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TMI Blog2019 (3) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ealer so registered is liable to pay tax under the sales tax law of the State, which in the present case would be AVAT Act of 2003. Therefore, if according to the authorities in the State of Assam in the Taxation and Finance Department the petitioners are not liable to pay any tax under the AVAT Act of 2003, from 01.07.2017 onwards, the authorities may withdraw the registration under Section 7(2) of the CST Act of 1956, inasmuch as, the pre-requisite of Section 7(2) of being liable to pay tax under the state sales tax law ceases to exist. The provisions of the AGST Act of 2017 in respect of the definition of the word ‘goods’ and Section 9(2) thereof, are pari materia with that of the definition of the word ‘goods’ under Section 2(52) and Section 9(2) of the CGST Act of 2017, respectively - the provisions of CST Act of 1956 as regards the six retained goods as indicated above continues to have its force and had not been repealed by the GST Act of 2017. In view of the provisions of Section 12(5) of the Constitution (One Hundred And First Amendment) Act, 2016 and 9(2) of the CGST Act of 2017, read with Section 9(2) of the AGST Act of 2017 and the admitted position of the respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 - - - Dated:- 4-9-2018 - MR ACHINTYA MALLA BUJOR BARUA, J. For The Petitioner : DR. ASHOK SARAF For The Respondent : MR. D SAIKIA(SR. ADDL. AG) JUDGMENT ORDER (CAV) Heard Dr. A. Saraf, learned senior counsel for the petitioners. Also heard Mr. D. Saikia, learned Senior Additional Advocate General for the authorities of the State of Assam in the department of Finance and Taxation as well as Mr. S.C. Keyal, learned ASGI for the authorities of the Govt. of India in the Ministry of Finance and Revenue and Ministry of Law and Legal Affairs, who were arrayed as respondents as per the order dated 13.03.2018, and also Mr. M.K. Choudury, learned senior counsel for the respondent Indian Oil Corporation Ltd (IOCL). 2. Both the writ petitions are based upon the same set of facts and also involve the same question of law and as such are being taken up together for its consideration. Both the petitioners i.e., in WP(C) No.366/2018 and WP(C) 915/2018 are engaged in the manufacture and sale of clinker for which diesel is used as a raw material. 3. In furtherance of their activities, the petitioners purchased diesel from the respondent IOCL from its establishme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use they were earlier liable to pay sales tax under the AVAT Act of 2003, but consequent upon the repeal of AVAT Act of 2003, w.e.f. 01.07.2017, the dealers not selling the aforesaid six goods are no more liable to pay tax under the Act of 2003 and, therefore, upon cessation of their liability under the AVAT Act of 2003, they are not eligible for registration under Section 7(2) of the CST Act of 1956 and the registration earlier granted to them under Section 7(2) became invalid. iv) Clause-5 thereof provides that such dealers who continue to make interstate sale of only the aforesaid six goods will continue to be liable to pay tax under the CST Act of 1956 and their registration under the Act continues to remain valid and they can also make their inter-state purchases of the aforesaid six goods against Form-C or Form-F, as the case may be. v) Clause-9 of the said Circular clarifies that the dealers who up to 30.06.2017 were making inter-state purchase of petroleum and high speed diesel (among the six retained goods) against Form-C for use in manufacture or processing of goods, other than the aforesaid six goods, having ceased to be dealers under the CST Act of 1956 w.e.f. 01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance and Taxation Department had restricted the meaning of the word goods appearing for the fourth time in Section 8(3) to have the same meaning as defined in Section 2(d). 9. Dr. A. Saraf, learned senior counsel submits that even after the amendment of the CST Act of 1956 and the AVAT Act of 2003 six goods namely crude petroleum, high speed diesel, petrol, natural gas, aviation turbine fuel and alcoholic liquor for human consumption were retained for being taxable under the CST Act of 1956 and AVAT Act of 2003. As the said six goods are retained as taxable under the said two Acts, any dealer who intends to purchase any of the said six goods are entitled to be registered or to retain their registration under Section 7(2) of the CST Act of 1956. Dr. A. Saraf, learned senior counsel also submits that the effect of the Circular dated 05.09.2017 declaring and clarifying that a dealer who purchases any of the six goods for interstate sale, uses them for the manufacture of a good other than the six goods, would cease