IN THE HIGH COURT OF JUDICATURE AT PATNA CIVIL WRIT JURISDICTION CASE No.4695 of 2011 ====================================================== M/s Al-Helal Educational Trust, Muzaffarpur through its Executive Director cum Chairman Ashraf Khan, S/o Sri Ramzan Khan, R/o Moh.-Kachisarai, P.S.-Mithanpura, District-Muzaffarpur. .... .... Petitioner Versus 1. The State of Bihar. 2. The Principal Secretary, Commercial Taxes Department, Government of Bihar, Patna. 3. The Assistant Commissioner, Commercial Taxes, Muzaffarpur Circle, District-Muzaffarpur. 4. The Civil Surgeon-cum-Chief Medical officer, East Champaran at Motihari. .... .... Respondents ====================================================== Appearance : For the Petitioner : Mr. Md. Nadim Seraj with Mr. Shailesh Kumar Mr. Satish Kumar Sinha, Advocates. For the Respondent/s : Mr. Vikash Kumar, AC to AAG-1. ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE JYOTI SARAN ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 5. 16.05.2011 With the consent of the learned Advocates, petition is heard and decided today. The petitioner has filed this petition under Article 226 of the Constitution to challenge the action of the respondent no. 4 the Civil Surgeon-cum-Chief Medical Officer, East Champaran, Motihari in deducting 4% of the contractual amount as advance towards Value Added Tax. The petitioner claims that it has not entered into a works contract with the Civil Surgeon-cum-Chief Medical Officer, East Champaran, Motihari. The petitioner has entered into an agreement to supply electrical energy to the Patna High Court CWJC No.4695 of 2011 (5) dt.16-05-2011 2 Government hospitals in the district of East Champaran. Such electrical energy is generated by diesel generators and is supplied to the Government hospitals. Section 7 of the Bihar Value Added Tax Act, 2005 read with Item No. 20 of Schedule-I exempts the supply of electrical energy from payment of Value Added Tax. Although sufficient time has been given to the respondents, no counter affidavit has been filed for controverting the aforesaid assertions made by the petitioner. We, therefore, believe that there is no dispute to the fact that the petitioner is not a works contractor and is a supplier of electrical energy to the Government hospitals as asserted by the petitioner. Section 7 of the Bihar Value Added Tax Act, 2005 (hereinafter referred to as „the Act‟) provides for exemption from payment of Value Added Tax on sale or purchase of goods specified in Schedule-I. Item No. 20 of Schedule-I of the Act refers to “Electrical energy”. The Electrical energy being exempted goods, the petitioner is not liable to pay Value Added Tax on sale of electrical energy nor the respondent no. 4 Civil Surgeon–cum-Chief Medical Officer is justified in deducting 4% of the contractual amount as advance Value Added Tax. For the aforesaid reasons, the petition is allowed. Respondent no. 4 is directed not to make deduction towards Value Added Tax from the amount payable to the petitioner for supply of electrical energy to the Government hospitals. Patna High Court CWJC No.4695 of 2011 (5) dt.16-05-2011 3 The parties will bear their own cost. If necessary, the petitioner may take appropriate action for refund of the amount deducted by the respondent no. 4 towards Value Added Tax or may seek adjustment of such amount against its present/future liability to pay Value Added Tax, if any. Sujit (R.M. Doshit, CJ.) (Jyoti Saran, J.)