TaxTMI 
TaxTMI 
2019 (9) TMI 524
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.... (T) No. 3380 of 2018, W.P. (T) No. 3677 of 2018, W.P. (T) No. 4036 of 2018, W.P. (T) No. 4093 of 2019, W.P. (T) No. 4508 of 2018, W.P. (T) No. 5375 of 2018, W.P. (T) No. 5990 of 2017, W.P. (T) No. 5991 of 2017, W.P. (T) No. 6009 of 2017, W.P. (T) No. 6044 of 2017, W.P. (T) No. 6050 of 2017, W.P. (T) No. 6081 of 2017, W.P. (T) No. 6132 of 2017, W.P. (T) No. 6134 of 2017, W.P. (T) No. 6138 of 2017, W.P. (T) No. 6169 of 2017, W.P. (T) No. 6234 of 2017, W.P. (T) No. 6416 of 2017, W.P. (T) No. 6511 of 2017, W.P. (T) No. 6892 of 2017, W.P. (T) No. 6893 of 2017, W.P. (T) No. 6897 of 2017, W.P. (T) No. 7107 of 2017, W.P. (T) No. 1952 of 2018, W.P. (T) No. 2646 of 2018 JUDGMENT Heard learned counsel for the petitioners, learned counsel for the State, learned counsel for the Union of India, as also learned counsel for the respondent Oil Companies in all these writ applications. 2. Since common question of law is involved in all these writ applications, they have been heard together, and are being disposed of by this common Judgement. 3. Some of the writ petitioners bef....
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.... dealers are not selling the aforesaid six goods, they are no more liable to pay tax under the JVAT Act,, and as such, their registrations under Section 7(2) of the CST Act as well, have become invalid w.e.f. 01.07.2017. As such, those dealers shall not be entitled to inter-State purchase of the aforesaid six goods, on the concessional rates of tax under the provisions of the CST Act, on the basis of Form-C. Accordingly, the State Government decided not to issue Form-C to such dealers for Inter-State purchase of the aforesaid six goods. 5. In order to appreciate the controversy in all these writ applications, it may be noted that for implementation of the GST regime in the entire Nation under "One Nation One Tax" theme, 101st amendment of the Constitution of India was carried out by the Parliament, introducing Article 246-A, and making necessary amendment in entry 54 of the State list of the seventh schedule of the Constitution of India. Necessary amendment was made in CST Act in the definition of 'goods' as defined under Section 2 (d) of the CST Act. The said definition which was earlier having very wide in scope, and included all materials, articles, commodities and all ....
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....a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be three per cent of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower : *** *** *** (3) The goods referred to in sub-section (1),- (a) [Omitted]. (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or in the tele-communications network or in mining or in the generation or distribution of electricity or any other form of power; *** *** *** (4)The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars i....
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.... Power Limited Vs. State of Haryana and Others, (CWP No.29437 of 2017, decided on 28.03.2018), wherein the Punjab and Haryana High Court in the similar circumstances held that the petitioner before it was entitled for issuance of Form-C for inter-State purchase of one of the items mentioned in Section 2(d) of the CST Act. The matter was taken to the Hon'ble Supreme Court of India, which by order dated 13.08.2018 passed in Special Leave to Appeal (C) No.20572 of 2018, dismissed the SLA preferred against the Judgment passed by the Hon'ble Punjab and Haryana High Court. Thereafter, the Central Government in its Ministry of Finance, Department of Revenue, New Delhi, issued letter dated 01.11.2018, addressed to Commissioners of Commercial Taxes of all the States / Union Territories on the subject regarding issuance of Form-C, making further clarification to its earlier OM dated 07.11.2017, stating that in view of the Judgment passed by the Punjab and Haryana High Court in Carpo Power Limited case, which was upheld by the Hon'ble Supreme Court by its Order dated 13.08.2018 in SLP No.20572 of 2018, the matter had been examined by the Department of Revenue in the Central Government and it ....
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....e dealers and / or to keep the concerned impugned order in abeyance till final decision is taken by the High Court, and the State Government may contest the matters on their own merits and may even decide to take the matters up-to the level of the Hon'ble Supreme Court of India, if the situation so arises. It was also opined by the learned Advocate General that in appropriate cases, all possible corrective measures be taken so that the State exchequers or even the Government of India or its agencies may not be put to loss of revenue only on account of the technical application of the provisions. 11. On the basis of the opinion of the learned Advocate General, the State Government has taken the stand through its letter dated 21.08.2019, addressed to the learned Senior Standing Counsel-III, Jharkhand High Court, that those dealers who have migrated to GST regime and who are not selling the aforesaid six goods covered under Section 2 (d)of the CST Act, are not covered under Section 7(1) of the CST Act as well. Even as per the definition of the 'Sales tax laws' under Section 2(i) of the CST Act, the word 'goods' shall mean only those goods as defined under Section 2(d) of the ....
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....ng to goods referred to in the first half of Section 8(3)( b ), i.e., on first three occasions. It is only when Section 8(3)( b ) uses the expression "goods" in the second half of the clause, i.e., on the fourth occasion that it does not and cannot be understood in the sense it is defined in Section 2( d ). In other words, the "goods" referred in the first half of clause ( b ) in Section 8(3) refers to what may generally be referred to as raw material (in cases where they were purchased by a dealer for use in the manufacture of goods for sale) while the said word "goods" occurring for the fourth time (i.e., in the latter half) cannot obviously refer to raw material. ------------ . It should also be remembered that Section 2 which defines certain expressions occurring in the Act opens with the words: "In this Act, unless the context otherwise requires". This shows that wherever the word "goods" occurs in the enactment, it is not mandatory that one should mechanically attribute to the said expression the meaning assigned to it in clause ( d ). Ordinarily, that is so. But where the context does not permit or where the context requires otherwise, the meaning assigned to it in the said ....
