2003 by which the appeal filed by the petitioner-Revenue assailing the order of the Deputy Commissioner (Appeals) (for short, DC(A)') has been dismissed. 2. Instant petition was admitted vide order dt.30/04/2015 on the following substantial questions of law:- “1.Whether in the facts and circumstances of the case, providing and fixing profile-safety steel banker at hazardous location on National Highway No.8 is/was related to the roads or not ? 2.In the notification the intention of the notification was clear that the exemptions will be granted to “execution of works contract relating to buildings, bridges, dams, roads and canals”, whether fixing profile-safety steel banker at hazardous location on National Highway No.8 is/was execution of works contract relating to buildings, bridges, dams, roads and canals ? 3.When metal crash barrier and access control fencing can be fixed other than the roads, in these circumstances providing and fixing profile-safety steel banker and metal crash barrier and access control fencing at hazardous location on National Highway No.8 is/was related to the execution of work relating to roads or not ? 4.Whether in view of Rule 14 of the Sales Tax Rules, the exemption once granted can be withdrawn only on the premise that the same was obtained by fraud or misrepresentation, and not on the ground that the work in question was not covered by exemption so granted ?” 3. The brief controversy is that a contract was awarded to the respondent-M/s Penar Industries Ltd. (assessee) by the Rajasthan State Bridge Construction Corporation Ltd., Jaipur (for short, 'RSBCCL') for fixing of Works-Profile Safety Barrier at Toll Plaza, NH-8. On an application moved by the RSBCCL and the respondent-assessee jointly, the Assistant Commissioner, Works Contract & Leasing Tax, Division-I, Jaipur vide order dt.09/08/1999 granted certificate of exemption in Form ST-2 bearing No.6/05 directing that fixing of Works Profile Safety Barrier at Toll Plaza, NH-8 would entail exemption fee @ 1% with 12% surcharge and the same was required to be paid by the assessee. 4. The Assessing Officer (for short, 'AO') vide order dt. 4. The Assessing Officer (for short, 'AO') vide order dt. 27/11/2001 came to the conclusion that certificate of exemption though was related to every part of Roads but fixing and providing of Works Profile Safety Barrier could not be said to be relating to roads but these were safety steel barriers and could be used for the other purposes, other than road, therefore, withdrew the benefit available to the respondentassessee granted vide Certificate of Exemption No.6/45. 5. On an appeal filed by the respondent-assessee, the DC (A) agreed with the contention of the respondent-assessee and allowed its claim by holding that it is certainly used in the Roads and as such, allowed the appeal. 6. On an appeal filed by the petitioner-Revenue, the Tax Board also came to the conclusion that it relates to use in construction of road and safety measures, therefore, the exemption fee of 1% as was stated in the certificate granted on 09/08/1999 @ 1% and 12% surcharge was held to be just and proper. 7. Mr. Archit Bohra, appearing on behalf of Mr. RB Mathur, counsel for the petitioner submits that the assessee travelled beyond the works contract granted to it, therefore, the AO was justified in holding that the safety steel barriers were not fixed in accordance with the exemption notification and has rightly come to the conclusion that once it did not act in accordance with the exemption notification, then all benefits arising out of it were certainly lost. He further relied on Rule 14 of the RST Act that if the exemption certificate has been obtained by fraud or misrepresentation, then the exemption can be denied and this is what the assessee did and it was rightly denied by the AO and accordingly contended that the order of the Tax Board was not proper. Counsel also relied on a judgment of Kerala High Court in the case of State of Kerala Vs. Thrimathy Contracting Company : 2009(4)KLT 982. 8. On the contrary, Mr. Kasliwal ld. counsel for the respondent-assessee contended that it is a finding of fact by the authorities below that providing and fixing of the Safety Steel Barrier, relate to Toll Plaza and Roads and once a finding of fact has been reached by the authorities below that it is part of fixing in Roads, then the Tax Board rightly came to the said conclusion. He contended that even the AO admits in the last para of the assessment order that the exemption granted was for all parts of Roads and it is certainly used in the Roads, then the Tax Board has rightly come to the said conclusion. 9. I have considered the arguments advanced by counsel for the parties and perused the impugned order. 10. When we go through the certificate of exemption granted to the assessee bearing No.6/45, it shows that it was in favour of the Resident Engineer, RSBCC Ltd. Jaipur and the assessee took the contract of developing National Highway No.8 and it was granted contract relating to fixing of “W. Profile Safety Barrier at Toll Plaza, National Highway No.8”. The AO, in the last part of the assessment order, has observed that as per notification dt.28/04/1993. Exemption fee @1% was chargeable on the entire work related to Roads. Therefore, when the entire work relating to Roads has been charged @ 1% as per notification dt.28/04/1993, then to say that fixing of “W. Profile Safety Barrier” was not used for the purposes of Roads, is unjustified on the part of the AO. When the notification itself says that exemption fee is to be charged @1%, relating to safely work of road, then in my view, it is part and parcel of providing and fixing, may be at Toll Plaza but it is certainly part of a road. Though road has not been defined anywhere but in Chambers' Dictionary, it is stated to