TMI Blog2024 (4) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... to a conclusion on a combined reading of Section 2 (52) and 9 (2) of the C.G.S.T. Act, the inter-state sale of natural gas continues to be governed under the C.S.T. Act. Thereafter, it was held that since Section 8 of the CST Act, the Rule 12 of the CST (R T) Rules and Form-'C' have not undergone any amendment, the Department cannot put any restriction on the usage of 'C' forms only in view of the amendment of definition of goods in the CST Act. In TATA STEEL LIMITED, JAMSHEDPUR AND OTHERS VERSUS STATE OF JHARKHAND AND OTHERS [ 2019 (9) TMI 524 - JHARKHAND HIGH COURT] , a prayer was sought to direct issuance of C-Forms with respect to an inter-state purchase. A Division Bench of the High Court of Jharkhand, made an exhaustive analysis on the aspect of issuance of these statutory forms in light of the increasing litigation for the grant and denial of the same. On a combined reading of the C.S.T Act, 1956 and the C.S.T. (Registration and Turnover) Rules, 1957, it was opined that the C-Forms have to be given to the registered dealer when the goods in respect of which the C-Form is used, are included in the registration certificate; when necessary, application amount is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os. 2 and 4 are directed to forthwith process the refund claim of the Petitioner for the years 2017-18 and 2018-19 based on statutory C-Forms of the Petitioner and upon scrutinising the genuineness of C-Forms in accordance with law and pass appropriate orders on merits within a period of four weeks of the receipt of a copy of this Order - Petition allowed. - HONOURABLE SRI JUSTICE U. DURGA PRASAD RAO AND HONOURABLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA For the Petitioners : Sri A Sarveswar Rao For the Respondents : GP for Commercial Tax Sri D.S. Sivadarshan ORDER (PER HONOURABLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA) This Writ Petition is filed under Article 226 of Constitution of India with the following prayer: .... to issue a writ or order or direction more particularly in the nature of a WRIT of MANDAMUS declaring that a) the Endorsements in Ref. R1. 97/2021, Dt. 21-08-2021 (Ex. P-1) and in Ref. R1. 98/2021, Dt. 21-08-2021 (Ex. P-2), passed by Respondent No. 2, under the Central Sales Tax Act, 1957, hereinafter referred to as the Act, as illegal, arbitrary, contrary to the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected @ 14.5% was remitted to the Department. Thereafter, Petitioner filed a refund claim before Respondent No. 2- the Deputy Commissioner, Commercial Tax Department, who in turn disposed of the refund claim, with certain directions as to submitting the C-Forms through Respondent No. 3 and to then claim the refund. c. Petitioner again made correspondence with Respondent No. 3 requesting to file the C-Forms before the Authorities and to file refund applications. Petitioner is entitled to the refund and not Respondent No. 3, and any contrary view would be hit by the principles of unjust enrichment. To support this contention, reliance is placed on the decision of State of Madhya Pradesh v. Vyankatlal and others (1985) 2 SCC 544. d. Prior to introduction of the Goods and Services Tax [GST] regime, Petitioner was purchasing natural gas from Respondent No. 3 at Rajahmundry and it was an Inter-State trade. Statutory Forms-C were supplied by the Petitioner to Respondent No. 3, which were accepted by Respondent No. 3 and also the Tax Authorities in Andhra Pradesh. Due to the introduction of GST Act from 01. 07.2017, there has been a change in the definition of goods. On combined reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority through e-mails dated 12.06.2020 and 24.06.2020. Consequently Respondent No. 3 informed that they raised invoices @ 14.5% tax rate without support of C-Forms from the Petitioner and suggested the Petitioner to take up the issue with the Department. g. The excess tax charged by Respondent No. 3 in absence of the C-Forms by collecting full tax would be Rs. 22,58,24,410/- and the details of the same are tabulated hereunder: A. Pata Financial Year CST @ 14.5% charged by ONGC i.e., Respondent No. 3 Rs. Applicable CST @ 2% Rs. Excess tax charged collected by ONGC Rs. 2017-18 (July, 2017 to March, 2018) 28,90,16,682 3,98,64,370 24,91,52,312 2018-19 83,74,54,404 11,55,10,952 72,19,43,452 2019-20 (up to December, 2019) 58,50,80,042 9,51,18,137 48,99,61,905 Total 171,15,51,128 25,04,93,459 146,10,57,669 B. Vijaipur Financial Year CST @ 14.5% charged by ONGC i.e., Respondent No. 3 Rs. Applicable CST @ 2% Rs. Excess tax charged collected by ONGC Rs. 2018-19 20,14,10,437 2,77,80,750 17,36,29,687 2019-20 (up to September, 2019) 6,05,45,879 83,51,156 5,21,94,723 Total 26,19,56,316 3,61,31,906 22,58,24,410 h. Utilization of C-Forms have been assessed and accepted by the Commercial Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r either the seller or buyer, since he is not authorized officer, vide Rule 59 after implementation of GST Act from 01.07.2017. c. Respondent No. 3 being registered dealer on the rolls of Respondent No. 4, collected 14.5 % of tax from the Petitioner on interstate sales of gas, in absence of