2021 (9) TMI 264 - HC - VAT and Sales Tax

Seeking grant of interim relief - levy of GST on High Speed Diesel Oil - C- Form not issued - HELD THAT - Taking into consideration the fact that in case the C-Form is subsequently found to be wrongly issued or obtained then it is always within the power of the State to charge a higher rate of GST payable alongwith the penalty for which the petitioner shall always be exposed. Withholding the C-Form in any way will not serve any bodies purpose as the petition will take some time for final hearing. It is directed that the State shall issue C-Form to the petitioner which would be subject to the final adjudication of the entitlement of the petitioner's C-Form and if it is found that the petitioner were not entitled to get the C-Form, then in such case they shall be liable for the consequences of penalty and higher rate of GST and other measures which are provided under the law. List the case after six weeks.

Summary

Issues:
- Interpretation of CST Act, 1956 and GST regime regarding high speed diesel
- Entitlement of petitioner for issuance of C-Form for inter-State purchase/sale of high speed diesel
- Direction to State for issuance of C-Form subject to final adjudication
- Consequences if C-Form is wrongly issued or obtained

Analysis:
The judgment delivered by the Chhattisgarh High Court addresses the issue of the petitioner's entitlement to the issuance of a C-Form for inter-State purchase/sale of high speed diesel in the context of the CST Act, 1956 and the GST regime. The petitioner, a registered dealer under the CST Act, 1956, sought relief based on a previous judgment of the court and argued that they are using high speed diesel for steel manufacturing procured from Indian Oil. The court examined the relevant legal provisions and held that the petitioner's registration certificate under the CST Act, 1956 remains valid for high speed diesel despite the transition to the GST regime. The court emphasized that the GST Council had not recommended bringing high speed diesel under the CGST Act, 2017, thus affirming the petitioner's entitlement to the C-Form.

The court directed the respondents to issue the C-Form to the petitioner for the purchase of high speed diesel to be used in cement manufacturing. Additionally, the court instructed the authorities to rectify any errors on their official website and process the petitioner's application for the C-Form promptly. However, the judgment also highlighted that if the C-Form is later found to be wrongly issued or obtained, the State retains the authority to impose penalties and charge a higher rate of GST, subjecting the petitioner to legal consequences. The court emphasized that withholding the C-Form unnecessarily would not serve any purpose, as the final hearing of the petition would take time.

Consequently, the court directed the State to issue the C-Form to the petitioner, with the understanding that the final decision on the petitioner's entitlement to the C-Form would be determined later. If it is established that the petitioner was not entitled to the C-Form, they would be held accountable for penalties, higher GST rates, and other legal measures as provided by the law. The case was listed for further proceedings after six weeks to monitor compliance and any developments in the matter.