2023 (1) TMI 1180 - HC - VAT and Sales Tax

Refund of excess amount of CST paid - claim of sales at concessional rate of 2% has been rejected by the respondent no.3 on the ground that the tax had been borne by the petitioner and not by the Petronet - HELD THAT - The legal issue is well settled not only by the decision of CARPO POWER LIMITED VERSUS STATE OF HARYANA AND OTHERS 2018 (4) TMI 146 - PUNJAB AND HARYANA HIGH COURT , but also by the decision of this Court in the case of J.K. CEMENT LTD. VERSUS STATE OF GUJARAT 2020 (3) TMI 140 - GUJARAT HIGH COURT , where this Court had categorically permitted the petitioner the refund of excess amount of the tax paid to the seller. It was a case where the petitioner had purchased from the Reliance Industries Limited the HSD in the course of inter-state trade for use of mining activities. The petitioners as the ultimate consumers had sought before the Court the amount of excess tax by producing the C-form, which had been issued by the Rajasthan authority. The excess tax had been collected by the seller Reliance Industries Limited, the CST Authority at Rajasthan. Since they issued the C-form declaration in respect of the transaction in question and the seller had already been collected the tax from the petitioner, the refund was directed not to be given by the Reliance Industries on the ground that it was not entitled to such refund as the claim would be hit by the principles of unjust, enrichment. In that case, the petitioner had furnished the statement showing the details of the purchases, tax charged and submission of C forms against the purchases as well as copy of sample invoices, etc. and the Court therefore, held that the petitioner duly complied with the direction issued by the Rajasthan High Court, the respondent authority was bound to process the refund claims under Section-11(B) of the Central Excise Act. The respondents accordingly were directed to process the refund claims of the respective petitioners and grant refund of the tax amount collected from the petitioners and deposited by the seller in accordance with law within stipulated time period. The respondents shall process the refund claim of the petitioner and grant the refund of tax amount collected from the petitioner and deposited by the seller in accordance with law, within period of four weeks from the date of receipt of a copy of this order - Petition allowed.

Summary

Issues:
1. Claim for refund of excess Central Sales Tax paid by the petitioner.
2. Interpretation of legal provisions regarding the issuance of C-forms for inter-State transactions.
3. Compliance with the directions issued in previous judgments regarding refund claims.

Analysis:
1. The petitioner, a public sector undertaking, entered into a Gas Sale and Purchase Agreement with a company for Regasified Liquefied Natural Gas. The petitioner procured goods at a concessional rate of 2% against C-forms before the GST regime. Due to ambiguity in the issuance of C-forms post-GST, the petitioner paid 15% tax under the CST Act. However, following a previous judgment, C-forms were issued, and the petitioner sought a refund of excess tax paid by the seller. The respondent rejected the claim, stating the tax was borne by the petitioner. The petitioner filed a petition seeking a writ of mandamus for refund under the CST Act.

2. The Court referred to the Carpo Power Limited case, where it was held that Sales Tax Departments are liable to issue C-forms for natural gas transactions. Another case involving a similar refund claim for excess tax paid by a petitioner was cited, where the Court directed the authorities to process refund claims promptly. The Court emphasized that the seller had already collected the tax and issued C-forms, making the petitioner eligible for a refund to avoid unjust enrichment.

3. After hearing arguments, the Court directed the respondent to process the refund claim within four weeks, complying with previous judgments and legal provisions. The Court clarified that the seller would not be entitled to claim any refund based on specific facts presented. The petition was allowed, and the rule was made absolute for the refund of the tax amount collected from the petitioner and deposited by the seller. The judgment ensured the petitioner's right to claim a refund of excess tax paid, following the legal provisions and previous court decisions.

This detailed analysis covers the issues involved in the judgment, highlighting the legal interpretations, compliance with previous judgments, and the final decision granting the refund claim to the petitioner.