TaxTMI 
TaxTMI 
2024 (4) TMI 812
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....o the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgements of the Hon'ble Apex Court and Hon'ble Gujarat High Court and against the principles of natural justice, consequently b) Respondent No. 2 may be directed to forthwith process the refund claims of the Petitioner and grant refund of the excess CST amount of Rs. 168,78,52,079/- collected from the Petitioner and remitted by Respondent No. 3, against the sales of the natural gas by Respondent No. 3 to the Petitioner, during the period from 01-07-2017 to 31-12-2019, or alternatively, c) Respondent No. 3 may be directed to submit the C-Forms furnished by the Petitioner to Respondent No. 3 for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-12-2019, consequently, d) Respondent No. 4 or any other appropriate authority may be directed to pass appropriate Assessment and / or refund Order and to refund the excess CST amount of Rs. 168,78,52,079/- collected from the Petitioner and remitted by Respondent No. 3....
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.... also the Tax Authorities in Andhra Pradesh. Due to the introduction of GST Act from 01. 07.2017, there has been a change in the definition of goods. On combined reading of section 8(1) and 8(3)(b), on inter-state sale of goods, the rate of tax under C.S.T. is at 2% or local rate of the State (from where sale originates), whichever is lower. e. With the advent of GST, under the impression that the Petitioner may not be eligible to purchase the Petroleum products including natural gas at concessional rates of CST, against C-Form, from Respondent No. 3 or any other supplier, and that Petitioner would not be able to furnish C-Forms to Respondent No. 3 on procurement of natural gas as raw material, Respondent No. 3 collected CST at full tax @ 14.5% from the Petitioner and there is no corresponding amendment in Section 8(3)(b) as to eligibility of goods entitled for concessional tax to the definition of goods substituted in the CST Act. The buyers across the country have approached respective High Courts against denial of C-Forms regarding the purchase of Petroleum products including natural gas. On this point, reliance was placed on the decision of the Hon'ble Punjab & Haryana....
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....s. Excess tax charged & collected by ONGC Rs. 2018-19 20,14,10,437 2,77,80,750 17,36,29,687 2019-20 (up to September, 2019) 6,05,45,879 83,51,156 5,21,94,723 Total 26,19,56,316 3,61,31,906 22,58,24,410 h. Utilization of C-Forms have been assessed and accepted by the Commercial Tax Department in the States of Uttar Pradesh and Madhya Pradesh. Reliance of the decision of the Hon'ble High Court of Gujarat was taken on the point that the buyer of petroleum products from oil companies located in Gujarat can directly claim refund of excess tax collected by the seller and deposited with the tax authorities under CST Act, 1956. It is further stated that Petitioner has filed a refund claim with copies of 10 nos., of C-forms claiming refund of tax of Rs. 146,10,57,669/- related to the C-Forms issued by Pata Unit and C-farms claiming refund of Rs. 22,5 8,24,410/- related to the C-Farms issued by its Vijaipur Unit under the provisions of Section 38(9) of APVAT Act, 2005 being the excess tax collected by Respondent No. 3 and deposited with Respondent No. 2 enclosing the C-farm declarations downloaded from the website. i. Respondent No. 2 ....
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....espondent No. 4 to arrive tax liability and then Respondent No. 3 can file application for refund to the concerned officer Respondent No. 4. d. Respondent No. 2 finally stated that they have issued endorsement as per Section 38(9) of AP VAT Act, 2005 read with Section 9(2) of CST Act, 1956 as refund to the unregistered tax payer is not applicable. The directions were given under the endorsement are by following the judgment in case of TATA Steel Limited, Jamshedpur v. State of Jharkhand and others in W.P(T) No. 6048 of 2017 dated 28.08.2019. It is further stated that Respondent No. 4 passed assessment order for the year 2017-18 under CST for Respondent No. 3, dated 25.03.2022. Respondent No. 4 also passed assessment order for the years 2018-19 and 2019-20 of Respondent No. 3 and collected full tax rate on their request in absence of C-Forms. Ultimately, prays for the dismissal of the petition. 4. Contention of Respondent No. 3: a. In July, 2017, Petitioner communicated to Respondent No. 3 that they were not in a position to provide Form C, therefore requested to deduct full tax payable on the supplies made to Pata and Vijaypur. On this request, Respondent No. 3....
