2020 (9) TMI 393 - HC - VAT and Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT - The issue squarely covered in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) 2019 (2) TMI 1850 - MADRAS HIGH COURT where it was held that he Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/s Ramco Cements Ltd can be extended only to those dealers that are party to the decision. This stand is unacceptable in so far as the decision of this Court as well as other High Courts, one of which has been confirmed by the Supreme Court, are decisions in rem, applicable to all dealers that seek benefit thereunder, of course, in accordance with law. The order in Writ Appeal is final, and following the rationale thereof, these Writ Petitions are allowed.

Summary

Issues:
Interpretation of entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu under the Central Sales Tax Act, 1956.

Analysis:
The judgment dealt with the issue of dealers facing difficulties in obtaining 'C' forms for purchasing High Speed Diesel from suppliers in other states to avail concessional tax benefits. The court referred to a previous decision in a similar case and held that the benefit of concessional rates is available to dealers making inter-state purchases. The court cited decisions from other High Courts and the Supreme Court supporting the dealers' entitlement to the benefit. The court emphasized that the benefit applies to all dealers seeking it, not just those party to the specific case. The court directed all assessing authorities in Tamil Nadu to apply the decision's rationale to all pending assessments until any appeal against the decision is resolved.

The State filed a Writ Appeal challenging the decision, which was subsequently dismissed by a Division Bench. The Division Bench clarified that the liability to pay tax on purchases is independent of the liability of the seller under the CST Act. It highlighted that even purchasing dealers can register under the CST Act, irrespective of their liability to pay tax as a seller. The court rejected the contention that dealers lost their entitlement to registration under the CST Act due to amendments in the definition of 'goods.' It emphasized that the freedom of trade in inter-State commerce is protected by the Constitution and cannot be restricted based on the type of goods being purchased.

The Division Bench further emphasized that the right to purchase goods at concessional rates under 'C' Forms should not be denied to industries like Cement Industries, as it would result in unjust classification and violate constitutional provisions. The court dismissed the Writ Appeals filed by the State, directing the authorities not to restrict the use of 'C' Forms for inter-State purchases of specified commodities and to allow online downloading of such forms. The court set aside circulars restricting the use of 'C' Forms and directed the inclusion of High Speed Diesel Oil as a commodity in the registration certificate for the petitioners.

In conclusion, the court upheld the entitlement of dealers to 'C' Forms for inter-State purchases, emphasizing the protection of trade freedom and rejecting attempts to restrict such entitlement based on amendments or classifications.