2021 (1) TMI 857 - HC - VAT and Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - respondent fairly submits that the issue involved in this Writ Petition is squarely covered by a decision of this Court in the case of M/s. Dhandapani Cement Private Limited Vs. The State of Tamil Nadu, 2019 (2) TMI 1850 - MADRAS HIGH COURT wherein on identical issue it was held that 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. HELD THAT - The State has, after the date of the above order, filed a Writ Appeal challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court 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 and it was held that Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers. Petition allowed.

Summary

Issues involved:
1. Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu to avail concessional tax benefit.
2. Application of court decisions regarding entitlement to 'C' Forms to all pending assessments in Tamil Nadu.
3. Challenge to the decision in the case of Ramco Cements Ltd. through a Writ Appeal.
4. Interpretation of Sections 7(1) and 7(2) of the CST Act regarding registration and liability to pay tax.
5. Rights of purchasing dealers under the CST Act and the impact of the amendment of the definition of 'goods' in 2017.

Analysis:
1. The judgment addresses the issue of entitlement to 'C' Forms for purchasing High Speed Diesel from out-of-state suppliers for concessional tax benefits. The court references previous decisions favoring dealers in similar cases, emphasizing that the benefit of concessional rates is available to dealers engaging in inter-state sales. This principle has been upheld by various courts, including the Supreme Court, establishing a precedent applicable to all dealers seeking such benefits. The court directs all assessing authorities in Tamil Nadu to apply this rationale to pending assessments, rejecting the notion that only parties to specific decisions can benefit, as these judgments are binding on all dealers seeking similar relief. The Writ Petitions are allowed, and necessary actions are mandated by the department.

2. Following the above order, the State files a Writ Appeal challenging the decision in the Ramco Cements case. The Division Bench dismisses the appeal, affirming that purchasing dealers can retain registration under the CST Act independently of their liability to pay tax, as per Sections 7(1) and 7(2) of the Act. The court clarifies that the amendment to the definition of 'goods' in 2017 does not affect the rights of purchasing dealers to continue purchasing at concessional rates using 'C' Forms. It emphasizes that the CST Act's scope remains intact for purchasing dealers, ensuring their right to inter-state trade and purchase. The court rejects contentions from the Revenue, highlighting that denying such rights would lead to unconstitutional discrimination. The Writ Appeals by the Revenue are dismissed, and the State is directed not to restrict the use of 'C' Forms for inter-state purchases, quashing previous circulars and proceedings against dealers in Tamil Nadu.

3. The State expresses intent to challenge the Writ Appeal decision through a Special Leave Petition. However, as the Writ Appeal order stands final, the court allows the Writ Petition based on the rationale of the previous decision. No costs are imposed, and the connected Miscellaneous Petition is closed.