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TMI Blog2024 (4) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax Act. 1956, and contradict judgements of the Hon'ble Apex Court and Hon'ble Gujarat High Court and against the principles of natural justice, consequently b) Respondent No. 2 may be directed to forthwith process the refund claims of the Petitioner and grant refund of the excess CST amount of Rs. 168,78,52,079/- collected from the Petitioner and remitted by Respondent No. 3, against the sales of the natural gas by Respondent No. 3 to the Petitioner, during the period from 01-07-2017 to 31-12-2019, or alternatively, c) Respondent No. 3 may be directed to submit the C-Forms furnished by the Petitioner to Respondent No. 3 for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-12-2019, consequently, d) Respondent No. 4 or any other appropriate authority may be directed to pass appropriate Assessment and / or refund Order and to refund the excess CST amount of Rs. 168,78,52,079/- collected from the Petitioner and remitted by Respondent No. 3, against the sales of the natural gas by Respondent No. 3 to the Petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been a change in the definition of goods. On combined reading of section 8(1) and 8(3)(b), on inter-state sale of goods, the rate of tax under C.S.T. is at 2% or local rate of the State (from where sale originates), whichever is lower. e. With the advent of GST, under the impression that the Petitioner may not be eligible to purchase the Petroleum products including natural gas at concessional rates of CST, against C-Form, from Respondent No. 3 or any other supplier, and that Petitioner would not be able to furnish C-Forms to Respondent No. 3 on procurement of natural gas as raw material, Respondent No. 3 collected CST at full tax @ 14.5% from the Petitioner and there is no corresponding amendment in Section 8(3)(b) as to eligibility of goods entitled for concessional tax to the definition of goods substituted in the CST Act. The buyers across the country have approached respective High Courts against denial of C-Forms regarding the purchase of Petroleum products including natural gas. On this point, reliance was placed on the decision of the Hon'ble Punjab & Haryana High Court in Carpo Power Ltd. v. State of Haryana 2018 (12) GSTL 248 (P&H), consequent S.L.P. No. 20572 of 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19,56,316 3,61,31,906 22,58,24,410 h. Utilization of C-Forms have been assessed and accepted by the Commercial Tax Department in the States of Uttar Pradesh and Madhya Pradesh. Reliance of the decision of the Hon'ble High Court of Gujarat was taken on the point that the buyer of petroleum products from oil companies located in Gujarat can directly claim refund of excess tax collected by the seller and deposited with the tax authorities under CST Act, 1956. It is further stated that Petitioner has filed a refund claim with copies of 10 nos., of C-forms claiming refund of tax of Rs. 146,10,57,669/- related to the C-Forms issued by Pata Unit and C-farms claiming refund of Rs. 22,5 8,24,410/- related to the C-Farms issued by its Vijaipur Unit under the provisions of Section 38(9) of APVAT Act, 2005 being the excess tax collected by Respondent No. 3 and deposited with Respondent No. 2 enclosing the C-farm declarations downloaded from the website. i. Respondent No. 2 rejected with following specific directives; i. The Petitioner to issue 'C' forms to ONGC i.e., Respondent No. 3. ii. ONGC to file the 'C' forms issued by the Petitioner before the Commercial Tax Officer. iii. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1956 as refund to the unregistered tax payer is not applicable. The directions were given under the endorsement are by following the judgment in case of TATA Steel Limited, Jamshedpur v. State of Jharkhand and others in W.P(T) No. 6048 of 2017 dated 28.08.2019. It is further stated that Respondent No. 4 passed assessment order for the year 2017-18 under CST for Respondent No. 3, dated 25.03.2022. Respondent No. 4 also passed assessment order for the years 2018-19 and 2019-20 of Respondent No. 3 and collected full tax rate on their request in absence of C-Forms. Ultimately, prays for the dismissal of the petition. 4. Contention of Respondent No. 3: a. In July, 2017, Petitioner communicated to Respondent No. 3 that they were not in a position to provide Form C, therefore requested to deduct full tax payable on the supplies made to Pata and Vijaypur. On this request, Respondent No. 3 started raising CST invoice @ 14.5% and the same had been deposited with the Department. Meanwhile on 12.11.2020, Petitioner requested Respondent No. 3 to consider the Form-C for the disputed period and submit the same to the Department for refund of excess CST paid. b. In pursuant to the reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the refund claims made by the petitioner. Since, the petitioner has borne the incidence of tax liability, the petitioner alone is entitled to claim the refund as such the question of issue of credit notes by Respondent No. 3 would not arise in the instant case. e. The stand taken by the Respondent No. 2 is contrary to the view taken by their Lordships in Vyankatlal (case referred supra), which reads thus; "14. The principles laid down in the aforesaid cases were based on the specific provisions in those Acts but the same principles can safely be applied to the facts of the present case inasmuch as in the present case also the respondents had not to pay the amount from their coffers. The burden of paying the amount in question was transferred by the respondents to the purchasers and, therefore, they were not entitled to get a refund. Only the persons on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same. The amount deposited towards the Fund was to be utilized for the development of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 that Petitioner is entitled to have concessional rate of tax, for the purchase for the raw material, which is used in manufacturing process, by submitting the C-forms through the buyer under CST Act. He would submit that after the advent of the GST Act, 2017, there has been lot of confusion in the light of the amendment to the definition of "goods". Thereafter, it is stated that the authorities clarified that certain items would still be covered by the VAT Act, even after the GST Act. On this aspect, reliance was placed by the learned Senior Counsel on the decision of the Hon'ble Punjab and Haryana High Court in case of Capro Power (referred supra) to submit that a Division Bench therein categorically held that even after the GST Act came into force, Petitioner could avail the benefit of concessional rate of tax for purchase of the gas under interstate sales under C.S.T. Act. It was further stated that on S.L.P., a Three-Judge Bench of the Hon'ble Supreme Court in State of Haryana v. CAPRO Power Ltd. 2018 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dealer in the State, as such, the Department cannot entertain their petition for refund. It is also pointed out that the application of refund was not rejected, but was only returned with an endorsement. It is also stated that the C-Forms are not available with the Department as on the date of filing of the W.P. Respondent No. 3 submitted the C-Forms during the pendency of the W.P., which were rejected but not challenged. Learned Government Pleader finally submits that the Petitioner without preferring appeal, filed the present W.P. which is liable to be dismissed. 