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2024 (8) TMI 989 - HC - VAT and Sales TaxConcessional rate of duty at 2% for goods described in Section 8 (3) of CST Act - Eligibility of the petitioner to issue declarations in C-Forms for inter-State purchase of natural gas post-GST implementation - Trade Circular No. 37T of 2017 dated 24 August, 2017 - HELD THAT - The issue which has fell for consideration in the present proceedings would stand squarely covered by the said decisions of the High Courts and the decision of the Supreme Court in The Ramco Cements Ltd. 2021 (3) TMI 1184 - SUPREME COURT where it was held that 'Considering the consistent view of nine High Courts, including dismissal of special leave petitions by different Bench of this Court, and being satisfied about the exposition on the matters in issue by the High Court of Madras vide impugned judgment and order being a possible view, we decline to interfere in these special leave petitions.' Thus, the petitioner would be entitled for issuance of C Form in respect of natural gas purchased by the petitioner from the oil company in Gujarat and used in their manufacturing activities as also in generation of electricity at captive power plant. The petition is allowed.
Issues Involved:
1. Eligibility of the petitioner to issue declarations in C-Forms for inter-State purchase of natural gas post-GST implementation. 2. Validity of Trade Circulars and Notifications affecting the issuance of C-Forms. 3. Legal precedents and their applicability to the current case. Detailed Analysis: Issue 1: Eligibility of the petitioner to issue declarations in C-Forms for inter-State purchase of natural gas post-GST implementation The petitioner engaged in the manufacture and sale of oleo-chemicals and personal care products, which involve inter-State purchase of natural gas from Hazira, Gujarat. The petitioner held registration certificates under the MVAT Act, 2002, and the CST Act, 1956. The petitioner contended that Section 8(1) of the CST Act provides for a concessional rate of duty at 2% for goods described in Section 8(3). Section 8(4) of the CST Act mandates a declaration in Form 'C' to avail of the concessional rate. The definition of 'goods' under Section 2(d) of the CST Act was amended effective 1 July 2017 to include only six items, including natural gas. The petitioner argued that the amended definition restricted the meaning of 'goods' to the six items enumerated, thereby excluding other commodities from the concessional rate. The petitioner sought a declaration that they are eligible to issue C-Forms for the inter-State purchase of natural gas used in the manufacture of commodities no longer defined as 'goods' post-1 July 2017. Issue 2: Validity of Trade Circulars and Notifications affecting the issuance of C-Forms Trade Circular No. 37T of 2017 and subsequent Circular No. 47T of 2017, along with an Office Memorandum dated 7 November 2017, reiterated that the term 'goods' in Section 8(3)(b) of the CST Act would have the same meaning as provided in Section 2(d). Consequently, the petitioner's MVAT and CST registrations were deemed canceled, restricting their ability to avail of the concessional rate for inter-State purchases of natural gas. The petitioner challenged these circulars and notifications, arguing that they were not able to log in to the online Maharashtra VAT portal using their MVAT and CST registration details. However, during the pendency of the petition, the impugned circulars were withdrawn, and the petitioner amended their prayers to focus on the issuance of C-Forms for natural gas used in manufacturing and electricity generation. Issue 3: Legal precedents and their applicability to the current case The petitioner relied on the decision of the Punjab and Haryana High Court in Carpo Power Ltd. vs. State of Haryana, where it was held that the respondents were liable to issue C-Forms for natural gas used in electricity generation. A similar view was taken by the High Court of Jharkhand in Tata Steel Ltd. vs. The State of Jharkhand & Ors., which held that the term 'goods' in Section 8(3)(b) does not necessarily mean 'goods' as defined in Section 2(d) of the CST Act. The Supreme Court in The Commissioner of Commercial Taxes & Anr. vs. The Ramco Cements Ltd. affirmed the views of the Punjab and Haryana High Court and the High Court of Jharkhand, stating that nine High Courts had taken a similar view, and the Union of India had issued an Office Memorandum directing all States/Union Territories to follow the decision of the Punjab and Haryana High Court. Conclusion The Court, considering the consistent view of various High Courts and the Supreme Court, held that the petitioner is entitled to the issuance of C-Forms for natural gas purchased from Gujarat and used in manufacturing activities and electricity generation. The petitions were allowed in terms of the amended prayer clauses (cc1) and (cc2), declaring the petitioner's eligibility to issue C-Forms and directing the respondents to issue the same. Rule was made absolute with no costs. In Writ Petition No. 2923 of 2019, the Court noted that the issues were covered by the decision in Writ Petition No. 932 of 2018 and the Supreme Court's ruling in The Ramco Cements Ltd., thereby allowing the petition in terms of prayer clause (a) and making the rule absolute with no costs.
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