2022 (5) TMI 864 - HC - VAT and Sales Tax

Concessional Rate of Tax - Seeking appropriate direction, commanding the Respondent Authorities to issue C Form to the petitioner - seeking to consider the application filed by the petitioner for issuance of C Form - Manufacture of foreign liquor-9 - HELD THAT - Supreme Court in the matter of SYNTHETICS CHEMICALS LTD., ETC. VERSUS STATE OF UP. 1989 (10) TMI 214 - SUPREME COURT , wherein it has been held that the Rectified Spirit and the ENA are not the alcoholic liquor for human consumption - thus, the ENA and the Malt Spirit in its original form are not the alcoholic liquor fit for human consumption and would therefore, not come within the amended definition of clause(d) of Section 2 of the CST Act and in view thereof, the petitioner would not be entitled to get the C Form, as claimed by the petitioner herein. Based upon the principles laid down by the Constitutional Bench of the Supreme Court in the matter of Synthetics and Chemicals Ltd and others vs. State of U.P. and others , the ENA and Malt Spirit are not the alcoholic liquor, which is fit for human consumption in its original form. Therefore, the provision prescribed under sub-sections (1) (2) of Section 9 of the GST Act as tried to be implemented herein by learned counsel for the petitioner, would, however not be applicable. Sub-section(1) of Section 9 of the said GST Act states that subject to the provisions of sub-section(2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption. Since the ENA and Malt Spirit in its original form are not found to be fit for human consumption, as observed hereinabove, therefore, no reliance could be placed on it. In so far as the applicability of subsection( 2) of the aforesaid provision is concerned, the same is, however, also not applicable as the notification required to be issued under it, is only with regard to the supply of items mentioned in clauses (i) to (v) of the amended provision of clause(d) of Section 2 of the CST Act and as the ENA and Malt Spirit are not found to be alcoholic liquor fit for human consumption, therefore, it would not fall in any of the said categories and, no notification as such, is therefore, required to be issued, as contended by learned counsel for the petitioner. Petition dismissed.

Summary

Issues:
1. Interpretation of the definition of "Goods" under the CST Act before and after the amendment.
2. Entitlement of the petitioner to obtain a "C" Form for the purchase of ENA and Malt Spirit under the CST Act post-GST implementation.
3. Application of the principles laid down by the Supreme Court in the case of Synthetics and Chemicals Ltd regarding alcoholic liquor for human consumption.
4. Analysis of the applicability of Section 9 of the GST Act to the petitioner's case.
5. Comparison of the present case with the decision in Shree Raipur Cement Plant vs. State of Chhattisgarh.

Analysis:
1. The case involves the interpretation of the definition of "Goods" under the CST Act before and after the amendment. The amendment, effective from 05-05-2017, specifically included "alcoholic liquor for human consumption" under the definition of goods. Prior to the amendment, all materials, articles, and commodities were included under the definition, covering alcohol of any character. However, post-amendment, only alcoholic liquor for human consumption falls under the definition.

2. The petitioner, a registered dealer under the CST Act, sought a "C" Form for the purchase of ENA and Malt Spirit post-GST implementation. The petitioner argued that as the materials were used for human consumption, they should be eligible for the "C" Form. However, the respondents denied the Form citing the amended definition of goods under the CST Act.

3. The principles established by the Supreme Court in the case of Synthetics and Chemicals Ltd were applied to determine that ENA and Malt Spirit, in their original form, are not fit for human consumption. Therefore, they do not fall under the category of alcoholic liquor for human consumption as per the amended definition of goods under the CST Act.

4. The analysis extended to the applicability of Section 9 of the GST Act, which exempts alcoholic liquor for human consumption from taxation. As ENA and Malt Spirit were not considered fit for human consumption, the provisions of Section 9 were deemed inapplicable to the petitioner's case.

5. The judgment distinguished the present case from the decision in Shree Raipur Cement Plant vs. State of Chhattisgarh, emphasizing that the circumstances and items under consideration were different. The principles laid down in the previous case did not apply to the petitioner's situation, leading to the dismissal of the petition.