2023 (4) TMI 1191 - HC - VAT and Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT - The issue involved in this writ petition is squarely covered by a decision of this Court in 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 wherein the identical issue was considered and 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. 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. Petition allowed.

Summary

Issues involved:
The issues involved in the judgment are related to the entitlement to 'C' Forms for the purchase of High Speed Diesel from suppliers outside Tamil Nadu to avail concessional tax benefits, and the challenge to the decision in the case of M/s. Ramco Cements Ltd regarding the liability to pay tax on the purchase of goods under the Central Sales Tax Act.

Entitlement to 'C' Forms for Purchase of High Speed Diesel:
The writ petition addressed the difficulty faced by dealers in obtaining 'C' forms under the Central Sales Tax Act to avail concessional tax benefits for purchasing High Speed Diesel from suppliers in other states. The court referred to a decision in a batch of over fifty writ petitions, where it was held that the benefit of the concessional rate is available to dealers who purchase High Speed Diesel from neighboring states through inter-state sales. The court emphasized that this benefit applies to all dealers seeking it, in accordance with the law, and not limited to those party to a specific decision.

Challenge to Decision in the Case of M/s. Ramco Cements Ltd:
The State proposed to challenge the decision in the case of M/s. Ramco Cements Ltd, which was dismissed by a Division Bench of the High Court. The Division Bench rejected the contention that dealers had lost their entitlement to be registered under the CST Act, emphasizing that the liability to pay tax on the purchase of goods is an independent liability of the purchasing dealer. The court confirmed that dealers can continue to have registration under the CST Act, even if they are not selling the restricted six items under the Act.

Confirmation by Three-Judge Bench of the Apex Court:
The order of the Division Bench was confirmed by a three-Judge Bench of the Apex Court, where it was upheld that the consistent view of nine High Courts, including the decision of the High Court of Madras, was a possible view. The Apex Court declined to interfere in the special leave petitions, noting that the Union of India had also acted upon a similar decision by issuing an Office Memorandum directing all states to follow the view taken by the Punjab and Haryana High Court.

Conclusion:
In conclusion, the writ petition was allowed, and no costs were imposed. The State of Tamil Nadu issued a letter in line with the orders passed in the special leave petitions. The judgment emphasized the entitlement of dealers to 'C' Forms for purchasing High Speed Diesel and clarified the independent liability of purchasing dealers under the Central Sales Tax Act. The decisions of the High Court and the Apex Court upheld the rights of dealers to registration under the CST Act, irrespective of selling specific commodities.