[Cites 8, Cited by 0]
Patna High Court
M/S Acc Limited (Previously Known As ... vs The State Of Bihar on 16 December, 2025
Author: Anshuman
Bench: Anshuman
IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.14 of 2023
======================================================
M/S ACC Limited (Previously known as M/S Associated Cement Companies
Ltd.), a Company incorporated under provisions of the Indian Companies Act,
1913, having its office at Samridhi Complex, S.P. Verma Road, P.S. Gandhi
Maidan, District- Patna (Bihar) through its Chief Manager Finance and
authorised signatory Debjyoti Adhikary (Male) aged about 44 years, son of
Late Birendra Nath Adhikary, Resident of Flat No. 1B, Block- 3, Katyayani
Complex, 31, Italgacha Road, Kolkata- 700079, P.O. Italgachan, P.S Dumdum
and District North 24 Parganas.
... ... Appellant/s
Versus
1. The State of Bihar through the Principal Secretary, Commercial Taxes
Department, Bihar, Patna.
2. The Joint Commissioner of Commercial Taxes (Appeals), Central Division,
Patna.
3. The Deputy Commissioner of Commercial Taxes, Special Circle, Patna.
... ... Respondent/s
======================================================
with
Miscellaneous Appeal No. 8 of 2023
======================================================
M/s. ACC Limited (Previously known as M/s. Associated Cement Companies
Ltd.), a Company incorporated under provisions of the Indian Companies Act,
1913, having its Office at Samridhi Complex, S.P. Verma Road, P.S. Gandhi
Maidan, District- Patna (Bihar) through its Chief Manager Finance and
authorised signatory Debjyoti Adhikary (Male) aged about 44 years, son of
Late Birendra Nath Adhikary, resident of Flat No. 1B, Block- 3, Katyayani
Complex, 31, Italgacha Road, Kolkata- 700079, P.O. Italtgacha, P.S. Dumdum
and District- North 24 Parganas
... ... Appellant/s
Versus
1. The State of Bihar through the Principal Secretary, Commercial Taxes
Department, Bihar, Patna.
2. The Joint Commissioner of Commercial Taxes (Appeals), Central Division,
Patna.
3. The Deputy Commissioner of Commercial Taxes, Special Circle, Patna.
... ... Respondent/s
======================================================
with
Patna High Court MA No.14 of 2023 dt. 16-12-2025
Miscellaneous Appeal No. 10 of 2023
======================================================
M/S. ACC LIMITED (Previously known as M/s. Associated Cement
Companies Ltd.), a Company incorporated under provisions of the Indian
Companies Act, 1913, having its Office at Samridhi Complex, S.P. Verma
Road, P.S. Gandhi Maidan, District- Patna (Bihar) through its Chief Manager
Finance and authorised signatory Debjyoti Adhikary (Male) aged about 44
years, son of Late Birendra Nath Adhikary, resident of Flat No. 1B, Block- 3,
Katyayani Complex, 31, Italgacha Road, Kolkata- 700079, P.O. Italgacha,
P.S.- Dumdum and District- North 24 Pargans.
... ... Appellant/s
Versus
1. The State of Bihar through the Principal Secretary, Commercial Taxes
Department, Bihar, Patna.
2. The Joint Commissioner of Commercial Taxes (Appeals), Central Division,
Patna.
3. The Deputy Commissioner of Commercial Taxes, Special Circle, Patna.
... ... Respondent/s
======================================================
with
Miscellaneous Appeal No. 11 of 2023
======================================================
M/s. ACC Limited (Previously known as M/s. Associated Cement Companies
Ltd.), a Company incorporated under provisions of the Indian Companies Act,
1913, having its Office at Samridhi Complex, S.P. Verma Road, P.S. Gandhi
Maidan, District- Patna (Bihar) through its Chief Manager Finance and
authorised signatory Debjyoti Adhikary (Male) aged about 44 years, son of
Late Birendra Nath Adhikary, resident of Flat No. 1B, Block- 3, Katyayani
Complex, 31, Italgacha Road, Kolkata- 700079, P.O. Italtgacha, P.S. Dumdum
and District- North 24 Parganas
... ... Appellant/s
Versus
1. The State of Bihar through the Principal Secretary, Commercial Taxes
Department, Bihar, Patna.
