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TMI Blog2018 (5) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... ade and used by it in the course of manufacturing of cement, after the promulgation of the Central Goods and Services Tax Act, 2017 with effect from 1-7-2017. 2. According to the petitioner, it is a Company registered under the provisions of the Central Sales Tax Act, 1956 (for short, 'the CST Act, 1956') read with the Central Sales Tax (Registration and Turnover) Rules, 1957 (for short, 'the Rules of 1957') and its certificate of registration is valid as on the present date. The petitioner Company is engaged in mining activity of limestone which is used for manufacturing of cement and for which High Speed Diesel is used. The petitioner Company was permitted to purchase goods in the course of inter-State trade at the rates specified in Section 8(1) of the CST Act, 1956. The petitioner was also having registration certificate under the provisions of the Chhattisgarh Value Added Tax Act, 2005 and with the introduction of the Central Goods and Services Tax Act, 2017 (for short, the CGST Act, 2017), the petitioner has also been registered under the CGST Act, 2017 with effect from 1-7-2017. It is the case of the petitioner that the respondent Department had been issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Rules of 1957. It has further been stated that the petitioner has not availed the facility of C-Form so far as High Speed Diesel is concerned, till 30-6-2017, therefore, the petitioner Company cannot be permitted to use the facility of C-Form after coming into force of the CGST Act, 2017 as such, the petitioner has rightly been denied the privilege of C-Form under the CST Act, 1956 read with the Rules of 1957. 5. Mr. Ramit Mehta, learned counsel appearing for the petitioner, would submit that the petitioner is still having the valid registration certificate issued under the CST Act, 1956 read with the Rules of 1957 and the said certificate of registration by which he is entitled to have the privilege of C-Form, has neither been amended nor cancelled by virtue of the provisions contained in Rule 9(1) of the Rules of 1957. He would further submit that the definition of Section 2(d) of the CST Act, 1956 has been amended and High Speed Diesel has also been brought specifically within the definition of "goods" under the CST Act, 1956. Likewise, Section 9(2) of the CGST Act, 2017 clearly provides that the GST on the supply of high speed diesel, including other five goods, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er machineries used in manufacture of clinker and cement etc.. Therefore, the petitioner is otherwise also not entitled for issuance of C-Form as he does not fulfill the criteria under Section 8(3)(b) of the CST Act, 1956 and as such, issuance of C-Form to the petitioner is not permissible and the writ petition is liable to be dismissed. He would finally submit that after coming into force of the CGST Act, 2017, the petitioner has not filed any return under the CST Act, 1956, as such, the writ petition deserves to be dismissed. 7. In rejoinder submission, Mr. Mehta would submit that the CST Act, 1956 and the Rules of 1957 have not been repealed and the petitioner is still holding valid certificate of registration under the CST Act, 1956 and the Rules made thereunder and as such, the petitioner's registration certificate granted under the CST Act, 1956 cannot be held to be cancelled automatically unless the procedure prescribed under Section 7(3)(b) of the CST Act, 1956 read with Rule 9 of the Rules of 1957 is followed for cancellation of registration which has not been done in the present case. There is no enabling provision in the CGST Act, 2017 for automatic cancellation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such goods inside the appropriate State under the Sales Tax Law of that State. 12. Under Section 7(1) of the CST Act, 1956, every dealer, who is liable to pay tax under the CST Act, 1956, should make an application for registration under the Act, to such authority in the appropriate State, as the Central Government may specify. The certificate of registration so issued is liable to be cancelled under sub-section (4) (b) of Section 7, if the dealer fails to pay any tax or penalty payable under the CST Act, 1956. 13. Sub-section (1) of Section 8 of the CST Act, 1956 carves out an exception. If the sale is to a registered dealer and if the sale is of the goods described in sub-section (3), the dealer need not pay tax at the rate prescribed by the local Sales Tax Law of the State in terms of sub-section (2). It is enough if such a person pays only 2%. Under sub-section (4) of Section 8, the dealer is obliged to furnish to the prescribed authority, a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority. Thus, sub-section (1) of Section 8 of the CST Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fix. Such indemnity bond shall be furnished by the selling dealer to the notified authority of his State if a duly completed form of declaration received by him is lost, whether such loss occurs while it is in his custody or while it is in transit to the notified authority of his State. Provided that where more than one form of declaration is lost, the purchasing dealer or the selling dealer, as the case may be, may furnish one such indemnity bond to cover all the forms of declarations so lost. (3) Where a declaration form furnished by the dealer purchasing the goods or the certificate furnished by the Government has been lost, the dealer selling the goods, may demand from the dealer who purchased the goods or, as the case may be, from the Government, which purchased the goods, a duplicate of such form or certificate, and the same shall be furnished with the following declaration recorded in red ink and signed by the dealer or authorised officer or the Government, as the case may be, on all the three portions of such form or certificate,- "I hereby declare that this is the duplicate of the declaration form/certificate No.......................signed on...............and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CST. If the declaration C Form is not provided to the sellers of other States, this will lead to increase in the cost of goods being purchased. 