to be a dealer under the CST Act, 1956 would be that the authorities while issuing the Circular have the word goods appearing for the fourth time in section 8(3) of CS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso refers to the provisions of section 105 of the AVAT Act of 2003 which provides that if any question arises other than in a proceeding pending before the appellate authority or an appellate tribunal or a court, as to whether or not any particular dealer is required to obtain registration, the Commissioner for reasons to be recorded in writing pass such order thereon, as he thinks just and proper. According to Mr. D. Saikia the Circular dated 05.09.2017 was also issued by the Commissioner in exercise of his powers under Section 105(1) of the AVAT Act of 2003, on the question as to whether a dealer in the aforesaid circumstance is required to have a registration. Mr. D. Saikia submits that upon the registration of the petitioners as dealers under the CST Act of 1956 having ceased to have its effect as provided in the Circular dated 05.09.2017, they would now be liable to pay tax under the AVAT of Act 2003 in respect of any purchase of the six aforesaid goods, even if such purchases were made in course of interstate sale, but resulted in being used as a raw material for manufacturing of a good other than the six goods. 12. Mr. Saikia, also submits that the provisions laid down b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y projected in Clause-9 of the circular dated 05.09.2017 that the registration under Section 7(2) of the CST Act of 1956 ceases to exist as the dealer is no longer liable to tax under the AVAT Act of 2003 is correct,, the withdrawal of the registration under Section 7(2) of the CST Act of 1956 would be acceptable. In other words, if it is the conclusion of the authorities in the Govt. of Assam in the Taxation and Finance Department that from 01.07.2017, the petitioners are not liable to pay taxes under the AVAT Act of 2003, in such event, their registration under Section 7(2) of the CST Act of 1956 would also not be sustainable inasmuch as, under Section 7(2) of the Act any dealer liable to pay tax under the Sales Tax Law of the State, may, notwithstanding that he is not liable to pay tax under the Act, apply for registration. The pre-requisite of being entitled for a registration under Section 7(2) of the CST Act of 1956 is that the dealer so registered is liable to pay tax under the sales tax law of the State, which in the present case would be AVAT Act of 2003. Therefore, if according to the authorities in the State of Assam in the Taxation and Finance Department the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the definition of goods under Section 2(52) of the CGST Act of 2017 it is apparent that all kinds of movable property other than money and securities are taxable under the said Act, which apparently, going only by the definition of Section 2(52) would also include the six goods that have been retained under Section 2(h) of the CST Act of 1956. 22. But again Sections 9(2) of the CSGT Act of 2017 and the Assam Goods and Services Act, 2017 (in short AGST Act, 2017) provides as follows:- Section 9(2) of the CGST Act of 2017:- ( 2) The central 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 recommendation of the Council. Section 9(2) of AGST Act of 2017:- ( 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. 23. The provisions of the AGST Act of 2017 in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods, we are unable to accept with the contention of the learned Senior Additional Adovate General that upon withdrawal of the registration of the petitioners under Section 7(2) of the CST Act of 1956, they would now be subjected to a levy of tax under the GST Acts of 2017. 27. As regards the other alternative contention of learned Senior Additional Advocate General that upon withdrawal of such registration under Section 7(2) of the CST Act of 1956 the petitioners would now be liable to pay tax under the AVAT Act of 2003, it is taken note of that under Section 174(1) of the AGST Act of 2017, the provisions of AVAT Act of 2003 in respect of the six aforementioned goods are retained. In other words, in respect of the six aforementioned goods retained under Section 2(d) of the CST Act of 1956 and also included under Entry 54 of the State List of the Seven Schedule of the Constitution of India , the provisions of the AVAT Act of 2003 still continues to have its force and the concerned goods are leviable to a tax under the Act. Further upon perusal of the provision of the AVAT Act of 2003, no such provision in discernable, which provides that upon the six retained goods being used as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified either by the Central Government and the State Government under Section 