C-Forms, as per the request of the Petitioner to Respondent No. 3 that they are unable to file C-Forms after 01.07.2017. Petitioner has not paid tax to the Department, but paid it to the Respondent No. 3 i.e., the seller. In that view, Petitioner was advised to issue C-Forms to Respondent No. 3 and in turn Respondent No. 3 must issue a credit note to the Petitioner for adjustment of excess tax paid, if any, and after filing of C-Forms by Respondent No. 3, the concerned officer/Respondent No. 4 to arrive tax liability and then Respondent No. 3 can file application for refund to the concerned officer Respondent No. 4. d. Respondent No. 2 finally stated that they have issued endorsement as per Section 38(9) of AP VAT Act, 2005 read with Section 9(2) of CST Act, 1956 as refund to the unregistered tax payer is not applicable. The directions were given under the endorsement are by following the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Finance, Govt. of India, vide clarification dated 07.11.2017 has clarified that C-form cannot be issued for manufacturing GST goods. Similar clarification was also issued by the Commissioner of State Tax, Maharashtra. c. Therefore, due to lack of clarity and ambiguity prevailed during the transition period, Petitioner paid higher rate of CST for purchase of Natural gas, not only from the State of Andhra Pradesh but also from the dealers situated in other States. However, once the legal position has been settled in favour of the petitioner, 'C' Forms were submitted well before completion of the assessment of the 3rd Respondent for the year 2017-18. Similarly, 'C' forms were submitted to the suppliers situated in other States. Accordingly, as per the directions of the Honourable High Court of Gujarat vide order Dt. 01.12.2022, the petitioner got the refund of the excess CST of Rs 66.07 crore as per the Order (State Tax) Gujarat Dt. 20.12.2022. d. Respondent No. 2 is empowered to make assessment of the Respondent No. 3 and examine the eligibility of concessional rate of tax against 'C' Forms submitted by the petitioner and to grant consequential relief as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel for the petitioners that provisional credit notes have also been given to them by the respective oil companies. We make it clear that the provisional credit notes given to the petitioners shall be given effect to, or in any case in which the provisional credit notes have not been given, the required refund shall always be given to the petitioners. If the respective oil companies have made the deposit to the State exchequer, they shall also be entitled to claim the refund thereof. (Emphasis supplied) h. Petitioner further stated that Respondent No. 4 should have reopened the assessment for the year 2017-18 and should have passed necessary orders for the years 2018-19 and 2019-20 by considering the C-Forms already on record as huge amounts of refund were blocked. Arguments Advanced at the Bar 6. Heard Sri S. Ravi learned Senior Counsel representing Sri A. Sarveswara Rao learned counsel for the Petitioner, learned Government Pleader for Commercial Tax and Sri D.S. Sivadarshan, learned counsel for Respondent No. 3. Perused the Material on record. 7. Learned Senior counsel for the Petitioner in elaboration to the contents stated in the Writ Affidavit, would submit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession and that the Court may pass appropriate orders to enable the Petitioner to get the refund of the excess tax paid to the Department. 10. I.A. No. 2 of 2023 is filed praying to direct Respondent No. 3 to file a representation(s) under Rule 12(7) of the CST (R T) Rules before Respondent No. 4, seeking re-opening of the Assessments for the years 2017-18 and 2018-19, and consequently consider the C forms issued by the Petitioner for such years, which are already on the records of Respondent No. 4, in the assessment files, as per the provisions of Section 8(1) and 8(3) of the CST Act. Whereas, I.A. No. 3 of 2023 seeks to direct Respondent No. 4 to pass appropriate re-assessment orders for the years 2017-18 and 2018-19 by considering the C forms submitted by the Petitioner and to pass fresh orders by granting concessional rate of tax as per the provisions of Section 8(1) of the CST Act. 11. Learned Government Pleader for Commercial Tax would submit that it is for Respondent No. 3 to submit the C-Forms, as Assessment Order came to be passed and that the C-Forms filed by Respondent No. 3 were rejected. Learned Government Pleader further submits that, Petitioner is not a registered de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 3 % to 2% w.e.f. 01-06-2008. Therefore, vide the provision, a registered dealer shall be liable to pay tax under CST Act @ 2% of his turnover or at the rate applicable to sale or purchase of goods inside the appropriate State under the Sales Tax law of that State, whichever is lower. 16. Further, clause (b) of sub-section (3) of Section 8 specifies the goods mentioned in sub-Section (1) as goods of the class/classes that are specified in the registration certificate of the purchaser as being intended for re-sale by him or vide the rules framed by the Central Government, for the use by him in the manufacture or processing for sale of goods specified under Section 2(d). 