2. The Joint Commissioner of Commercial Taxes (Appeals), Central Division,
Patna.
3. The Deputy Commissioner of Commercial Taxes, Special Circle, Patna.
... ... Respondent/s
======================================================
with
Miscellaneous Appeal No. 15 of 2023
Patna High Court MA No.14 of 2023 dt. 16-12-2025
======================================================
M/S ACC Limited (Previously Known as M/S. Associated Cement
Companies Ltd.), a Company incorporated under provisions of the Indian
Companies Act, 1913, having its Office at Samridhi Complex, S.P. Verma
Road, P.S. Gandhi Maidan, DIstrict- Patna (Bihar) through its Chief Manager
Finance and authorised signatory Debjyoti Adhikary (Male) aged about 44
years, son of Late Birendra Nath Adhikary, resident of Flat No. 1B, Katyayani
Complex, 31, Italgacha Road, Kolkata- 700079, P.O. Italgacha, P.S. Dumdum
and District North 24 Parganas.
... ... Appellant/s
Versus
1. The State of Bihar through the Principal Secretary, Commercial Taxes
Department, Bihar, Patna.
2. The Joint Commissioner of Commercial Taxes, Special Circle, Patna.
3. The Deputy Commissioner Taxes, Special Circle, Patna.
... ... Respondent/s
======================================================
Appearance :
(In Miscellaneous Appeal No. 14 of 2023)
For the Appellant/s : Mr. Ramesh Kumar Agrawal, Advocate
Mr. Sanjeev Kumar, Advocate
For the Respondent/s : Mr.Vikash Kumar, SC-11
(In Miscellaneous Appeal No. 8 of 2023)
For the Appellant/s : Mr. Ramesh Kumar Agrawal, Advocate
For the Respondent/s : Mr.Vivek Prasad, GP-7
Mrs. Manisha Singh, AC to GP-7
(In Miscellaneous Appeal No. 10 of 2023)
For the Appellant/s : Mr.Ramesh Kumar Agrawal, Advocate
Mr. Sanjeev Kumar, Advocate
For the Respondent/s : Mr.Vikash Kumar, SC-11
(In Miscellaneous Appeal No. 11 of 2023)
For the Appellant/s : Mr.Ramesh Kumar Agrawal, Advocate
For the Respondent/s : Mr.Vivek Prasad, GP-7
Mrs. Manisha Singh, AC to GP-7
(In Miscellaneous Appeal No. 15 of 2023)
For the Appellant/s : Mr.Ramesh Kumar Agrawal, Advocate
For the Respondent/s : Mr.Vivek Prasad, GP-7
Mrs. Manisha Singh, AC to GP-7
======================================================
Patna High Court MA No.14 of 2023 dt. 16-12-2025
CORAM: HONOURABLE MR. JUSTICE BIBEK CHAUDHURI
and
HONOURABLE MR. JUSTICE DR. ANSHUMAN
C.A.V. JUDGMENT
(Per: HONOURABLE MR. JUSTICE DR. ANSHUMAN)
Date : 16-12-2025
Heard Mr. Ramesh Kumar Agrawal, learned
Advocate, assisted by Mr. Sanjeev Kumar, learned Advocate, for
the appellant in all the Miscellaneous Appeals mentioned above;
Mr. Vikash Kumar, learned SC-11, in Miscellaneous Appeal No.
14 of 2023 and Miscellaneous Appeal No. 10 of 2023; and Mr.
Vivek Prasad, learned GP-7, assisted by Mrs. Manisha Singh,
AC to GP-7, in Miscellaneous Appeal No. 8 of 2023,
Miscellaneous Appeal No. 11 of 2023, and Miscellaneous
Appeal No. 15 of 2023, for the respondent.
