2021 (1) TMI 1056 - HC - VAT and Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - respondent fairly submits that the issue involved in this Writ Petition is squarely covered by a decision of this Court in the case of M/s. Dhandapani Cement Private Limited Vs. The State of Tamil Nadu, 2019 (2) TMI 1850 - MADRAS HIGH COURT wherein on identical issue it was held that 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. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) 2018 (10) TMI 1529 - MADRAS HIGH COURT Ltd can be extended only to those dealers in 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. HELD THAT - The State has, after the date of the above order, filed a Writ Appeal challenging the decision in the case of Ramco Cements that has been considered and dismissed by a Division Bench of this Court 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 and it was 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. Petition allowed.

Summary

Issues Involved:
1. Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers in other states under the Central Sales Tax Act, 1956.
2. Applicability of a decision regarding concessional rate of tax for inter-state sales of High Speed Diesel.
3. Challenge to the decision in Writ Appeal regarding registration under the CST Act.
4. Rights of purchasing dealers under the CST Act post-amendment in 2017.

Issue 1: Entitlement to 'C' Forms for purchase of High Speed Diesel:
The petitioners faced difficulty in obtaining 'C' forms under the Central Sales Tax Act, 1956 to avail concessional tax benefits for purchasing High Speed Diesel from suppliers in other states. The issue was previously addressed in a decision involving M/s. Ramco Cements Ltd., where the court ruled in favor of the dealers' entitlement to 'C' Forms for such purchases. The State intended to challenge this decision, but until then, all Assessing Authorities in Tamil Nadu were directed to apply the rationale of the decision to pending assessments. The court emphasized that the benefit of the decision should be extended to all dealers seeking it, not limited to those party to the specific case.

Issue 2: Applicability of decision on concessional rate of tax for inter-state sales:
The court referred to previous judgments, including one by the Punjab and Haryana High Court confirmed by the Supreme Court, supporting the availability of concessional rates for dealers purchasing High Speed Diesel from neighboring states through inter-state sales. The court held that the decision was applicable to all dealers seeking the benefit, in line with the law. The State's intention to challenge the decision was noted, but until then, the Assessing Authorities were directed to follow the court's decision for all pending assessments.

Issue 3: Challenge to the decision in Writ Appeal regarding registration under the CST Act:
A Writ Appeal was filed by the State challenging the decision in the case of Ramco Cements Ltd., but it was dismissed by a Division Bench of the High Court. The court emphasized that the liability to pay tax on the purchase of goods was an independent obligation of the purchasing dealer, separate from the liability of the seller under the CST Act. The court rejected the contention that dealers had lost their entitlement to registration under the Act, emphasizing that even purchasing dealers could secure registration under the CST Act.

Issue 4: Rights of purchasing dealers post-amendment in 2017:
Post-amendment in 2017, the definition of 'goods' under the CST Act was restricted to six specified commodities, but the rights of purchasing dealers, including the right to purchase at a concessional rate using 'C' Forms, remained unaffected. The court emphasized that the CST Act's applicability for purchasing dealers continued, and any attempt to restrict this right would be against the freedom of trade enshrined in the Constitution. The court dismissed the Revenue's contentions, stating that the rights of purchasing dealers, including those in industries like Cement, could not be denied, as it would violate constitutional provisions.

This detailed analysis of the judgment provides insights into the issues addressed by the court regarding the entitlement to 'C' Forms, the applicability of previous decisions, challenges to the decisions in Writ Appeal, and the rights of purchasing dealers under the CST Act post-amendment in 2017.