2023 (11) TMI 815 - HC - VAT and Sales Tax

Permission to petitioner to issue/generate the 1st respondent to allow the petitioner to generate Form C declaration under the Central Sales Tax Act, 1956 - purchase of Extra Neutral Alcohol (ENA) effected from outside the State of Tamil Nadu - HELD THAT - The product supplier of ENA have been following the Central Sales Tax Act and have paid the tax accordingly. In the present case, the petitioner's supplier also paid the tax under the CST Act and their assessment have been pending for the reason that they have not furnished Form 'C' by the petitioner due to the reason that the respondents have blocked the portal. As contended by the learned Additional Advocate General, the fact remains that no decision has been taken by the GST Council with regard to whether ENA has to be included in the CST regime or excluded. All the States have been consistently following CST and taxes also been paid accordingly. In view of the fact that in the recent 52nd GST Council Meeting held on 07.10.2023, a decision was taken to keep the ENA used for manufacture of alcoholic liquor for human consumption to keep the same outside the purview of GST, this Court is of the considered view that it would be appropriate to direct the respondents to issue Form 'C' from 01.07.2017 to till date for all the purchases made by the petitioner from outside the State or inside the State and further, this Court also directs the respondent to keep open the web portal for the ENA commodity, so that the petitioner can upload the purchases of ENA alongwith 'C' Form etc. - It is made clear that the State shall issue Form 'C' for the purchases made from the other states until the Law Committee issues suitable amendment in law to exclude ENA for use in manufacture of alcoholic liquors for human consumption from the ambit of GST, as per the decision taken in the 52nd GST Council Meeting held on 07.10.2023. This writ petition is disposed of.

Summary

Issues involved:
The issues involved in the judgment include the petitioner's request for the issuance of a writ of certiorarified mandamus to quash the arbitrary and illegal blocking of Code No.302 by the respondent department, which prevented the petitioner from reporting inter-state purchases of Extra Neutral Alcohol (ENA) under the Central Sales Tax Act, 1956.

Issue 1: Blocking of Code No.302 and inability to generate Form 'C' for ENA purchases:
The petitioner, engaged in manufacturing Alcoholic Liquor, faced challenges in reporting inter-state purchases of Extra Neutral Alcohol (ENA) post-GST implementation due to the blocking of Code No.302 by the respondent department. This hindrance prevented the petitioner from generating Form 'C' declarations for ENA purchases, leading to non-compliance with reporting requirements under the CST Act, 1956.

Issue 2: Applicability of GST on ENA and lack of decision by GST Council:
The petitioner argued that the GST Council had not conclusively decided on the applicability of GST on ENA, despite discussions in various meetings. The petitioner contended that until a final decision is made, the respondent department should not deny the issuance of Form 'C', as the responsibility for charging correct tax rates lies with the selling dealer in inter-state transactions involving ENA.

Issue 3: Stand of the State and recent GST Council decision on ENA:
The State expressed its preference to keep ENA outside the purview of GST, as stated in the 43rd GST Council Meeting. Subsequently, in the 52nd GST Council Meeting, a decision was made to exclude ENA used for manufacturing alcoholic liquor from GST. The court considered these developments and directed the respondents to issue Form 'C' for ENA purchases from July 1, 2017, onwards until suitable amendments are made in the law to exclude ENA from GST.

Separate Judgment Highlight:
No separate judgment was delivered by the judges in this case.