19. At this stage, it would be appropriate to notice the definition of Section 2(d) contained in the CST Act, 1956 (as it originally stood) which provides as under: - "(d) "goods" includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities;" 20. This definition of "goods" contained in Section 2(d) of the CST Act, 1956 suffered amendment in the Taxation Laws (Amendment) Act, 2017 published in the Gazette of India on 5-5-2017. The amended definition of "goods" states as under: - "(d) "Goods" means- (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natural gas; (v) aviation turbine fuel; and (vi) alcoholic liquor for human consumption" 21. Thus, the amended definition of goods under the CST Act, 1956 includes high speed diesel and by virtue of the said amendment, the definition of "goods" given under the CST Act stands amended whereby high speed diesel was kep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Acts) are hereby repealed. xxx xxx xxx xxx xxx xxx xxx xxx xxx" 24. The aforesaid provision of the CGST Act, 2017 contains a provision pertaining to repeal and saving. It is pertinent to notice that Section 174 of the CGST Act, 2017 does not include the CST Act, 1956 for the purpose of repealing and as such, the operation of the CST Act, 1956 is kept intact even after the enactment of the CGST Act, 2017 with effect from 1-7-2017. 25. Likewise, the Chhattisgarh GST Act, 2017 also makes a provision for repeal and saving. Section 174(1) of the Chhattisgarh GST Act, 2017 provides as under: - "174. Repeal and saving.-(1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, (a) (i) the Chhattisgarh Value Added Tax Act, 2005 (2 of 2005) shall apply only in respect of goods included in the Entry 54 of the State List of the Seventh Schedule to the Constitution. (b) (i) the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (52 of 1976); (ii) the Chhattisgarh Hotel Tatha Vas Grihon Me Vilas Vastuon Par Kar Adhiniyam, 1988 (13 of 1988); and (iii) the Chhattisgarh Entertainments Duty and Advertisements Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Act, 2017 has kept the aforesaid six goods away from the ambit of the CGST Act, 2017 and no notification has been issued by the Central Government on the recommendation of the GST Council imposing GST on high speed diesel at a prescribed rate. 31. Thus, the net effect of the aforesaid discussion is that after the promulgation of the CGST Act, 2017 and the State Act, the items mentioned in the amended Entry 54 of the State List of the Seventh Schedule to the Constitution are governed by the CST Act, 1956, as no notification has been issued even under Section 9(2) of the CGST Act, 2017 by the Central Government or by the State Government under Section 9(2) of the Chhattisgarh GST Act, 2017, on the recommendation of the GST Council, therefore, the inter- State trade of high speed diesel would be governed by the CST Act, 1956 and the petitioner is entitled to make inter-State purchases of high speed diesel from other States as before and his registration certificate under the CST Act, 1956 and the rules made thereunder still holds the field and is valid. 32. A Division Bench of the Punjab and Haryana High Court in the matter of Carpo Power Limited v. State of Haryana and others CW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , recommendation of the GST Council would be necessary to be notified by the Central Government, neither the GST Council has recommended levy of GST on high speed diesel nor it has been notified by the Central Government particularly when prior to introduction of GST with effect from 1-7-2017, the competent legislature has already amended the definition of "goods" under Section 2(d) of the CST Act, 1956 and purposefully amended the definition of "goods" mentioning the same items which are barred under Section 9(2) of the CGST Act, 2017 whereby high speed diesel is included. 37. Next submission of the learned State counsel is that after introduction and promulgation of GST, the registration certificate of the petitioner issued under the provisions of the CST Act, 1956 and the rules made thereunder would automatically stand cancelled after his migration to the GST regime, has no legs to stand. The registration certificate issued under the CST Act, 1956 can be cancelled only after the initiation of proceeding as prescribed under Section 7(4)(b) of the CST Act, 1956 read with Rule 9 of the Rules of 1957 and the proceeding of cancellation has neither been initiated nor the petitioner&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having been migrated to the GST regime with effect from 1-7-2017, as the definition of goods as defined in Section 2(d) of the CST Act, 1956 has been amended prior to coming into force of the CGST Act, 2017 from 1-7-2017 which includes high speed diesel. Further, under Section 9(2) of the CGST Act, 2017, the GST Council has not made any recommendation for bringing high speed diesel within the ambit of the CGST Act, 2017 and therefore the Central Government has not notified high speed diesel to be within the ambit and sweep of the CGST Act, 2017. Thus, the petitioner's registration certificate under the CST Act, 1956 is still valid for the goods defined in Section 2(d) of the CST Act, 1956, including high speed diesel, and the petitioner is entitled for issuance of C-Form for inter-State purchase / sale of high speed diesel against the said C-Form. Accordingly, the respondents shall be liable and are directed to issue C-Form to the petitioner in respect of high speed diesel to be purchased by the petitioner and used in the course of manufacture of cement and for that, it is further directed to rectify and remove the error on their official website and entertain the petitioner&# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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