2022 (5) TMI 1113 - HC - VAT and Sales Tax

Concessional rate of tax - issuance of C form, which are required for procurement of Extra Neutral Alcohol (ENA) and Malt Spirit utilized for manufacturing of Indian Made Foreign Liquor (IMFL) used for human consumption - HELD THAT - 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 the respondent authorities have, therefore, rightly refused to issue 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 CHEMICALS LTD., ETC. VERSUS STATE OF UP. 1989 (10) TMI 214 - SUPREME COURT , 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-section(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 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 sub-section (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. There are no substance in this petition, so as to call for any interference in the alleged communication/letter dated 26-07-2019 (Annexure P-1) declining the petitioner for issuance of C Form under the CST Act for the procurement of ENA and Malt Spirit utilized for manufacturing of IMFL - petition dismissed.

Summary

Issues:
Challenge to denial of "C" form for procurement of Extra Neutral Alcohol (ENA) and Malt Spirit for manufacturing Indian Made Foreign Liquor (IMFL) under Central Sales Tax Act, 1956 (CST Act).

Analysis:
1. The petitioner, a registered dealer under CST Act and Chhattisgarh Value Added Tax Act, sought "C" form for concessional tax rate on ENA and Malt Spirit used in IMFL production. The denial post-GST Act enforcement was contested, claiming entitlement due to goods' human consumption. Relied on Shree Raipur Cement Plant case.
2. Respondents argued post-amendment only "alcoholic liquor for human consumption" qualifies as goods under CST Act. Cited Synthetics and Chemicals Ltd case supporting exclusion of ENA and Malt Spirit from human consumption category.
3. Court analyzed CST Act Section 2(d) pre and post-amendment, highlighting the amended definition's focus on "alcoholic liquor for human consumption." Ruled ENA and Malt Spirit not fitting this category based on Synthetics and Chemicals Ltd principles.
4. Rejected petitioner's reliance on GST Act Section 9(1) & (2) as ENA and Malt Spirit weren't fit for human consumption. Noted no notification under GST Act for these items.
5. Distinguished Shree Raipur Cement Plant case, emphasizing its inapplicability to present facts. Dismissed the petition challenging denial of "C" form for ENA and Malt Spirit procurement for IMFL manufacturing.
6. Judgment: Dismissed the petition, no costs awarded.