17. From 01.07.2017, the G.S.T. regime came into force. Due to the advent of the GST, there has been an amendment to the definition of goods under the C.S.T. Act. Previously, Sec 2(d) of CST Act, which defined goods, read 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 securities. 18. Vide the Taxation Laws (Amendment) Act, 2017 (Act No. 18 OF 2017), the definition of goods under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale. A dealer liable to pay tax under the sales tax law of the appropriate State in respect of any goods would be covered by Section 7(2) of the Act. ****** 28. In these circumstances, the writ petition is allowed. It is held that the respondents are liable to issue C Forms in respect of the natural gas purchased by the petitioner from the Oil Companies in Gujarat and used in the generation or distribution of electricity at its power plants in Haryana. In the event of the petitioner having had to pay the oil companies any amount on account of the first respondent's wrongful refusal to issue C Forms the petitioner shall be entitled to refund and/or adjustment of the same from the concerned authorities who collected the excess tax through the oil companies or otherwise. The concerned authorities shall process such a claim within twelve weeks of the same being made by the petitioner in writing and the petitioner furnishing the requisite documents/form. (emphasis supplied) 20. In Tata Steel Ltd. v. State of Jharkhand, (referred supra), a prayer was sought to direct issuance of C-Forms with respect to an inter-state purchase. A Division Bench of the High Court of Jharkhand, made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any extraneous consideration taken by the State to deny the issuance of C-Form would amount to Wednesbury unreasonableness. 22. In State of Rajasthan v. ASI Industries Limited, (referred supra), a Division Bench of the Hon ble Rajasthan High Court, having referred to the decision rendered in Carpo Power Ltd., held that the denial of C-form was purely on exigencies with the G.S.T. regime, that compelled the Petitioner therein to migrate to the G.S.T. registration. 23. Further, in Shree Raipur Cement Plant v. State of Chhattisgarh (2018) 55 GSTR 306, a question as to the entitlement of C-Form post promulgation of the C.G.S.T. Act, 2017 was in issue before the High Court of Chhattisgarh. While reiterating the position laid down Carpo Power Ltd. (referred supra), held as follows; 39. On the basis of aforesaid analysis, it is held that the petitioner is a registered dealer under the provisions of the CST Act, 1956 read with the Rules of 1957 and his registration certificate under the CST Act, 1956 read with the Rules of 1957 continues to be valid for the purpose of inter-State sale and purchase of high speed diesel despite the petitioner having been migrated to the GST regime with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority of law. Thus, this court finds nothing to distinguish the case of the petitioners herein from that of the petitioner in the case of Carpo Power Limited v. State of Haryana [2018] 53 GSTR 24 (P H).. (emphasis supplied) 25. A Division Bench of the Orissa High Court in Tata Steel Ltd. v. State of Orissa [2019] 70 GSTR 99 (Orissa) on a survey of all the precedents of various Courts on this point, noted the circular issued on 01-11-2018 by the Ministry of Finance to the Commissioners of Commercial Tax of States/Union Territories to abide by the decision rendered in Carpo Power Limited, which was confirmed by the Hon ble Supreme Court. The relevant portion of the letter reads thus; 'Dated the 1st November, 2018. To : The Commissioner of Commercial Tax of all States/Union Territories. Subject : Regarding definition of goods in sub-section (3)(b) of section 8 of the Central Sales tax Act, 1956 and issuance of Form C. Sir/Madam, 1. I am directed to refer to OM dated November 7, 2017 (copy enclosed) regarding clarification of definition of goods in sub-section (3)(b) of section 8 of the Central Sales tax Act, 1956 and to say that Honourable Punjab and Haryana High Court has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed State of the purchasing dealer otherwise the purchasing dealer has to pay tax at a higher rate besides additional taxes on such sales effected within the State where selling dealer is situated. (emphasis supplied) 28. From the very wording of the above quote, it is clear that the declaration is required by the registered dealer to purchase goods inter-state on concessional tax rate as under the C.S.T. Act. Vide the powers conferred under Section 13(1) of the C.S.T. Act, the Central Government framed the C.S.T. (Registration Turnover) Rules, 1957. Relevant portions of Rule 12 reads thus; Rule 12. (1) The declaration and the certificate referred to in sub-section (4) of section 8 shall be in Forms C and D respectively ***** (6) Form C referred to in sub-rule (1), or as the case may be, Form F referred to in sub-rule (5), shall be the one obtained by the purchasing dealer or, as the case may be, the transferee in the State in which the goods covered by such form are delivered. [ Explanation . Where, by