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.... suppliers situated in other States. Accordingly, as per the directions of the Honourable High Court of Gujarat vide order Dt. 01.12.2022, the petitioner got the refund of the excess CST of Rs 66.07 crore as per the Order (State Tax) Gujarat Dt. 20.12.2022. d. Respondent No. 2 is empowered to make assessment of the Respondent No. 3 and examine the eligibility of concessional rate of tax against 'C' Forms submitted by the petitioner and to grant consequential relief as per the refund claims made by the petitioner. Since, the petitioner has borne the incidence of tax liability, the petitioner alone is entitled to claim the refund as such the question of issue of credit notes by Respondent No. 3 would not arise in the instant case. e. The stand taken by the Respondent No. 2 is contrary to the view taken by their Lordships in Vyankatlal (case referred supra), which reads thus; "14. The principles laid down in the aforesaid cases were based on the specific provisions in those Acts but the same principles can safely be applied to the facts of the present case inasmuch as in the present case also the respondents had not to pay the amount from their coffe....
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....hould have passed necessary orders for the years 2018-19 and 2019-20 by considering the C-Forms already on record as huge amounts of refund were blocked. Arguments Advanced at the Bar 6. Heard Sri S. Ravi learned Senior Counsel representing Sri A. Sarveswara Rao learned counsel for the Petitioner, learned Government Pleader for Commercial Tax and Sri D.S. Sivadarshan, learned counsel for Respondent No. 3. Perused the Material on record. 7. Learned Senior counsel for the Petitioner in elaboration to the contents stated in the Writ Affidavit, would submit that Petitioner is entitled to have concessional rate of tax, for the purchase for the raw material, which is used in manufacturing process, by submitting the C-forms through the buyer under CST Act. He would submit that after the advent of the GST Act, 2017, there has been lot of confusion in the light of the amendment to the definition of "goods". Thereafter, it is stated that the authorities clarified that certain items would still be covered by the VAT Act, even after the GST Act. On this aspect, reliance was placed by the learned Senior Counsel on the decision of the Hon'ble Punjab and Haryana High Court in case of Cap....
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.... seeks to direct Respondent No. 4 to pass appropriate re-assessment orders for the years 2017-18 and 2018-19 by considering the C forms submitted by the Petitioner and to pass fresh orders by granting concessional rate of tax as per the provisions of Section 8(1) of the CST Act. 11. Learned Government Pleader for Commercial Tax would submit that it is for Respondent No. 3 to submit the C-Forms, as Assessment Order came to be passed and that the C-Forms filed by Respondent No. 3 were rejected. Learned Government Pleader further submits that, Petitioner is not a registered dealer in the State, as such, the Department cannot entertain their petition for refund. It is also pointed out that the application of refund was not rejected, but was only returned with an endorsement. It is also stated that the C-Forms are not available with the Department as on the date of filing of the W.P. Respondent No. 3 submitted the C-Forms during the pendency of the W.P., which were rejected but not challenged. Learned Government Pleader finally submits that the Petitioner without preferring appeal, filed the present W.P. which is liable to be dismissed. 12. Learned counsel for Respondent No. 3 wou....
