2018 (5) TMI 1871 - HC - VAT and Sales Tax

Non-issuance of C form for various quarters of the year 2017-18 - concessional rate of tax on H.S.D. - Section 8(4) of the CST Act - HELD THAT - In the present case, it is the H.S.D. and it is included in the amended definition of goods and no notification under the above provisions of Section 9(2) in case of H.S.D. has been issued till date. In the present case, the Parliament has retained high speed diesel along with petroleum crude, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption crude which have been specifically mentioned in Section 9 of the GST Act while defining the goods . Besides, the registration under Section 7(2) of the Act is still valid and has not been cancelled and can be cancelled only within the parameters of Section 4 of the CST Act. This Court in the case of CARPO POWER LIMITED VERSUS STATE OF HARYANA AND OTHERS 2018 (4) TMI 146 - PUNJAB AND HARYANA HIGH COURT finds that it is obligatory duty of the respondents to issue C form to the petitioner company and any failure on the part of the respondents to do so is without any authority of law. It is held that the respondents are liable to issue C' Forms in respect of the High Speed Diesel procured for mining purposes through interstate trade. In the event of the petitioners having had to pay any amount on account of the respondents wrongful refusal to issue C' Forms the petitioners shall be entitled to refund and/or adjustment of the same from the concerned authorities who collected the excess tax. - Petition allowed.

Summary

Issues Involved:
1. Non-issuance of 'C' forms for High Speed Diesel (H.S.D.) post-GST implementation.
2. Applicability of concessional tax rates under the Central Sales Tax Act, 1956.
3. Interpretation of amendments to the definition of 'goods' under the CST Act post-GST.

Detailed Analysis:

1. Non-issuance of 'C' forms for High Speed Diesel (H.S.D.) post-GST implementation:

The petitioners challenged the respondents' action of not issuing 'C' forms for various quarters of the year 2017-18 and thereafter. The petitioners, engaged in mining activities and registered under the CST Act, required H.S.D. for their operations and sought to procure it at a concessional rate of 2% CST through interstate trade. The respondents' refusal to issue 'C' forms would result in the petitioners having to purchase H.S.D. at a higher CST rate of 24%.

2. Applicability of concessional tax rates under the Central Sales Tax Act, 1956:

Under Section 8(1) and (3) of the CST Act, the petitioners were entitled to procure H.S.D. at a concessional rate by furnishing 'C' forms to the vendors. The Government of India's notification dated 01.07.2017 enforced the GST Act, under which many goods and services came under GST. However, H.S.D. was not included under GST, and thus, the CST Act and the Rajasthan Value Added Tax Act, 2003 continued to govern its taxation. The petitioners argued that until H.S.D. is brought under GST, they should be allowed to procure it at the concessional rate as per the CST Act.

3. Interpretation of amendments to the definition of 'goods' under the CST Act post-GST:

The respondents contended that the Taxation Laws (Amendment) Act, 2017, which amended the definition of 'goods' under Section 2(d) of the CST Act, limited 'goods' to six specific items, including H.S.D. The Ministry of Finance issued a clarification stating that the definition of 'goods' in Section 8(3)(b) of the CST Act would be as per the amended Section 2(d). However, this clarification did not affect the provisions of Section 8(3)(b) relating to telecommunication, mining, or the generation and distribution of electricity or power.

The court referred to the Division Bench judgment of the Punjab & Haryana High Court in Carpo Power Limited v. State of Haryana, which dealt with a similar issue. The court in Carpo Power Limited held that even after GST implementation, the items mentioned in the amended definition of 'goods' under the CST Act, including natural gas, continued to be governed by the CST Act until a notification under Section 9(2) of the GST Act was issued. The court found that the same reasoning applied to H.S.D. in the present case.

The court concluded that the respondents' refusal to issue 'C' forms was without legal authority. The registration under Section 7(2) of the CST Act was still valid and had not been canceled. Therefore, the respondents were obligated to issue 'C' forms to the petitioners for procuring H.S.D. for mining purposes through interstate trade.

Judgment:

The court allowed the writ petitions in terms similar to Carpo Power Limited. The respondents were directed to issue 'C' forms for H.S.D. procured for mining purposes through interstate trade. If the petitioners had paid excess tax due to the wrongful refusal to issue 'C' forms, they were entitled to a refund or adjustment from the concerned authorities. The authorities were instructed to process such claims within twelve weeks upon receiving the petitioners' written requests and requisite documents.