be “A track suitable for wheeled traffic, A Highway, A roadway, A way of approach”. Merely putting concrete, grit, coaltar cannot be said to be a road but in the present day conditions, when Mega Highways are being constructed, as in the present case, which is National Highway No.8, relating to Jaipur-Delhi National Highway, certainly one is required to have latest technology and safely measures installed which would certainly be part and parcel of roads. To say that fixing of W. Profile Safety Barrier is not relating to road, in my view, is contrary to what can be said to be part of a road. 11. To say that fixing of W. Profile Safety Barrier is not relating to road, in my view, is contrary to what can be said to be part of a road. 11. On the National Highway, as in the instant case, not only small vehicles travel but heavy vehicles i.e. Trucks , trailers also travel and keeping in view the various sizes of the vehicles, such roads are being constructed and safety measures are adopted so that the accidents may not take place and only on account of fixing safety measures, the assessee was awarded contract of fixing “W. Profile Safety Barrier at Toll Plaza, National Highway No.8”, which, in my view, is certainly relating to part of the road. Developing/constructing a road over the years require latest technology and it is not merely putting concrete, grit, coal tar etc but many more things. The words “relating to” has a wide meaning and cannot be restricted only to putting of concrete, grit, coal tar etc but it should mean everything relating to road. The expression such as “arising out of“ or “in respect of the” or “in connection with” or “in relation to” or “in consequence of” or “concerning” or “relating to” the contract are of the widest amplitude and content and include even questions as to the existence, validity and effect (scope). 12. The Hon'ble Apex Court expressed “We are of the opinion that the words "pertaining to" and "in relation to" have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method followed in good drafting. The word "pertain" is synonymous with the word "relate" , see Corpus Juris Secundum, Volume 17, Page 693.The expression "in relation to" (so also "pertaining to"), is a very broad expression which presupposes another subject matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context, see State Wakf Board v. Abdul Azeez ( AIR 1968 Mad 79 ), following and ap-proving Nitai Charan Bagchi v. Suresh Chandra Paul: 1962 (66) Cal WN 76, Shyam Lal v. M. Shyamlal: AIR 1933 All. 649 and 76 Corpus Juris Secundum 621. 649 and 76 Corpus Juris Secundum 621. Assuming that the investments in shares and in lands do not form part of the undertakings but are different subject matters, even then these would be brought within the purview of the vesting by reason of the above expressions. In this connection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is Stated that the terms "relate" is also defined as meaning to bring into association or connection with. It has been clearly mentioned that "relating to" has been held to be equivalent to or synonymous with as to "concerning with" and "pertaining to". The expression "pertaining to" is an expression of expansion and not of contraction. ( AIR 1995 SC 1102 : Mansukhlal Dhanraj Jain and others Vs. Eknath Vithal Ogale) 13. In my view, when we reach to a conclusion that fixing of profile-safety steel banker at hazardous location on National Highway No.8, related to road, then the other questions need not be answered because once an opinion has been reached that it was related to road, then the other questions become academic in nature. 14. It may also be observed that counsel for the Revenue stated about Rule 14 of the Sales Tax Rules and contended that the assessee obtained the certificate of exemption by misrepresentation or fraud, in my view, in the instant case, the argument of the counsel for the Revenue is wholly fallacious when the AO himself observes that as per notification dt.28/04/1993, the exemption fee is leviable @ 1% on all the parts relating to the road, then this argument is wholly unjustified and deserves to be rejected outrightly. In my view, when both the appellate authorities have come to a definite finding of fact, then even otherwise, placing reliance on Rule 14 by the counsel for the Revenue, is not proper. What fraud has been played, counsel was unable to plead. 15. Counsel for the Revenue also relied upon a judgment in the case of State of Kerala Vs. Thrimathy Contracting Company (supra) but in my view, the facts are distinguishable and not applicable in as much as in the case before the Kerala High Court, the matter only related as to whether supplying and applying hot white thermoplastic road marking paint, marking of pedestrian cross, zebra crossing etc. Thrimathy Contracting Company (supra) but in my view, the facts are distinguishable and not applicable in as much as in the case before the Kerala High Court, the matter only related as to whether supplying and applying hot white thermoplastic road marking paint, marking of pedestrian cross, zebra crossing etc. with white and yellow paints on road, was pre-construction of the road or a post construction work and it was held by the Kerala High Court that marking of road was not part of construction of road and it was post construction work done for safe vehicular movement and purpose was to guide drivers and pedestrians using road under a separate contract. 16. Accordingly, the question of No.1 is answered in favour of the assessee and against the Revenue. Since question No.1 has been decided in favour of the assessee and answers the controversy in hand, the other questions are not required to be answered and left open. Consequently, the instant revision petition is accordingly dismissed with no order as to costs.