2. All the present Miscellaneous Appeals have been
filed against the common judgement dated 29.09.2022, passed
by the Commercial Taxes Tribunal, Bihar, Patna. Miscellaneous
Appeal No. 14 of 2023 arises out of Revision Case No. PT-
264/2004 for the period 1998-99 (Appeal value Rs.
2,30,37,023/-). Miscellaneous Appeal No. 8 of 2023 relates to
Revision Case No. PT-199/2006 for the period 2000-01 (Appeal
value Rs. 84,10,189.14). Miscellaneous Appeal No. 10 of 2023
arises out of Revision Case No. PT-191/2004 for the period
Patna High Court MA No.14 of 2023 dt. 16-12-2025
1996-97 (Appeal value Rs. 84,24,092.56). Miscellaneous
Appeal No.11 of 2023 pertains to Revision Case No. PT-
192/2004 for the period 1997-98 (Appeal value Rs.
48,68,338.40). Miscellaneous Appeal No. 15 of 2023 has been
filed against the judgement dated 29.09.2022 relates to Revision
Case No. PT-197/2006 for the period 1999-2000 (Appeal value
Rs. 97,92,738/-).
3. In all the appeals, a common question is
involved, and therefore, this Court deems it fit and proper to
hear the aforesaid five appeals together.
4. The brief facts of the present appeals are that the
appellant, M/s ACC Limited, is a company incorporated under
the provisions of the Indian Companies Act, 1913, and is
represented through its Chief Manager (Finance). The appellant
company is engaged in the business of manufacture and sale of
cement. Its three manufacturing units are located in the State of
Bihar at Sindri, Chaibasa, and Khalari, and it has a network of
warehouses situated throughout the State for the distribution and
sale of cement received from its factories located within Bihar
as well as from various factories located outside the State. The
appellant's factories and warehouses are registered under the
provisions of the Bihar Finance Act, 1981 and the rules framed
Patna High Court MA No.14 of 2023 dt. 16-12-2025
thereunder, in different circles of the Commercial Taxes
Department. The respondent, Commissioner of Commercial
Taxes, Bihar, Patna, granted permission to the appellant to file
consolidated returns in respect of sales of cement from all the
warehouses and factories at the Special Circle, Patna.
4.1 According to the appellant, the rate of tax on
different goods is fixed under Section 12 of the Bihar Finance
Act, 1981. Sales tax at the rate of 4% on gunny bags (packing
material), 7% on HDPE bags (packing material), and 11% on
cement was payable during the period under consideration. The
appellant duly paid the said tax on packing material and cement
under Section 12 of the Act. It is further submitted that, the
appellant paid the taxes at the prescribed rates from time to
time, no dues remained outstanding against the appellant.
4.2 Learned counsel for the appellant further
submits that no adverse material or entry was found against the
company by the tax authorities either during inspection or
during the examination of the appellant's books of account. It is
submitted that the assessment was completed under Section
17(2)(b) of the Bihar Finance Act, 1981. The assessing authority
disallowed the entire claim of the appellant on account of trade
discount and held that the same would be subjected to the
Patna High Court MA No.14 of 2023 dt. 16-12-2025
normal rate of tax at 11%. The assessing authority also rejected
the appellant's contention with regard to the applicable rate of
tax on packing materials, namely gunny bags and HDPE bags.
The appellant filed appeals before the Joint Commissioner of
Commercial Taxes (Appeal), Central Division, Patna, against
the respective assessment orders, but the same were dismissed
insofar as the issues of trade discount and packing material were
concerned. Thereafter, the appellant preferred revisions against
the appellate orders, which were also dismissed on the issues of
disallowance of trade discount and the claim for separate
taxation of packing materials.
4.3 Learned counsel for the appellant further
submits that the statute prescribes separate rates of tax for
packing materials and cement, and therefore the disallowance of
a separate tax on packing materials, resulting in the
enhancement of the appellant's Gross Turnover (GTO), is
contrary to law. It is further submitted that Section 12 of the
Bihar Finance Act, 1981 is clear and unambiguous.
