Court rules in favor of petitioners, quashes impugned letters. State Tax Officer to act independently. Dual registrations allowed.

The court ruled in favor of the petitioners on all three issues presented in the case. The impugned letters dated 27.2.2019 were quashed and set aside, holding that the State Tax Officer must act independently without seeking guidance from a higher authority under section 7 of the CST Act. Additionally, the court determined that CST registrations do not automatically become inactive under the Taxation Laws (Amendment) Act, 2017, and dealers can hold dual registrations under the GST Act and the CST Act if dealing in goods covered by both Acts.

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Issues Involved:
1. Authority to review or keep in abeyance an order passed under section 7 of the CST Act.
2. Impact of the Taxation Laws (Amendment) Act, 2017 on CST registrations.
3. Compatibility of dual registration under the GST Act and the CST Act.

Detailed Analysis:

Issue 1: Authority to Review or Keep in Abeyance an Order Passed Under Section 7 of the CST Act
The court examined whether the authority under section 7 of the CST Act has the power to review or keep in abeyance an order on the ground of seeking guidance from a superior authority. It was held that the second respondent, a State Tax Officer, is the notified authority to decide applications for registration under section 7 of the CST Act and must act independently without seeking guidance from a higher authority. The court emphasized that there is no provision in section 7 of the CST Act that allows the authority to review or keep an order in abeyance. Consequently, the impugned letters dated 27.2.2019, which kept the approval of the petitioners' registration amendments in abeyance, were held to be without jurisdiction and illegal.

Issue 2: Impact of the Taxation Laws (Amendment) Act, 2017 on CST Registrations
The court addressed whether CST registrations of dealers dealing in goods other than those specified in the amended section 2(d) of the CST Act would automatically become inactive upon the coming into force of the Taxation Laws (Amendment) Act, 2017. It was held that there is no provision in the CST Act for automatic cancellation or inactivation of registration certificates. The court noted that while the Gujarat Value Added Tax Act, 2003 provides for automatic deregistration, no such provision exists in the CST Act. Therefore, the CST registrations of dealers dealing in goods not specified in the amended section 2(d) do not automatically become inactive.

Issue 3: Compatibility of Dual Registration Under the GST Act and the CST Act
The court considered whether a dealer registered under the GST Act could also be registered under the CST Act. It was held that dealers dealing in goods specified under the amended section 2(d) of the CST Act must be registered under the CST Act to benefit from the reduced tax rate under section 8. The court clarified that dealers could hold separate registrations under both the GST Act and the CST Act if they deal in goods covered by both Acts. Thus, the contention that petitioners registered under the GST Act could not be registered under the CST Act was rejected.

Conclusion:
The petitions were allowed, and the impugned letters dated 27.2.2019 were quashed and set aside, with the court ruling in favor of the petitioners on all three issues. The court made the rule absolute with costs.

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