reason of the purchasing dealer not being registered under section 7 in the State in which the goods covered by Form C referred to in sub-rule (1) are delivered, he is not able to ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not out of place to mention that the statutory C-Forms can be submitted even after completion of the assessment by the seller. The claim cannot be rejected on the score that C-Forms were presented after the assessment. The only obligation on the part of the seller is to prove sufficient case for the late submission of C-Forms. Refund of the Tax Deposited 31. It is also beneficial to refer to the decision rendered by a Division Bench of the Gujarat High Court in Udaipur Cement Works Ltd. v. State of Gujarat 2020 SCC OnLine Guj 3294. In the latter case, a writ petition under Art 226 was preferred seeking for refund of tax amount collected by the seller and deposited with the authorities under the C.S.T. Act. On this aspect, reliance was on decision of the Bench in J.K. Cement Ltd. v. State of Gujarat Special Civil Application No. 15333 of 2019 decided on 18th December, 2019, Gujarat High Court, Once again in Saint-Gobain India Private Limited v. Union of India Special Civil Application No. 1481/2022 decided on 24th February 2022, Gujarat High Court, while reiterating the position of law laid down in Udaipur Cement Works Ltd. (referred supra), the Hon ble Gujarat High Court made an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case, it is only they who would be entitled to refund of the same. 16. Besides the Rajasthan High Court in the petitioners' own case has held that the authorities at Rajasthan were liable to issue C forms in respect of high speed diesel procured for mining purpose through interstate trade. The court has further held that in the event of the petitioners having had to pay any amount on account of the respondents' wrongful refusal to issue C forms, the petitioners shall be entitled to refund and/or adjustment from the concerned authorities who had collected excess tax. The court further directed the concerned authorities to process such claim within twelve weeks of the same being made by the petitioners in writing and the petitioners furnishing the requisite documents/forms. 17. In the present case, in the absence of C forms having been issued by the Rajasthan authorities, the respondent authorities have collected excess tax from the seller - Reliance Industries Limited, who in turn has collected the same from the petitioners. Therefore, in terms of the above order passed by the Rajasthan High Court, once the Rajasthan authorities issue C forms against the sales made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refund amount against its dues. Thus, the stand of the respondents that Reliance Industries Limited should file the refund claim and then pay the amount so refunded to the petitioners is neither legally tenable nor is it practically workable. 19. In the opinion of this court, in the light of the clear directions issued by the Rajasthan High Court in the judgment and order referred to hereinabove, which the respondent authorities are bound to comply with, upon the petitioners making applications for refund along with the requisite documents, the respondents were duty bound to process such claim within a period of twelve weeks from the date of such application. The stand adopted by the respondents that the refund can be made to only to Reliance Industries Limited flies in the face of the order passed by the Rajasthan High Court as well as the above-referred decisions on which reliance has been placed by the learned advocate for the petitioners and is nothing but a purely hyper technical stand adopted by them. Once Reliance Industries Limited has, in clear terms, written to the authorities that various buyers who have purchased HSD in the course of inter-state trade for use in min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition on reference to the judgment of Punjab Haryana High Court, which was confirmed by the Hon ble Apex Court. Thereafter, the Petitioner made their efforts for submission of C-Forms to get refund. Record further shows that the Petitioner submitted C-Forms to Respondent No. 2, which was returned with an endorsement directing them to submit the C-Forms through Respondent No. 3 and then have credit notes from Respondent No. 3, for refund of the amount. 34. Be that as it may, during the pendency of the present petition, Respondent No. 3 has submitted C-Forms which were rejected by the Department stating that they have paid the full tax on the score that they could not get C-Forms. Petitioner having paid the full tax is entitled to the eligible refund. In that view of the matter, in the light of the judgment of a Coordinate Bench of High Court of Gujarat in J.K. Cement (case referred supra), which relied on the decisions of the Hon ble Apex Court in State of Madhya Pradesh v. Vyankatlal and others (case referred supra) it is apposite to direct Respondent Nos. 2 and 4 to consider the C-Forms submitted by the Petitioner relating to the purchase of gas from Respondent No. 3 for claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X
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