2021 (1) TMI 248 - HC - VAT / Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT - Revenue places reliance in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD., M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU, THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES, THE ASSISTANT COMMISSIONER (ST) , THE JOINT COMMISSIONER (ST) TERRITORIAL, THE DEPUTY COMMISSIONER (ST) 2019 (2) TMI 1850 - MADRAS HIGH COURT where it was held that The Petitioner in these Writ Petitions has stated on affidavit that it is unable to download the C forms from the websites as the same stand blocked from use. Upon enquiry with the Assessing Authorities, they have been informed that the benefit of the decision in M/s Ramco Cements Ltd can be extended only to those dealers that are party to the decision. This stand is unacceptable in so far as the decision of this Court as well as other High Courts, one of which has been confirmed by the Supreme Court, are decisions in rem, applicable to all dealers that seek benefit thereunder, of course, in accordance with law. The State has, after the date of the above order, in THE COMMISSIONER OF COMMERCIAL TAXES, CHEPAUK, CHENNAI, THE ADDITIONAL COMMISSIONER (CT) VERSUS THE RAMCO CEMENTS LTD. AND THE STATE TAX OFFICER, THE JOINT COMMISSIONER (CS) (SYSTEMS) VERSUS SUNDARAM FASTENERS LIMITED 2020 (3) TMI 450 - MADRAS HIGH COURT challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court has held that Appellant State and the Revenue Authorities are directed not to restrict the use of 'C' Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in 'C' Forms to such Dealers. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu. As on date, the order in Writ Appeal is final, and following the rationale thereof, this Writ Petition is allowed. 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 - petition allowed.

Summary

Issues:
Amendment of cause title in the petition, entitlement to 'C' Forms for concessional benefits, challenge to order by the State, registration under CST Act, rights of purchasing dealers, scope of CST Act post amendment, freedom of trade under GST regime, denial of right to purchase goods, classification under Article 14.

Amendment of Cause Title:
The learned counsel for the petitioner sought an amendment in the cause title, which was allowed by the court. The change was made in regard to the designation of R2 as Assistant Commissioner (ST), Hosur, South –II Assessment Circle, Hosur instead of The Assistant Commissioner (ST) Hosur South –I Assessment Circle, Hosur.

Entitlement to 'C' Forms for Concessional Benefits:
The court considered the issue of entitlement to 'C' Forms under the Central Sales Tax Act, 1956 for the purchase of High Speed Diesel from suppliers in other states. Referring to previous judgments, the court held that the benefit of concessional rates is available to dealers making interstate purchases. The court emphasized that the decision applies to all dealers seeking the benefit, not just those party to the specific case.

Challenge to Order by the State:
The State expressed its intention to challenge the court's decision through a Special Leave Petition. However, the court noted that the order in the Writ Appeal was final, and based on its rationale, the Writ Petition was allowed. The petitioner was granted the inclusion of 'High Speed Diesel Oil' as a commodity in the registration certificate.

Registration under CST Act and Rights of Purchasing Dealers:
The court clarified that the liability to pay tax on the purchase of goods is an independent obligation of the purchasing dealer under the CST Act. It emphasized that even dealers solely purchasing goods in interstate trade can secure registration under the Act. The judgment highlighted that the rights of purchasing dealers, including the right to purchase at concessional rates, remain intact.

Scope of CST Act Post Amendment and Freedom of Trade under GST Regime:
The court analyzed the amendments to the definition of 'goods' under the CST Act and affirmed that the rights of purchasing dealers to avail concessional rates against 'C' Forms continue unaffected. It emphasized that the GST regime does not impede the freedom of trade, including the right to purchase goods in interstate commerce. The court rejected contentions that sought to restrict the rights of purchasing dealers, emphasizing the importance of upholding Article 301 and Article 304(b).

Denial of Right to Purchase Goods and Classification under Article 14:
The court dismissed contentions that aimed to deny purchasing rights to certain industries, highlighting that such a denial would lead to an unconstitutional classification under Article 14. It emphasized that the right to purchase goods at concessional rates should be equally available to all eligible industries, including Cement Industries. The court upheld the views expressed by other High Courts and confirmed the decision of the learned Single Judge, dismissing the Writ Appeals filed by the State.