2021 (2) TMI 965 - 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 - Petitioner fairly submits that the issue involved in this 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 till such time the order of this court in the case of M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) 2018 (10) TMI 1529 - MADRAS HIGH COURT is either stayed or reversed it is incumbent upon all Assessing Authorities within the State of Tamil Nadu to apply the rationale of the decision to all pending assessments. 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. 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 holding 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. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu. Mr.Jaya Pratap submits that the State intends to challenge the order in Writ Appeal by way of a Special Leave Petition - As on date, however the order in Writ Appeal is final, and following the rationale thereof, this Writ Petition is allowed.

Summary

Issues Involved:
Interpretation of entitlement to 'C' forms for purchase of High Speed Diesel from other states under the Central Sales Tax Act, 1956.

Detailed Analysis:

Issue 1: Entitlement to 'C' Forms for concessional tax benefit
The judgment discusses the entitlement of dealers to 'C' forms under the Central Sales Tax Act for the purchase of High Speed Diesel from suppliers in other states. It references a previous decision in the case of M/s. Dhandapani Cement Private Limited Vs. The State of Tamil Nadu, where a similar issue was considered and decided in favor of the assessee. The judgment highlights that the benefit of concessional rates is available to dealers making inter-state purchases, as confirmed by various court decisions, including the Supreme Court. The court emphasizes that the benefit applies to all dealers seeking it, not limited to those party to specific cases. The State's intention to challenge the decision is noted, but until then, all assessing authorities are directed to apply the rationale of the decision to pending assessments.

Issue 2: Challenge to the decision
Following the initial judgment, 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 judgment clarifies that liability to pay tax on purchases is independent of the seller's liability under the CST Act. It explains the provisions of Section 7(2) of the Act, emphasizing that purchasing dealers can obtain registration independently. The court rejects the contention that dealers have lost their entitlement to registration under the CST Act, emphasizing the continuity of rights for purchasing dealers despite amendments to the definition of 'goods.'

Conclusion:
The judgment upholds the entitlement of dealers to 'C' forms for concessional tax benefits on inter-state purchases, emphasizing the inclusive application of court decisions and rejecting attempts to restrict such entitlement. It clarifies the independent liability of purchasing dealers under the CST Act and affirms the rights of dealers to registration and concessional tax rates, irrespective of specific sales criteria. The State's challenges are dismissed, and directions are provided to ensure the continued availability of 'C' forms for inter-state purchases of specified commodities.