4.4 Learned counsel further submits that, in the
Schedule of the notification issued under the Bihar Sales Tax
fifth Ordinance, 1977, the rate of sales tax fixed for cement is
11%, whereas the rate on gunny bags is 4% and on HDPE bags
Patna High Court MA No.14 of 2023 dt. 16-12-2025
is 7%, both being packing materials. It is therefore submitted
that the decisions of the Assessing Authority, the Appellate
Authority, and the Revisional Authority are wholly contrary to
the provisions of the Bihar Finance Act, 1981.
5. In support of his argument, learned counsel for
the appellant relied on the judgment rendered in Mathuram
Agrawal v. State of Madhya Pradesh, reported in (1999) 8
Supreme Court Cases 667, and submits that in this judgment
the Hon'ble Supreme Court of India has clearly held that the
intention of the Legislature in a taxation statute is to be gathered
from the language of the provisions, particularly where the
language is plain and unambiguous. It has further been held that,
in a taxing Act, it is not permissible to assume any intention or
governing purpose of the statute beyond what is stated in the
plain language.
5.2 Learned counsel for the appellant has also relied
on another judgment rendered in M/s Govind Saran Ganga
Saran v. Commissioner of Sales Tax & Ors., reported in AIR
1985 Supreme Court 1041, and submits that in this case the
Hon'ble Supreme Court held that when the language of the
statute is clear and admits of no ambiguity, recourse to the
Statement of Objects and Reasons for the purpose of construing
Patna High Court MA No.14 of 2023 dt. 16-12-2025
a statutory provision is not permissible.
5.3 Learned counsel for the appellant further relied
on the judgment rendered in Raj Steel & Ors. v. State of A.P. &
Ors., reported in (1989) 3 SCC 262, and submits that the issue
as to whether packing material has been sold or merely supplied
without consideration depends upon the contract between the
parties. The Court held that the fact that the packing material is
of insignificant value in relation to the value of the contents may
imply that there was no intention to sell the packing; however,
where any packing material is of significant value, it may imply
an intention to sell the packing material. In a case where the
packing material is an independent commodity and both the
packing material and the contents are sold independently, the
packing material is liable to tax on its own footing.
6. Learned counsel for the appellant further submits
that cement and bags are two different commodities which have
been sold independently. Therefore, in consonance with Section
12 of the Bihar Finance Act, 1981 and in view of the decisions
of the Hon'ble Supreme Court of India, it becomes evident that
the invoices prepared by the appellant company paying tax at
11% on cement and 4% / 7% on bags are absolutely in
accordance with law, and there was no occasion for any
Patna High Court MA No.14 of 2023 dt. 16-12-2025
interference. Hence, it is submitted that a pure substantial
question of law has arisen, namely that the finding of the
Tribunal disallowing the claim of tax on packing material and
cement separately at separate rates is wholly contrary to law.
7. Learned counsel for the respondent submits that
under the Bihar Finance Act, 1981, the term "sale price" has
been expressly defined in Section 2(u). The said provision
clearly stipulates that "sale price" means the amount payable to
a dealer as valuable consideration in respect of the sale or
supply of goods. In support of this submission, learned counsel
for the respondent has placed reliance on the judgment of the
Hon'ble Supreme Court in Commissioner of Sales Tax, U.P. v.
Rai Bharat Das and Bros., reported in (1989) 1 SCC 143,
particularly paragraph 7, which is relevant for the present
controversy, is extracted as under :-
7. We are of the opinion, in view of the
facts found by the Tribunal which must be taken to
be conclusive, and in the light of Section 2 (h) of the
Act, the High Court was in error. In the facts of this
case such packing charges could be included. There
was an agreement to sell the gunny bags, as found
by the Tribunal. The price of silica was shown
separately and the cost of packing was also shown
separately. In view of the definition of Section 2(h)
of the Act, anything which was an integral part
included (sic including) any sum charged for
Patna High Court MA No.14 of 2023 dt. 16-12-2025
anything done by the dealer in respect of the goods,
may form part but anything supplied separately
pursuant to a separate order, directions or
specifications to the purchaser, could not form part
of the sale price of the gunny bags. This was done in
order to putting them in deliverable state and
incidental to the same.
