2021 (9) TMI 944 - HC - VAT and Sales Tax

Benefit of concessional rate of duty - C-Form not issued - purchase of high speed diesel for manufacture of cement - HELD THAT - Taking into consideration the fact that in case the C-Form is subsequently found to be wrongly issued or obtained then it is always within the power of the State to charge a higher rate of GST payable alongwith the penalty for which the petitioner shall always be exposed. Withholding the C-Form in any way will not serve any bodies purpose as the petition will take some time for final hearing. It is directed that the State shall issue C-Form to the petitioner which would be subject to the final adjudication of the entitlement of the petitioner's C-Form and if it is found that the petitioner were not entitled to get the C-Form, then in such case they shall be liable for the consequences of penalty and higher rate of GST and other measures which are provided under the law - List the case after six weeks along with WPT No. 42 of 2021.

Summary

Issues involved:
Interpretation of CST Act, 1956 and CGST Act, 2017 regarding high speed diesel; Entitlement of petitioner/company for issuance of C-Form under CST Act; GST implications on high speed diesel; Application for grant of interim relief.

Analysis:

The petitioner's counsel argued that the petitioner/company should be issued the C-Form as per a previous judgment by the court. It was highlighted that the petitioner uses high-speed diesel for cement manufacturing and procures it from Indian Oil. The issue revolved around the imposition of GST on high-speed diesel and the issuance of the C-Form, which the petitioner claimed they were entitled to based on the court's previous ruling.

The State's counsel mentioned that a reply was being prepared. The court referred to a previous judgment where it was held that the petitioner, a registered dealer under the CST Act, 1956, is valid for inter-State sale and purchase of high-speed diesel despite transitioning to the GST regime. The court emphasized that the petitioner is entitled to the issuance of the C-Form for high-speed diesel purchases used in cement manufacturing.

The court directed the State to issue the C-Form to the petitioner, subject to final adjudication. It was noted that if the C-Form was later found to be wrongly issued or obtained, the State could charge a higher rate of GST and penalties. Withholding the C-Form was deemed unnecessary as the final hearing would take time. The State was instructed to issue the C-Form, with the understanding that any incorrect issuance would lead to penalties and higher GST rates as per the law.

The court scheduled the case for listing after six weeks along with another related matter. The judgment clarified the petitioner's entitlement to the C-Form for high-speed diesel purchases and outlined the consequences if the entitlement was found to be invalid. The ruling aimed to balance the petitioner's immediate needs with the potential repercussions of any incorrect issuance of the C-Form.