2023 (10) TMI 952 - HC - VAT and Sales Tax

Contractual dispute or not - security being insisted to be furnished by the Petitioner s members by way of a bank guarantee - requirement of filing of Form C within a span of three months - monthly compliance not required - amicable settlement of the dispute - HELD THAT - There certainly appears to be a friction which is caused between the parties although the relation between the parties is contractual in view of the statutory mechanism, which is in operation under the Central Sales Tax Act and, more particularly, in respect of release of Form C, which are required to be furnished by the Petitioner to the IOCL, to avail the benefit of the tax paid. The Petitioners are admittedly the dealers of the petroleum products as supplied by the Respondent IOCL. In the peculiar facts of the case, it would be appropriate that the statutory mechanism is required to be discussed between the parties and appreciated in its proper perspective so that the dispute in this regard as asserted in the present proceedings can be resolved amicably. The present petition needs to be disposed of by directing the Respondent - Deputy General Manager, IOCL, to hear the Petitioner and after appreciating the contentions of the Petitioner on the statutory canvass as involved, take an appropriate decision by passing a reasoned order on such representation by keeping open all contentions of the parties - petition disposed off.

Summary

Issues Involved:
The petition involves a dispute regarding the requirement of a bank guarantee for differential tax for supply made against C Forms, as well as the threat to stall the supply of High-Speed Diesel Oil (HSD) and Petrol, which the Petitioner claims violates their fundamental rights to carry on trade.

Details of the Judgment:

Issue 1: Bank Guarantee Requirement
The petition challenges the insistence on furnishing a bank guarantee for the differential tax for supply made against C Forms. The Petitioner argues that this requirement is in violation of their fundamental rights to carry on trade. The Court notes the statutory obligation under the Central Sales Tax Act for dealers to submit Form C for interstate transactions within three months. The Court directs the Deputy General Manager of IOCL to hear the Petitioner's contentions on the statutory aspect and make a reasoned decision on the representation, keeping all contentions open.

Issue 2: Threat to Stall Supply
The petition also seeks relief from the threat to stop the supply of HSD and Petrol, as indicated in certain letters. The Court emphasizes the need for an amicable resolution between the parties, considering the long-standing relationship between the Petitioners and IOCL. It directs that no coercive action be taken against the Petitioners until a decision is made on the representation, and any adverse order shall not be enforced for two weeks after communication.

Conclusion:
The Court disposes of the writ petition without costs, emphasizing the importance of resolving the issues amicably and in the interest of both parties. The decision highlights the need for the statutory mechanism to be discussed and appreciated to facilitate a resolution of the dispute.