8. Upon hearing the parties, this Court is of the view
that the substantial question of law arising in this appeal is
"whether, under the Bihar Finance Act / Bihar Sales Tax Act,
sales tax can be charged separately on gunny bags and
HDPE bags and on cement at different rates namely 4%,
7%, and 11% respectively as contended by the appellant, or
whether the "sale price" on which sales tax is to be levied
must be treated as a consolidated amount @ 11 %
irrespective of the separate prices shown in the invoices ?.
9. For deciding this substantial question of law, it is
necessary to examine the statutory scheme. The present matter
is fully governed by the Bihar Finance Act, 1981, as amended
from time to time. It is evident that the levy of sales tax has
always been on the sale price of the goods in question and 'sale
price' has been separately defined in Section 2(u) of the Act.
Therefore, the statutory definition of "sale price" contained in
Section 2(u) of the Act assumes central importance and is
reproduced below:
Patna High Court MA No.14 of 2023 dt. 16-12-2025
"(u) 'sale price' means the amount
payable to a dealer as valuable consideration
respect of the sale or supply of goods.
Explanation. 1 - Sale price shall
include any amount charged by the dealer for
anything done in respect of the goods at the time
of or before delivery thereof to the buyer.
Explanation II- Sale price shall not
include the cash discount allowed by the dealer
according to the ordinary trade practice, if
shown separately. It shall also not include the
cost for transport of the goods from the seller to
the buyer, provided such cost is separately
charged to the buyer."
10. It has been held that the packing of cement in
gunny/HDPE bags was carried out by the dealer either at the
time of, or prior to, the delivery of the goods. Consequently,
there existed an implied agreement of sale to sell the packing
material along with the contents therein. Although this is
essentially a question of fact, no such contract or agreement was
ever placed on record or argued either before the Assessing
Authority or before the Tribunal by the appellant.
11. A bare reading of Section 2(u) makes clear that
the definition of "sale price" applies in the present case. Under
Section 2(u), the sale price on which tax is liable to be paid is
Patna High Court MA No.14 of 2023 dt. 16-12-2025
the amount payable to a dealer as valuable consideration in
respect of the sale or supply of goods. In the present matter, the
term "goods" includes cement along with its packing material.
12. With regard to the judgments cited by learned
counsel for the appellant Mathuram Agrawal (supra), Govind
Saran Ganga Saran (supra), and Raj Steel & Ors. v. State of
A.P. & Ors. (supra) it is to be noted that these decisions merely
reiterate that, in commercial law, statutory language must be
interpreted plainly. Here, Section 2(u) clearly defines the sale
price, and its plain meaning must prevail.
13. Therefore, we are of the considered view that
the substantial question whether cement and packing material
should be taxed separately does not arise, nor would such a
position be legally correct, particularly when the appellant has
brought no factual material on record. The plain reading of
Section 2(u) governs the issue.
14. Accordingly, the substantial question of law is
answered against the appellant and in favour of the respondent,
and it is held that the order passed by the Assessing Authority,
the Appellate Authority, and the Revisional Authority are fully
in accordance with law and calls for no interference.
15. In view of the above, all the appeals referred
Patna High Court MA No.14 of 2023 dt. 16-12-2025
above stand dismissed.
16. Any interlocutory application pending in these
matters shall stand disposed of accordingly.
(Dr. Anshuman, J)
Bibek Chaudhuri, J : I agree.
(Bibek Chaudhuri, J)
Ashwini/-
AFR/NAFR
CAV DATE 05.12.2025
Uploading Date 16/12/2025
Transmission Date