12. Learned counsel for Respondent No. 3 would submit that, initially the Petitioner has not submitted C-Forms and requested them to collect full rate of tax and it is for this reason that they collected 14.5% of tax from the Petitioner. It is also stated that in absence of C-Forms, the assessment order was passed levying 14.5% of tax and that the Respondent No. 3 has deposited the tax as it is which was collected form the Petitioner. On the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty 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 2(d) underwent change in the following manner:- "(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. 19. In Carpo Power Ltd. (referred supra), before the Hon'ble Punjab and Haryana High Court, the issue was the challenge made by a Petitioner for being refused to be issued C-Forms for the natural gas purchased in an inter-state trade for generation of electricity from Gujarat to Haryana. The question before the Court whether after the amendment of the C.S.T. Act, the petitioner is entitled to be issued `C' Forms in respect of the natural gas purchased in inter-state sale or not. The Hon'ble Court came up 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 Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m." (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 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 paid and when there is compliance to the rules prescribed. Furthermore, the Court also observed that with every state "power", there vests a duty and with every "duty", a "right" flows to the assessee /applicant of the C-Form. Thereafter, it was also noted that there are certain does and do nots for the state while grant or refusal of the same. The kind of enquiry that is to be exercised at the time of issuance of the C-Form to the registered dealer was observed as under; "(xii) The officers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 effect from July 1, 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 July 1, 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance 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 considered the issue of C forms in respect of Natural Gas purchased by the petitioner in one State and used in another State vide judgment dated March 28, 2018 in C. W. P. No. 29437/2017 filed by Carpo Powers Ltd. which has been upheld by the honourable Supreme Court vide its order dated August 13, 2018 in SLP No. 20572/2018 in this matter. 2. This matter has been examined in Department of Revenue and it has been decided to forward copy of aforesaid judgment dated March 28, 2018 (copy enclosed) of honourable High Court of Punjab and Haryana and order dated August 13, 2018 (copy enclosed) of honourable Supreme Court for compliance in the respective States. End : As above. *******".' 26. A Division Bench of the Madras High Court in Commissioner of C. T. v. Ramco Cements (2020) 80 GSTR 8, and a learned Single Judge in Southern Cotspinners Coimbatore Pvt. Ltd. (referred supra) reiterated the settled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 obtain the said form in that State, Form 'C' may be the one obtained by him in the State in which he is registered under the said section. (7) The declaration in Form C or Form F or the certificate in Form E-I or Form E-II shall be furnished to the prescribed authority within three months after the end of the period to which the declaration or the certificate relates: PROVIDED that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing such declaration or certificate within the aforesaid time, the authority may allow such declaration or certificate to be furnished within such further time as that authority may permit." 29. It is trite to mention that, under Rule 12 (7) of C.S.T. (Registration & Turnover) Rules, 1957, a dealer can file C-Forms after making of the assessment by the competent authority. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 observation that despite the coming into force of G.S.T. regime, natural gas continued to be in the ambit of CST Act. Having so noted, it was observed by the Court that the Rajasthan High Court with regard to the same Petitioner directed the issuance of C-Forms. The relevant observations at paras 14-21 quoted from J.K. Cement Ltd. are as follows; "14. In the backdrop of the facts and contentions noted hereinabove, it is an undisputed position that the petitioners have borne the burden of tax as the CST authorities at Rajasthan had refused to issue C forms after the coming into force of the GST regime. On account of non-issuance of C forms, the petitioners were not in a position to submit C form declarations in respect of the diesel purchased by them for their mining activity, as a result whereof, the petitioners could not purchase diesel at concessiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by Reliance Industries Limited to the petitioners and the petitioners produce the requisite documents/forms before the respondent authorities, the respondent authorities are required to process such claim within twelve weeks of the same being made in writing by the petitioners. 18. Pursuant to the above order passed by the Rajasthan High Court, the petitioner in Special Civil Application No. 15333 of 2019 has made an application dated 19.4.2019 to the second respondent for refund of Rs. 2,12,09,162/- charged by Reliance Industries Limited. Along with the application, the petitioner has furnished a copy of the order of the Rajasthan High Court, a statement showing the details of high speed diesel purchases, Form 'C Quarter IIIrd and IVth (F.Y. 2017-18), copy of the letter from Reliance Industries Limited to the Deputy Commissioner of Guja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 mining activities will be approaching their office for refund of the differential tax amount and has enclosed therewith Customer-wise details of inter-state sales made to buyers in Rajasthan at full rate, it is evident that Reliance Industries Limited is not disputing the fact that it is the petitioners who are entitled to claim the refund. Under the circumstances, the respondent authorities are not justified in not processing the refund claims of the petitioners. 20. In case of the petitioners, it is an admitted position that the HSD has been purchased by them from Reliance Industries Limited in the course of inter-State trade for use in mining activities and they are, therefore, the ultimate consumers thereof and hence, the question of passing on the tax burden to anyone would not arise. Consequently, the question of unjust enrich ..... X X X X Extracts X X X X X X X X Extracts X X X X
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