Court upholds Assessees' right to use 'C' forms post-GST for concessional purchases, invalidating Revenue's Circular

The court dismissed the intra-court Writ Appeals filed by the Revenue, upholding the Single Judge's decision and confirming the Assessees' right to purchase specified goods at concessional rates using 'C' forms post-GST. It held that the CST Act's provisions allowing such purchases remained valid, emphasizing that the impugned Circular was issued without jurisdiction and violated principles of natural justice. The court directed Revenue Authorities to allow the use of 'C' forms for inter-State purchases and quashed the Circular and related Notices.

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Issues Involved:
1. Validity of the intra-court Writ Appeals filed by the Commissioner of Commercial Taxes.
2. Interpretation of the CST Act, 1956 post-GST regime.
3. Eligibility of Assessees to use 'C' forms for purchasing six specified goods at a concessional rate.
4. Validity of the Circular issued by the Commissioner of Commercial Taxes on 31.05.2018.
5. Compliance with principles of natural justice in issuing the impugned Circular.

Issue-wise Detailed Analysis:

1. Validity of the Intra-Court Writ Appeals:
The Commissioner of Commercial Taxes filed intra-court Writ Appeals against the order of the learned Single Judge who quashed the impugned communication dated 31.05.2018 and consequential Notices. The Single Judge allowed the Writ Petitions filed by the Assessees, quashing the communication that denied the benefit of purchasing HSD Diesel and Natural Gas at a concessional rate using 'C' forms.

2. Interpretation of the CST Act, 1956 Post-GST Regime:
The Revenue contended that post-GST, the CST Act, 1956 was restricted to six commodities, and Assessees engaged in manufacturing activities covered by GST laws were not entitled to purchase these commodities at concessional rates using 'C' forms. The Assessees argued that their registration under the CST Act continued to be valid post-GST, and they were entitled to purchase the specified goods at concessional rates. The court agreed with the Assessees, stating that the CST Act's scope was not entirely amended, and the right to purchase at concessional rates using 'C' forms continued under Section 8(3)(b) of the Act.

3. Eligibility of Assessees to Use 'C' Forms for Purchasing Six Specified Goods:
The court held that the Assessees' right to purchase the six specified goods at concessional rates using 'C' forms continued unabated post-GST. The court rejected the Revenue's contention that the Assessees' registration under the CST Act was void post-GST. The court emphasized that the CST Act allowed registration for purchasing goods in inter-State trade or commerce, independent of the liability to pay tax under the Act.

4. Validity of the Circular Issued by the Commissioner of Commercial Taxes on 31.05.2018:
The court found the impugned Circular dated 31.05.2018 to be without jurisdiction and in violation of principles of natural justice. The Circular created an arbitrary classification of Dealers, allowing certain categories to use 'C' forms while denying the same benefit to others, such as Cement Industries. The court held that the Circular was not supported by statutory authority and was issued without affording an opportunity of hearing to the Assessees.

5. Compliance with Principles of Natural Justice in Issuing the Impugned Circular:
The court noted that the impugned Circular was issued without giving the Assessees an opportunity of hearing, violating principles of natural justice. The court emphasized that any quasi-judicial order with civil consequences must be passed after affording an opportunity of hearing to the affected parties.

Conclusion:
The court dismissed the Writ Appeals filed by the Revenue, affirming the view of the learned Single Judge and other High Courts. The court directed the Revenue Authorities not to restrict the use of 'C' forms for inter-State purchases of the six specified commodities at concessional rates and to permit the online downloading of such Declaration in 'C' forms. The impugned Circular dated 31.05.2018 and consequential Notices were quashed.

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