2020 (12) TMI 694 - HC - VAT and Sales Tax

Court grants interim relief, stays order denying 'C' forms for natural gas in manufacturing.

The court granted interim relief to the petitioner by staying the order denying 'C' forms for natural gas used in manufacturing and directed the ... Issuance of C-Forms - inter-state purchase of natural gas which is consumed by the petitioner in the manufacture of commodities no longer defined as ‘goods’ - petitioner has been denied ‘C’ forms on the ground that natural gas purchased by it in the course of inter-state sale is used for manufacturing of float glass which is not covered by the definition of goods under section 2(d) of the CST Act - HELD THAT:- In CARPO POWER LIMITED VERSUS STATE OF HARYANA AND OTHERS [2018 (4) TMI 146 - PUNJAB AND HARYANA HIGH COURT] Punjab & Haryana High Court dealt with the challenge made by the petitioner to refusal of the respondents to issue ‘C’ forms in respect of natural gas purchased by it in the course of inter-state sale and used by it for generation of electricity and it was 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. It may be mentioned that against the decision of Punjab & Haryana High Court in Carpo Power Limited, State had filed S.L.P. before the Supreme Court but the S.L.P. was dismissed by the Supreme Court by holding that there was no legal and valid ground for interference. A case for interim relief has been made out. Further, there should be uniformity in orders in similar matters - as an interim measure, we stay operation of the letter / order dated 22.08.2019 issued by respondent No.2 and direct the respondents to issue necessary ‘C’ forms to the petitioner. Stand over to 06.01.2021. Issues Involved:1. Eligibility of the petitioner to issue 'C' Forms for inter-state purchase of natural gas under the amended definition of 'goods' in the Central Sales Tax Act, 1956.2. Direction to the respondents to issue 'C' Forms to the petitioner.3. Challenge to the letter/order dated 22.08.2019 issued by respondent No.2.4. Interim relief pending final hearing and disposal of the writ petition.Issue-wise Detailed Analysis:1. Eligibility of the Petitioner to Issue 'C' Forms:The petitioner, a company engaged in manufacturing float glass, purchases natural gas from Gujarat for use as fuel in its manufacturing process. Historically, the petitioner provided 'C' forms to vendors for these inter-state purchases to avail concessional tax rates under Section 8 of the Central Sales Tax Act, 1956 (CST Act). However, post-GST implementation, the definition of 'goods' under Section 2(d) of the CST Act was amended to include only specific items such as petroleum crude, high-speed diesel, motor spirit (petrol), natural gas, aviation turbine fuel, and alcoholic liquor for human consumption. Consequently, the petitioner was denied 'C' forms as its end product, float glass, did not fall under the amended definition.2. Direction to Issue 'C' Forms:The petitioner contended that the Supreme Court's decision in Printers (Mysore) Limited vs. Assistant Commercial Tax Officer clarified that the term 'goods' in Section 8(3)(b) of the CST Act should not be strictly interpreted as per the definition in Section 2(d). The petitioner argued that the context of the term 'goods' in Section 8(3)(b) should allow for the issuance of 'C' forms for natural gas used in manufacturing. The Jharkhand High Court in Tata Steel Limited vs. State of Jharkhand and the Punjab & Haryana High Court in Carpo Power Limited vs. State of Haryana supported this interpretation, directing the issuance of 'C' forms even when the end products did not fall under the amended definition of 'goods'.3. Challenge to the Letter/Order Dated 22.08.2019:The impugned letter/order dated 22.08.2019 from respondent No.2 denied the petitioner's request for 'C' forms, stating that natural gas used for manufacturing float glass did not fall under the amended definition of 'goods'. The petitioner challenged this decision, arguing that the amendment should not restrict the issuance of 'C' forms for natural gas used in manufacturing processes.4. Interim Relief Pending Final Hearing:The court acknowledged the petitioner's reliance on the Supreme Court's decision in Printers (Mysore) Limited and the judgments of the Jharkhand and Punjab & Haryana High Courts. The court noted that granting interim relief would ensure uniformity in similar cases. Consequently, the court stayed the operation of the letter/order dated 22.08.2019 and directed the respondents to issue the necessary 'C' forms to the petitioner as an interim measure. This interim order would remain subject to the final decision in the writ petition.Conclusion:The court provided interim relief to the petitioner by staying the impugned order and directing the issuance of 'C' forms, drawing on precedents that interpreted the term 'goods' in a broader context under Section 8(3)(b) of the CST Act. The final decision on the petitioner's eligibility to issue 'C' forms will be determined in the final hearing.