2021 (2) TMI 148 - 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:
1. Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu to avail concessional benefit of tax.
2. Challenge to the order in Writ Appeal by the State.

Issue 1: Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu to avail concessional benefit of tax:

The petitioner, a dealer, sought 'C' Forms under the Central Sales Tax Act, 1956 to benefit from a concessional tax rate for purchasing High Speed Diesel from suppliers in other States. The issue was previously addressed in the case of M/s. Dhandapani Cement Private Limited Vs. The State of Tamil Nadu, where the court ruled in favor of the assessee. The court referenced similar decisions from other High Courts and the Supreme Court, affirming the entitlement of dealers to 'C' Forms for inter-state purchases. The court emphasized that this entitlement applies to all dealers seeking benefits under the law. The State intended to challenge the decision but had not done so yet. The court directed all Assessing Authorities in Tamil Nadu to apply the rationale of the decision to pending assessments until any reversal or stay of the order. The court allowed the Writ Petitions, emphasizing that the benefit should be extended to all eligible dealers.

Issue 2: Challenge to the order in Writ Appeal by the State:

After the initial order, the State filed a Writ Appeal challenging the decision in the case of Ramco Cements, which was later dismissed by a Division Bench of the Court. The Division Bench clarified the independent liability of purchasing dealers to pay tax under the CST Act, even if they are not liable to pay tax as sellers. The court emphasized that the rights of purchasing dealers to obtain 'C' Forms and benefit from concessional rates remain intact, despite amendments to the definition of 'goods.' The court rejected the Revenue's contention that dealers had lost their registration entitlement. The court highlighted the importance of maintaining the freedom of trade in inter-State commerce and dismissed the Writ Appeals filed by the State. The court directed the State not to restrict the use of 'C' Forms for inter-State purchases and quashed the circular letter restricting such use. The court allowed the Writ Petitions based on the rationale of the Writ Appeal decision.