2018 (5) TMI 2101 - HC - VAT and Sales Tax

Concessional rate of tax - mining services - generation of the electricity - Section 8(1) of the Central Sales Tax Act 1956 - HELD THAT - Section 8(1) to be read with Section 8(3) to be read with Section 8(d) of the Central Sales Tax Act 1956 vis-a-vis Article 246-A and 101st amendment to the Constitution of India otherwise at interim stage all the petitions will be decided finally. As there is a prima-facie case in favour of these petitioners balance of convenience is also in favour of these petitioners and if the stay as prayed for is not granted it will cause irreparable loss to these petitioners. The State of Jharkhand is hereby directed to issue necessary C Forms without prejudice to their rights and contentions and such C Forms may be utilized by these petitioners with the undertaking as noted hereinabove and all such actions shall be subject to the outcome of these writ petitions. Application allowed.

Summary

Issues:
Interpretation of Central Sales Tax Act, 1956 regarding concessional rate of tax for goods used in mining, electricity generation, and manufacturing.
Validity of Circular issued by the Principal Secretary -cum- Commissioner, Commercial Taxes Department, Jharkhand, Ranchi dated 11.10.2017.

Analysis:

Issue 1: Interpretation of Central Sales Tax Act, 1956
The judgment delves into the interpretation of Sections 8(1), 8(3), and 2(d) of the Central Sales Tax Act, 1956 concerning the concessional rate of tax for goods used in mining, electricity generation, and manufacturing. The court refers to a Supreme Court decision to establish that goods falling under Section 2(d) used for mining and electricity generation are entitled to a concessional tax rate of 2% as per Section 8(1). Furthermore, the judgment clarifies that if goods under Section 2(d) are utilized for manufacturing other goods, they can also be purchased at a concessional rate of tax. The court emphasizes the unambiguous nature of Section 8(3) in this regard, stating that the word 'goods' in the provision has different meanings based on context, allowing for concessional rates for certain uses.

Issue 2: Validity of Circular dated 11.10.2017
The judgment addresses the validity of a Circular issued by the Principal Secretary -cum- Commissioner, Commercial Taxes Department, Jharkhand, Ranchi dated 11.10.2017. The court stays the operation, implementation, and execution of this Circular during the pendency and final hearing of the writ petitions. It directs the State of Jharkhand to issue necessary 'C' Forms to the petitioners for inter-state purchases of goods defined in Section 2(d) of the Act. The petitioners are required to provide undertakings regarding the use of these forms and the payment of any tax differences if their challenge to the Circular fails. The judgment emphasizes the need for the petitioners to file an affidavit undertaking to pay the tax difference to selling dealers if the writ petitions are dismissed.

In conclusion, the judgment provides a detailed analysis of the interpretation of relevant sections of the Central Sales Tax Act, 1956 and addresses the validity of the Circular issued by the Commercial Taxes Department. The court grants interim relief to the petitioners based on a prima facie case in their favor and ensures necessary measures are taken to protect the interests of all parties involved in the dispute.