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....use by him in the manufacture or processing for sale of goods specified under Section 2(d). 17. From 01.07.2017, the G.S.T. regime came into force. Due to the advent of the GST, there has been an amendment to the definition of goods under the C.S.T. Act. Previously, Sec 2(d) of CST Act, which defined goods, read as under:- "(d) goods includes all materials, articles, commodities and all other kinds of movable property but does not include newspapers, actionable claims, stocks, shares & securities." 18. Vide the Taxation Laws (Amendment) Act, 2017 (Act No. 18 OF 2017), the definition of "goods" under Section 2(d) underwent change in the following manner:- "(d) 'goods' means (i) petroleum crude; (ii) high speed diesel; (iii) motor spirit (commonly known as petrol); (iv) natural gas; (v) aviation turbine fuel; and (vi) alcoholic liquor for human consumption. 19. In Carpo Power Ltd. (referred supra), before the Hon'ble Punjab and Haryana High Court, the issue was the challenge made by a Petitioner for being refused to be issued C-Forms for the natural gas purchased in an inter-state trade for gener....
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....nt of the petitioner having had to pay the oil companies any amount on account of the first respondent's wrongful refusal to issue 'C' Forms the petitioner shall be entitled to refund and/or adjustment of the same from the concerned authorities who collected the excess tax through the oil companies or otherwise. The concerned authorities shall process such a claim within twelve weeks of the same being made by the petitioner in writing and the petitioner furnishing the requisite documents/form." (emphasis supplied) 20. In Tata Steel Ltd. v. State of Jharkhand, (referred supra), a prayer was sought to direct issuance of C-Forms with respect to an inter-state purchase. A Division Bench of the High Court of Jharkhand, made an exhaustive analysis on the aspect of issuance of these statutory forms in light of the increasing litigation for the grant and denial of the same. On a combined reading of the C.S.T Act, 1956 and the C.S.T. (Registration and Turnover) Rules, 1957, it was opined that the C-Forms have to be given to the registered dealer when the goods in respect of which the C-Form is used, are included in the registration certificate; when necessary, application am....
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.... therein to migrate to the G.S.T. registration. 23. Further, in Shree Raipur Cement Plant v. State of Chhattisgarh (2018) 55 GSTR 306, a question as to the entitlement of C-Form post promulgation of the C.G.S.T. Act, 2017 was in issue before the High Court of Chhattisgarh. While reiterating the position laid down Carpo Power Ltd. (referred supra), held as follows; "39. On the basis of aforesaid analysis, it is held that the petitioner is a registered dealer under the provisions of the CST Act, 1956 read with the Rules of 1957 and his registration certificate under the CST Act, 1956 read with the Rules of 1957 continues to be valid for the purpose of inter-State sale and purchase of high speed diesel despite the petitioner having been migrated to the GST regime with effect from July 1, 2017, as the definition of goods as defined in section 2(d) of the CST Act, 1956 has been amended prior to coming into force of the CGST Act, 2017 from July 1, 2017 which includes high speed diesel. Further, under section 9(2) of the CGST Act, 2017, the GST Council has not made any recommendation for bringing high speed diesel within the ambit of the CGST Act, 2017 and therefore the Centra....
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....s of various Courts on this point, noted the circular issued on 01-11-2018 by the Ministry of Finance to the Commissioners of Commercial Tax of States/Union Territories to abide by the decision rendered in Carpo Power Limited, which was confirmed by the Hon'ble Supreme Court. The relevant portion of the letter reads thus; 'Dated the 1st November, 2018. To : The Commissioner of Commercial Tax of all States/Union Territories. Subject : Regarding definition of goods in sub-section (3)(b) of section 8 of the Central Sales tax Act, 1956 and issuance of Form C. Sir/Madam, 1. I am directed to refer to OM dated November 7, 2017 (copy enclosed) regarding clarification of definition of goods in sub-section (3)(b) of section 8 of the Central Sales tax Act, 1956 and to say that Honourable Punjab and Haryana High Court has considered the issue of C forms in respect of Natural Gas purchased by the petitioner in one State and used in another State vide judgment dated March 28, 2018 in C. W. P. No. 29437/2017 filed by Carpo Powers Ltd. which has been upheld by the honourable Supreme Court vide its order dated August 13, 2018 in SLP....
