2021 (4) TMI 189 - HC - VAT and Sales Tax

Issuance of C forms - Concessional rate of tax - purchase of High Speed Diesel from suppliers in other States - HELD THAT - The issue is covered by a decision of this Court in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) 2018 (10) TMI 1529 - MADRAS HIGH COURT where it was held that The respondents are directed to permit these petitioners to download 'C ' forms, as has been done in the past for the purpose of purchasing petroleum products against the issuance of 'C' declaration forms. Petition allowed.

Summary

Issues Involved:
- Issuance of "C" forms under the Central Sales Tax Act, 1956 for the purchase of High Speed Diesel from suppliers in other States.

Analysis:
1. The petitioner sought the issuance of "C" forms under the Central Sales Tax Act, 1956 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 benefit of concessional rate for inter-state sales was confirmed. The court referred to similar decisions by other High Courts, including the Punjab and Haryana High Court and the Supreme Court, which upheld the benefit for dealers purchasing goods from neighboring states. The court emphasized that this benefit applies to all dealers seeking it, not just those party to the specific case.

2. The State intended to challenge the decision regarding the issuance of "C" forms, but until the decision was stayed or reversed, all Assessing Authorities in Tamil Nadu were required to apply the rationale of the court's decision to pending assessments. The court found the State's stance, limiting the benefit to specific dealers, unacceptable as the decision applied universally to all eligible dealers. Consequently, the writ petitions were allowed, directing necessary action by the department without costs.

3. A subsequent Writ Appeal by the State challenging the earlier decision was dismissed by a Division Bench. The court clarified that the liability to pay tax on purchases under the CST Act is independent of the seller's liability, allowing purchasing dealers to obtain registration under Section 7(2) of the Act. The court rejected the Revenue's contention that dealers lost their entitlement to registration, emphasizing the continued rights of purchasing dealers under the Act.

4. The Supreme Court dismissed Special Leave Petitions filed by the Commercial Taxes Department challenging the High Court's decision in the case of M/s Ramco Cements Ltd. The three-Judge Bench upheld the High Court's judgment, affirming the rights of dealers to purchase goods at a concessional rate under the CST Act. Consequently, the writ petition was allowed without costs.

This detailed analysis outlines the legal journey regarding the issuance of "C" forms under the Central Sales Tax Act, emphasizing the rights of dealers to avail of concessional benefits for inter-state purchases, as established by various court decisions and ultimately upheld by the Supreme Court.