2020 (9) TMI 899 - HC - VAT and Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel - difficulty in obtaining C Forms - HELD THAT - The petitioner is entitled to the inclusion of High Speed Diesel Oil as a commodity in the registration certificate. Let this exercise be carried out within a period of four (4) weeks from date of uploading of this order. The request of the petitioner for issuance of C Forms is allowed as a consequence thereof. Petition allowed.

Summary

Issues:
1. Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu.
2. Applicability of High Court's decision in M/s. Ramco Cements Ltd. case to all pending assessments.
3. Challenge by the State against the decision in the Ramco Cements case.
4. Inclusion of 'High Speed Diesel Oil' as a commodity in the registration certificate.

Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu:
The Writ Petition concerns a dealer seeking 'C' Forms under the Central Sales Tax Act, 1956 for purchasing High Speed Diesel from suppliers in other states to avail concessional tax benefits. The issue was previously addressed in the case of M/s. Dhandapani Cement Private Limited Vs. The State of Tamil Nadu, where the High Court held in favor of the assessee. The benefit of concessional rates for inter-state sales of High Speed Diesel was affirmed by various courts, including the Supreme Court. The State intended to challenge the decision, but until then, all Assessing Authorities in Tamil Nadu were directed to apply the rationale of the decision to pending assessments.

Applicability of High Court's decision in M/s. Ramco Cements Ltd. case:
In the subsequent case of Ramco Cements Ltd., the High Court emphasized that the liability to pay tax on purchases is an independent obligation of the purchasing dealer under the CST Act. The court clarified that even dealers not liable to pay tax under the Act as sellers could obtain registration. The judgment highlighted that the rights of purchasing dealers, including obtaining goods at concessional rates, remain intact despite amendments to the definition of 'goods.' The court rejected the Revenue's contention that dealers lost their entitlement to registration under the CST Act, emphasizing the freedom of trade in inter-State commerce.

Challenge by the State against the decision in the Ramco Cements case:
Following the Ramco Cements case, the State filed a Writ Appeal challenging the decision, which was subsequently dismissed by a Division Bench. The Bench reiterated that dealers could maintain registration under the CST Act, rejecting the Revenue's arguments. The court emphasized that denying purchasing rights based on sales criteria would lead to unconstitutional classification under Article 14. The Writ Appeals were dismissed, directing the State not to restrict the use of 'C' Forms for inter-State purchases and quashing related circulars and proceedings.

Inclusion of 'High Speed Diesel Oil' as a commodity in the registration certificate:
The final aspect addresses the petitioner's request to include 'High Speed Diesel Oil' as a commodity in the registration certificate, which was granted based on the previous judgments. The petitioner's entitlement to 'C' Forms for this commodity was allowed, with instructions for necessary actions to be taken within a specified timeframe. The Writ Petition was allowed without costs, aligning with the decisions in related cases.

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