9(2) of the CGST Act of 2017 and AGST Act of 2017, respectively and there being no date recommended by the Goods and Services Tax Council, as required under Section 12(5) of the Constitution (One Hundred and First Amendment) Act, 2016 and also there being no such provision in the AVAT Act of 2003 that in the event any of the six retained goods are used for manufacture of a good other than the six goods, then no tax is leviable under the AVAT Act of 2003, the provisions in the circular dated 05.09.2017 that from 01.07.2017 onwards, the dealers dealing interstate purchase of high speed diesel and using it for manufacture of a good other than the six good are no longer liable to pay a tax under the AVAT Act of 2003 is incorrect and unacceptable. 33. As the very basis for withdrawing the registration under section 7(2) of the CST Act of 1956 is that from 01.07.2017 onwards the dealers dealing in interstate purchase of high speed diesel oil and using in for manufacture of good other than the six goods are not liable to pay a tax under the AVAT Act of 2003 and as discussed hereinabove, the very basis of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( c) any particular dealer is required to obtain registration; or ( d) any particular goods purchased or sold by a registered dealer are covered by his certificate of registration; or ( e) any tax is payable in respect of any particular sale or purchase and, if so, the point at which tax is leviable and the rate thereof; or ( f) any goods is taxable and, if taxable, the point at which and the schedule under which it is taxable and the rate thereof; or ( g) any goods or classes of goods should be specified in the certificate of registration issued under this Act; or ( h) any transaction, contract or agreement or arrangement is works contract or an operating lease; or ( i) any particular thing done to any goods amounts to or results in the manufacture of goods within the meaning of that term; or ( j) any set-off can be claimed on any particular transaction of purchase and if it can be claimed, what are the conditions and restrictions subject to which such set-off can be claimed, the Commissioner shall make an order determining such question: Provided that, before giving such decision, the Commissioner may, in his discretio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2003 to be inapplicable in respect of those dealers who purchases the six goods included in Entry 54 of the State list of the 7th Schedule to the Constitution of India and retained under Section 2(h) of the CST Act of 1956 and uses it for manufacturing a good other than the six goods. 39. By virtue of Section 174(1) of the AGST Act of 2017, the applicability of the AVAT Act of 2003 in respect of the six goods mentioned in Entry 54 of the State list under the 7th Schedule of the Constitution of India had been retained. In other words, it is a statutory provision that for purchase of any of the six goods, taxes leviable under the AVAT Act of 2003 would be applicable. 40. In the circumstance, the Commissioner by exercising his jurisdiction under Section 3(5)(b) of the AVAT Act of 2003 seeks to take away the aforesaid six goods from being subjected to a levy of taxes under the AVAT Act of 2003. In other words, the Commissioner by exercising a power to issue orders, instructions, directions for proper administration of the Act, had withdrawn a statutory provision, providing for a particular kind of dealer to be leviable under the AVAT Act of 2003, which accordingly would be impe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Circular dated 05.09.2017. 47. Accordingly, the contention raised that the Commissioner of Taxes, Assam did not have the jurisdiction to issue the Circular dated 05.09.2017 is answered in favour of the petitioner. 48. Clause 9 of the Circular dated 05.09.2017 also provides a clarification that the dealers making inter-state purchase, amongst others, of high speed diesel against Form C and using it for manufacture or processing of goods other than the six aforementioned goods would cease to be dealers under the CST Act of 1956 w.e.f. 01.07.2017 as their liability to pay taxes under the repealed Act of AVAT Act of 2003 had ceased w.e.f. 01.07.2017. The said clarification perhaps is an indication that such category of dealers who makes purchase of any of the six goods and uses it for manufacture of a good other than the six goods would not be covered by Section 8(3)(b) of the CST Act of 1956 and, therefore, would not be entitled to the benefit of paying CST @ 2% as provided under Section 8(1). If that is the purport of the provisions of the Circular dated 05.09.2017, the same cannot be a reason to provide that such dealers who purchases the six goods for inter-state sale an ..... 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