2021 (5) TMI 841 - HC - VAT and Sales Tax

Purchasing dealers entitled to 'C' forms for interstate diesel purchases under Central Sales Tax Act

M/s. VAR Blue Metals Versus The Principal Commissioner & Commissioner of Commercial Taxes, Chennai, The Assistant Commissioner (ST), The Joint Commissioner (ST), Chennai

The Court held that dealers were entitled to 'C' forms under the Central Sales Tax Act for purchasing High Speed Diesel from suppliers in other States, ... Issuance of 'C' forms - Concessional rate of duty - purchase of High Speed Diesel from suppliers in other States - HELD THAT:- The issue is covered by a decision of this Court in M/S. THE RAMCO CEMENTS LTD. VERSUS THE COMMISSIONER OF COMMERCIAL TAXES, THE ADDITIONAL COMMISSIONER (CT) [2018 (10) TMI 1529 - MADRAS HIGH COURT] where respondents are directed to permit these petitioners to download 'C ' forms, as has been done in the past for the purpose of purchasing petroleum products against the issuance of 'C' declaration forms. Petition allowed. Issues:1. Entitlement to 'C' forms under the Central Sales Tax Act for the purchase of High Speed Diesel from suppliers in other States.2. Validity of the decision in M/s Ramco Cements Ltd. V. The Commissioner of Commercial Taxes.3. Challenge to the decision by the State in W.A.No.3403 of 2019.4. Dismissal of Special Leave Petitions by the Supreme Court.Entitlement to 'C' Forms:The petitioner sought 'C' forms under the Central Sales Tax Act for purchasing High Speed Diesel from suppliers in other States. The issue was previously addressed in the case of M/s Ramco Cements Ltd., wherein the benefit of concessional rates for inter-state sales was confirmed. The Court referred to decisions from other High Courts supporting the assessee's entitlement to 'C' forms. The State intended to challenge the order but had not done so. The Court held that the decision applied to all dealers seeking the benefit, not limited to those party to the specific case. Consequently, the writ petitions were allowed, directing Assessing Authorities to apply the rationale to pending assessments.Validity of M/s Ramco Cements Ltd. Decision:The State filed a Writ Appeal challenging the decision in the case of Ramco Cements, arguing that the liability to pay tax on purchases was independent of the seller's obligation under the CST Act. The Court rejected the Revenue's contention, emphasizing that purchasing dealers could secure registration under the Act independently. The Court clarified that the scope of the CST Act remained intact despite amendments, allowing purchasing dealers to continue benefiting from concessional rates. The Court dismissed the Writ Appeals, upholding the rights of purchasing dealers and rejecting the Revenue's contentions.Challenge to State's Decision:The State's challenge to the decision in the Ramco Cements case was dismissed by a Division Bench of the Court. The Court emphasized that the right to purchase goods at concessional rates under the CST Act could not be revoked based on the dealer's current sales activities. Denying such rights would lead to unconstitutional classifications. The Court upheld the views of other High Courts and the learned Single Judge, dismissing the Writ Appeals filed by the State and directing the authorities not to restrict the use of 'C' Forms for inter-State purchases.Dismissal of Special Leave Petitions:The Special Leave Petitions filed by the Commercial Taxes Department challenging the decision in the Ramco Cements case were dismissed by a three-Judge Bench of the Supreme Court. Consequently, the writ petition was allowed, and the connected Miscellaneous Petition was closed without costs.---