2020 (9) TMI 935 - HC - VAT and Sales Tax

Benefit of concessional rate of tax - difficulty in obtaining 'C' forms - purchase of High Speed Diesel from suppliers in other States - HELD THAT - The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. The issue involved in the Writ Petition is squarely covered by a decision of this Court in 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 , wherein it was held that The 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. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) 2018 (10) TMI 1529 - MADRAS HIGH COURT Ltd can be extended only to those dealers in 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 State has, after the date of the above order, filed a Writ Appeal in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED 2020 (3) TMI 450 - MADRAS HIGH COURT challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court. Mrs.G.Dhanamadhri, submits that the State intends to challenge the order in Writ Appeal by way of a Special Leave Petition. As on date, the order in Writ Appeal is final, and following the rationale thereof, the Writ Petition is allowed.

Summary

Issues:
1. Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers in other states.
2. Applicability of the decision in the case of M/s. Ramco Cements Ltd regarding concessional rate of tax.
3. Challenge by the State in Writ Appeal and subsequent decision.

Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers in other states:
The petitioner, a dealer, sought 'C' Forms under the Central Sales Tax Act, 1956 for purchasing High Speed Diesel from suppliers in other states to avail concessional tax benefits. The issue was found to be covered by a previous decision of the court in the case of M/s. Dhandapani Cement Private Limited. The court held that the benefit of concessional rates is available to dealers making inter-state purchases, as confirmed by various other High Courts and even the Supreme Court. The State did not dispute this position, and until any appeal against the decision is made, all assessing authorities in Tamil Nadu were directed to apply the rationale of the previous decision to pending assessments.

Applicability of the decision in the case of M/s. Ramco Cements Ltd regarding concessional rate of tax:
In a subsequent Writ Appeal filed by the State challenging the decision in the case of Ramco Cements Ltd, the Division Bench upheld the rights of dealers to continue having registration under the CST Act. The court emphasized that the liability to pay tax on purchases is independent of the seller's liability, allowing purchasing dealers to secure registration under the CST Act. The court rejected the contention that the amended definition of 'goods' restricted the operation of the CST Act, affirming the rights of purchasing dealers to obtain goods at concessional rates. The court dismissed the Writ Appeals filed by the State, directing the authorities not to restrict the use of 'C' Forms and permitting online downloading for such dealers.

Challenge by the State in Writ Appeal and subsequent decision:
After the Writ Appeal decision, the State expressed intentions to challenge it through a Special Leave Petition. However, as the Writ Appeal decision was final, the court allowed the petitioner's request for the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. The petitioner was granted the issuance of 'C' Forms within four weeks. The court emphasized that the rights of dealers to purchase goods at concessional rates should not be denied, as it would lead to an unconstitutional classification. The Writ Petition was allowed based on the rationale of the Writ Appeal decision.

This detailed analysis of the judgment highlights the issues of entitlement to 'C' Forms for purchasing High Speed Diesel, the applicability of previous decisions on concessional tax rates, and the challenge by the State in a subsequent Writ Appeal, providing a comprehensive overview of the legal proceedings and decisions made by the court.