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.... above quote, it is clear that the declaration is required by the registered dealer to purchase goods inter-state on concessional tax rate as under the C.S.T. Act. Vide the powers conferred under Section 13(1) of the C.S.T. Act, the Central Government framed the C.S.T. (Registration & Turnover) Rules, 1957. Relevant portions of Rule 12 reads thus; "Rule 12. (1) The declaration and the certificate referred to in sub-section (4) of section 8 shall be in Forms C and D respectively ***** (6) Form 'C' referred to in sub-rule (1), or as the case may be, Form 'F' referred to in sub-rule (5), shall be the one obtained by the purchasing dealer or, as the case may be, the transferee in the State in which the goods covered by such form are delivered. [Explanation.- Where, by reason of the purchasing dealer not being registered under section 7 in the State in which the goods covered by Form 'C' referred to in sub-rule (1) are delivered, he is not able to obtain the said form in that State, Form 'C' may be the one obtained by him in the State in which he is registered under the said section. (7) The declaration in Form C or Form F or the certificate ....
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....t C-Forms were presented after the assessment. The only obligation on the part of the seller is to prove sufficient case for the late submission of C-Forms. * Refund of the Tax Deposited 31. It is also beneficial to refer to the decision rendered by a Division Bench of the Gujarat High Court in Udaipur Cement Works Ltd. v. State of Gujarat 2020 SCC OnLine Guj 3294. In the latter case, a writ petition under Art 226 was preferred seeking for refund of tax amount collected by the seller and deposited with the authorities under the C.S.T. Act. On this aspect, reliance was on decision of the Bench in J.K. Cement Ltd. v. State of Gujarat Special Civil Application No. 15333 of 2019 decided on 18th December, 2019, Gujarat High Court, Once again in Saint-Gobain India Private Limited v. Union of India Special Civil Application No. 1481/2022 decided on 24th February 2022, Gujarat High Court, while reiterating the position of law laid down in Udaipur Cement Works Ltd. (referred supra), the Hon'ble Gujarat High Court made an observation that despite the coming into force of G.S.T. regime, natural gas continued to be in the ambit of CST Act. Having so noted, it was observed by the Court th....
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....wn case has held that the authorities at Rajasthan were liable to issue 'C' forms in respect of high speed diesel procured for mining purpose through interstate trade. The court has further held that in the event of the petitioners having had to pay any amount on account of the respondents' wrongful refusal to issue 'C' forms, the petitioners shall be entitled to refund and/or adjustment from the concerned authorities who had collected excess tax. The court further directed the concerned authorities to process such claim within twelve weeks of the same being made by the petitioners in writing and the petitioners furnishing the requisite documents/forms. 17. In the present case, in the absence of 'C' forms having been issued by the Rajasthan authorities, the respondent authorities have collected excess tax from the seller - Reliance Industries Limited, who in turn has collected the same from the petitioners. Therefore, in terms of the above order passed by the Rajasthan High Court, once the Rajasthan authorities issue C forms against the sales made by Reliance Industries Limited to the petitioners and the petitioners produce the requisite documents/forms before the resp....
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.... file the refund claim and then pay the amount so refunded to the petitioners is neither legally tenable nor is it practically workable. 19. In the opinion of this court, in the light of the clear directions issued by the Rajasthan High Court in the judgment and order referred to hereinabove, which the respondent authorities are bound to comply with, upon the petitioners making applications for refund along with the requisite documents, the respondents were duty bound to process such claim within a period of twelve weeks from the date of such application. The stand adopted by the respondents that the refund can be made to only to Reliance Industries Limited flies in the face of the order passed by the Rajasthan High Court as well as the above-referred decisions on which reliance has been placed by the learned advocate for the petitioners and is nothing but a purely hyper technical stand adopted by them. Once Reliance Industries Limited has, in clear terms, written to the authorities that various buyers who have purchased HSD in the course of inter-state trade for use in mining activities will be approaching their office for refund of the differential tax amount and has enc....