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....he dealers are liable to pay tax under any law of the State. 15. It is further submitted by learned counsels for the petitioners that prior to 01.07.2017, the petitioners were liable to be taxed under the JVAT Act, but after 01.07.2017, i.e., after coming into force of GST regime, they are not liable to be taxed under the JVAT Act, but their registration under Section 7(2) of the CST Act will not come to an automatic end simply because they are no more liable to be taxed under the JVAT Act. It is submitted by learned counsels that for cancellation / amendment registration under Section 7 of the CST Act, there is specific procedure prescribed under under Section 7(4) of the CST Act itself, and there can be no occasion to bring their registration to an automatic end. 16. Learned counsels have further submitted that all these questions have been elaborately decided by the Punjab and Haryana High Court in Carpo Power Limited's case (supra), in which the same stand was taken by the State Government for denying the issuance of Form-C after the coming into effect of GST regime, and pursuant to the amendment in the definition of 'goods' under Section 2(d) of the CST Act. The ....
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....as also come to the finding that the dealers who are registered under the GST Act, can also be registered under the CST Act, in respect of the commodities which fall within the ambit of expression 'goods' as defined under Section 2(d) thereof for getting the benefit of reduced rate of tax under Section 8 of the CST Act. In other words the Gujarat High Court has also taken the similar view. 18. Placing reliance on these decisions, learned counsels for the petitioners pointed out that the Government of India, which had earlier come up with the OM dated 07.11.2017, stating that the term "goods" referred in Section 8(3)(b) of the CST Act will have the same meaning as defined and amended under Section 2(d) of the CST Act, has now come up with another clarification, vide its letter dated 01.11.2018, issued to all the Commissioners of Commercial Taxes in all the States and Union Territories, with respect to the definition of 'goods' under Section 8(3)(b) of the CST Act and issuance of Form-C, stating that the matter has been finally settled by the Hon'ble Punjab and Haryana High Court and also upheld by the Hon'ble Supreme Court, and accordingly, all the Commissioners of ....
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....tion 2(i) of the CST Act defining the 'Sales tax law' shall also mean only those six goods as defined under Section 2(d) of the CST Act, which are not taxable under the State GST Act, therefore, it cannot be said that the interpretation of definition of 'Sales tax law' that it shall include even such 'goods' in respect of which GST law is not applicable, is a proper interpretation in the eyes of law. It is submitted by the learned counsel for the State that the Special Leave to Appeal preferred against the said Judgment has been dismissed in limine by the Hon'ble Apex Court, and no decision has been given on merits. Simply due to the fact that the Special Leave to Appeal has been dismissed, the Judgment rendered by the Punjab and Haryana High Court cannot be said to be a binding precedent for this High Court. Learned counsel further endorsed the opinion of the learned Advocate General given to the State Government, that in some of the matters, in which, the mining contractors are performing the contractual works and by utilising Form-C, they are buying VAT items, in these cases high speed diesel, at liability of tax at 2%, whereas the price of high speed die....
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....ned notification dated 11.10.2017. Learned counsel accordingly, submitted that there is no illegality in the said notification and it cannot be struck down only on the score that the Punjab and Haryana High Court and other High Courts relying upon its decision, have taken a contrary view. Learned counsel accordingly, opposed the prayer made by the writ petitioners. 23. In reply to the submission of the learned counsel for the State, with regard to some of the writ petitioners, stating that they are taking the benefit of the concessional rate of tax under the CST on the basis of Form-C issued and they are still receiving from their employer of State VAT which is 22% approximately, it is pointed out by the learned counsel for those petitioners that on this score, they were denied Form-C, but upon intervention of the Court, their Form-C have been restored. Learned counsel has submitted that there is no illegality in the same. 24. Be that as it may, we are not concerned with the individual cases at this stage, as the impugned action of the State is the blanket ban on issuance of Form-C by the State Government to all those dealers who are not selling the goods as defined under Se....
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....oods' as given under Section 2(d) of the CST Act is that earlier the definition was having a wider connotation, empassing into it almost all types of goods, except five goods mentioned therein, i.e., newspapers, actionable claims, stocks, shares and securities, whereas after the amendment the restricted meaning has been given to the word 'goods' which shall include the six items only, which are presently there in the Act. The reasonings given by the Hon'ble Supreme Court in Paragraph-18 of the said Judgment, quoted above, have nothing to do either with non-liability of the press to make any payment of tax, or the freedom of press under Article 19(2) of the Constitution of India. The reasons given in paragraph-18 of the said Judgment by the Hon'ble Apex Court fully apply to the facts of the present case also, which conclusively hold that the word 'goods' appearing in the second half of Section 8(3) (b) of the CST Act may not necessarily mean the 'goods' as defined under Section 2(d) of the CST Act. We also find that the registration of a dealer under Section 7(2) of the CST Act is not subject to any liability of the dealer to pay the tax or not, rather as laid down by the Hon'ble Ap....