Form C declarations ordered for Extra Neutral Alcohol purchases from outside state under Central Sales Tax Act

The HC directed the respondent to issue Form C declarations under the Central Sales Tax Act, 1956 for petitioner's Extra Neutral Alcohol (ENA) purchases from outside Tamil Nadu from 01.07.2017 onwards. The court noted that ENA suppliers had been following CST Act and paying taxes accordingly, but assessments were pending due to blocked portal preventing Form C generation. Following the 52nd GST Council Meeting decision on 07.10.2023 to keep ENA for alcoholic liquor manufacture outside GST purview, the court ordered respondents to reopen the web portal for ENA commodity uploads and continue issuing Form C until legislative amendments exclude ENA from GST ambit. The writ petition was disposed of with directions for compliance.

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Issues involved:
The issues involved in the judgment include the petitioner's request for the issuance of a writ of certiorarified mandamus to quash the arbitrary and illegal blocking of Code No.302 by the respondent department, which prevented the petitioner from reporting inter-state purchases of Extra Neutral Alcohol (ENA) under the Central Sales Tax Act, 1956.

Issue 1: Blocking of Code No.302 and inability to generate Form 'C' for ENA purchases:
The petitioner, engaged in manufacturing Alcoholic Liquor, faced challenges in reporting inter-state purchases of Extra Neutral Alcohol (ENA) post-GST implementation due to the blocking of Code No.302 by the respondent department. This hindrance prevented the petitioner from generating Form 'C' declarations for ENA purchases, leading to non-compliance with reporting requirements under the CST Act, 1956.

Issue 2: Applicability of GST on ENA and lack of decision by GST Council:
The petitioner argued that the GST Council had not conclusively decided on the applicability of GST on ENA, despite discussions in various meetings. The petitioner contended that until a final decision is made, the respondent department should not deny the issuance of Form 'C', as the responsibility for charging correct tax rates lies with the selling dealer in inter-state transactions involving ENA.

Issue 3: Stand of the State and recent GST Council decision on ENA:
The State expressed its preference to keep ENA outside the purview of GST, as stated in the 43rd GST Council Meeting. Subsequently, in the 52nd GST Council Meeting, a decision was made to exclude ENA used for manufacturing alcoholic liquor from GST. The court considered these developments and directed the respondents to issue Form 'C' for ENA purchases from July 1, 2017, onwards until suitable amendments are made in the law to exclude ENA from GST.

Separate Judgment Highlight:
No separate judgment was delivered by the judges in this case.

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