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TMI Blog2018 (4) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been issuing C Forms to the petitioner which were given to the Oil Companies in Gujarat who produced the same before the Gujarat tax authorities and were assessed at a reduced rate of tax - even after the implementation of the CGST Act, the items mentioned in amended entry 54 are governed by the CST Act. Further, a notification under Section 9 (2) of the HGST Act, 2017 not having been issued natural gas continues to be covered under the CST Act. The provisions of Section 8 of the CST Act, Rule 12 of CST (R T) Rules and declaration Form C have not undergone any amendment after the implementation of the GST laws. There cannot be any occasion to restrict the usage of C Form only for the purposes of re-sale of the six items mentioned in the amended definition of goods in Section 2 (d) of the CST Act. The purchase of the said goods for purposes of re-sale, use in the manufacture or processing of goods for sale, in the tele-communications network or mining or in generation or distribution of electricity or any other form of power would qualify the purchaser for registration under Section 7 (2) of the CST Act. Section 7 (2) does not stipulate that only a dealer liable to pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in so far as it is relevant reads :- Form B Certificate of Registration [ See rule 5 (1)] TIN No. 06342708008 This is to certify that M/S CAPRO POWER LTD. whose principal place of business within the State of Haryana has been registered as a dealer under sections 7 (1) 7 (2) of the Central Sales Tax Act, 1956. The class (es) of goods specified for the purposes of sub-sections (1) and (3) of section 8 of the said Act is/are as follows and the sales of these goods in the course of inter-State trade to the dealer shall be taxable at the rate specified in that sub-section subject to the provisions of the sub-section (4) of the said section : (d) for use in the generation or distribution of electricity or any other form of power. 4. The issue involved in the present petition is whether after the amendment of the CST Act, the petitioner is entitled to be issued C' Forms in respect of the natural gas purchased by it in the course of inter-state sales and used by it for the generation of electricity. We have answered the question in the affirmative, in favour of the petitioner. 5. Before adverting to the issue involved, we quote the relevant provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the sale or purchase - ( a) occasions the movement of goods from one State to another; or ( b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1 - Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2 - Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State. 6. Liability to tax on inter-State sales - Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods which, in accordance with the provisions of sub-section (3) of section 5 is a sale in the course of export of those goods out of the territory of India. ( 1) Subject to the other provisions contained in this Act, every dealer shall, with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) or with the provisions of sub-section (3C) or sub- section (3E) or has failed to pay any tax or penalty payable under this Act, or in the case of a dealer registered under sub-section (2) has ceased to be liable to pay tax under the sales tax law of the appropriate State or for any other sufficient reason. 8. Rates of tax on sales in the course of inter- State trade or commerce.- ( 1) Every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in sub-section ( 3), shall be liable to pay tax under this Act, which shall be three percent, of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower: Provided that the Central Government may, by notification in the Official Gazette, reduce the rate of tax under this sub-section. ( 2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within subsection (1), shall be at the rate applicable to the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or penalty payable by such a dealer under this Act is a tax or interest or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly: Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, be rules made in this behalf make necessary provision for all or any of the matter specified in this sub-section. 13. Power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RULES, 1957 FORM C' FORM OF DECLARATION [ Rule 12 (1)] Name of issuing State Officer of issue Date of issue Name of the purchasing dealer to whom issued alongwith his Registration Certificate No..... Date from which registration is valid Seal of the Issuing Authority Serial No. .............. To * ( Seller) Certified that the goods ** Ordered for in our purchase Order No. .......................... dated ................ and supplied as per Bill/Cash Memo/Challan No.............. dated .................................. as stated below* purchased from you as per Bill/Cash Memo Challan No......................... dated ................................. are for resale.....use in manufacture/processing of goods for sale..... use in mining.... use in generation/distribution of power.....Packing of goods for sale/re-sale and are covered by my/our registration certificate No................ dated ...... issued under the Central Sales Tax Act,1956. It is further certified that I/ We am/are not registered under Section 7 of the said Act in the State of ......................... in which the goods Covered by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Schedule I, made or agreed to be made without a consideration; and ( d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. 