C Forms entitlement survives GST transition; departmental circular cannot curtail statutory registration or concessional inter-State purchase rights.

A dealer's registration under the Central Sales Tax Act, 1956 does not automatically lapse because its manufactured goods move into the GST regime, and the right to buy the specified commodities in inter-State trade against C forms continues where registration remains valid. The note further states that a circular restricting issuance of C forms by classifying dealers was beyond the Commissioner's power, because the relevant State law authorises clarification on specific tax issues but not a general denial of statutory benefits. The circular was also described as violating Article 14 for irrational classification and want of hearing, and the consequential notices were invalid.

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Issues: (i) Whether dealers engaged in manufacture of goods other than the six specified commodities continued to be entitled to registration under the Central Sales Tax Act, 1956 and to purchase the specified commodities against C forms after the GST regime commenced. (ii) Whether the Commissioner's circular dated 31 May 2018, which restricted issuance of C forms and classified dealers for that purpose, was valid.

Issue (i): Whether dealers engaged in manufacture of goods other than the six specified commodities continued to be entitled to registration under the Central Sales Tax Act, 1956 and to purchase the specified commodities against C forms after the GST regime commenced.

Analysis: Section 7(2) of the Central Sales Tax Act, 1956 gives an independent right to registration to a dealer liable to tax under the sales tax law of the appropriate State, even if the dealer is not liable to pay tax under the Central Sales Tax Act as a seller. The amended definition of goods and the post-GST regime did not repeal the right of a registered dealer to purchase the specified commodities in inter-State trade at concessional rate under Section 8(3)(b). The State VAT law also continued to operate in respect of the six specified commodities, so the dealers' registration could not be treated as pro tanto cancelled or as having automatically lapsed.

Conclusion: The dealers remained entitled to registration under the Central Sales Tax Act, 1956 and to purchase the specified commodities against C forms at the concessional rate.

Issue (ii): Whether the Commissioner's circular dated 31 May 2018, which restricted issuance of C forms and classified dealers for that purpose, was valid.

Analysis: Section 48-A of the Tamil Nadu Value Added Tax Act, 2006 authorises clarification and advance ruling on specific tax issues, but does not empower the Commissioner to issue a general circular creating categories of dealers and denying them the benefit of C forms. The circular also operated without hearing the affected dealers and created an irrational classification having no nexus with the statutory scheme, thereby offending Article 14. The consequential notices founded on that circular could not survive.

Conclusion: The circular and the consequential notices were invalid and liable to be set aside.

Final Conclusion: The Revenue's challenge failed, and the dealers' entitlement to use C forms for inter-State purchase of the specified commodities was upheld, with the impugned departmental directions annulled.

Ratio Decidendi: A dealer's registration under the Central Sales Tax Act, 1956 does not automatically lapse merely because its manufactured goods are brought under GST, and a departmental circular cannot curtail the statutory right to purchase the specified inter-State goods against C forms where the registration remains in force.

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