9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the Haryana Goods and Services Tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty percent, as may be notified by the Government on the recommendations of the Council and collected in such manner, as may be prescribed and shall be paid by the taxable person. ( 2) The State tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, shall be levied with effect from such date, as may be notified by the Government on the recommendations of the Council. 174. (1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, ( i) the Haryana Value Added Tax Act, 2003 (6 of 2003), except in respect of goods included in the Entry 54 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of goods commenced. Under Section 9 (2) the authorities empowered to re-assess, collect and enforce payment of tax under the general sales tax law of the appropriate State are to do so even on behalf of the Government of India with respect to the tax due under the CST Act. 10. As per Section 7 (1) of the CST Act, every dealer who was liable to pay tax under the CST Act was required to make an application for registration under the CST Act. The petitioner does not sell natural gas. Nor does it sell electrical energy outside the State of Haryana. It is therefore not liable to pay tax under the CST Act. However, under section 7 (2), a dealer though not liable to pay tax under the CST Act but liable to pay tax under the sales tax law of the appropriate State or where there was no such law in force in the appropriate State or any part thereof any dealer having a place of business in that State could apply for registration under the CST Act. A dealer registered under Section 7 was termed as a registered dealer for the purpose of the CST Act. The petitioner was admittedly registered under the CST Act and was therefore a registered dealer within the meaning of the expression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered dealer in the State of Haryana. The Haryana authorities had been issuing C Forms to the petitioner which were given to the Oil Companies in Gujarat who produced the same before the Gujarat tax authorities and were assessed at a reduced rate of tax. This continued till the implementation of the Goods Service Tax. The question is whether the petitioner continues to be entitled to the C' Forms after the CGST Act, 2017. We think it is. 15. Entry 54 of the State List of the Seventh Schedule to the Constitution of India as amended by the Constitution (One Hundred and First Amendment) Act, 2016, reads as under :- 54. Taxes on the sale of petroleum, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter-State trade of commerce or sale in the course of international trade or commerce of such goods. 16. After implementation of the GST Act with effect from 01.07.2017, the definition of goods under the CST Act was amended. The amended definition of goods now covers only six items. What is important is that natural gas is one o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. As Mr. Ankur Saigal, the learned counsel appearing on behalf of the petitioner rightly submitted, the contention proceeds on the erroneous basis that only a dealer registered under the HVAT Act is covered by section 7 (2). The plain language of section 7 (2) does not contain such a limitation. The petitioner is not liable to pay tax under the CST Act but it is liable to pay tax under the HGST Act, 2017 as it sells electricity within Haryana. Under Section 7 (2) of the CST Act which applies to the petitioner, a dealer liable to pay tax under the sales tax law of the appropriate State may apply for registration notwithstanding that he is not liable to pay tax under the CST Act. Sales tax laws have been defined under Section 2 (i) of the CST Act to mean the law for the time being in force in any State for levy of taxes on the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf and includes value added tax laws. The definition is inclusive in nature. It is not restricted to any particular sales tax enactment. The HGST Act is also a law in force in the State of Haryana for levy of taxes of sale and purchase of goods. The HGST Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements of Section 7 (2) of the CST Act. It is liable to pay tax in the State of Haryana under the HGST Act. Even though there is no liability under the CST Act, yet it will be a registered dealer under Section 7 (2) of the CST Act. 25. Mrs. Talwar then contended that the petitioner is not engaged in the business of re-selling the natural gas and is, therefore, not entitled to be issued C Forms. The basis of the argument is that after the CGST Act came into force, the petitioner was not liable to pay any tax on electricity under the HVAT Act and it, therefore, ceases to be a registered dealer as per Section 7 (2) of the CST Act. Mrs. Talwar contended that the petitioner's registration under the CST Act lapsed on the commencement of the HGST Act and it ceased to have any effect. She contended that the petitioner does not sell within the State of Haryana or otherwise the same goods, namely natural gas, that it purchases from the Oil Companies in Gujarat. According to her, the provisions of the CST Act and in particular Sections 7 and 8 thereof would apply only if the petitioner sold the same goods that it purchased viz. natural gas. 26. The provisions of Section 8 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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