Shree Raipur Cement Plant (A unit of Shree Cement Limited) Versus State of Chhattisgarh, The Commissioner, Commercial Taxes Department, The Assistant Commissioner, Commercial Taxes Department, Union of India, Ministry of Finance (Department of Revenue), The Under Secretary (ST-II), Ministry of Finance
GST
2018 (5) TMI 1494 – CHHATTISGARH HIGH COURT – 2018 (17) G. S. T. L. 387 (Chhattisgarh)
CHHATTISGARH HIGH COURT – HC
Dated:- 18-5-2018
Writ Petition (T) No. 83 of 2018
GST
Hon'ble Shri Justice Sanjay K. Agrawal
For the Petitioner: Mr. Ramit Mehta, Mr. Saurabh Maheshwari and Mr. Anumeh Shrivastava, Advocates
For the Respondents : State of Chhattisgarh: – Mr. Anand Dadariya, Deputy Government Advocate
For the Respondents : Union of India: – Mr. Vaibhav P. Shukla, Advocate, appears on behalf of Mr. B. Gopa Kumar, Assistant Solicitor General of India
ORDER
1. The short question involved in this writ petition is, whether the petitioner is entitled to be issued
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etitioner was also having registration certificate under the provisions of the Chhattisgarh Value Added Tax Act, 2005 and with the introduction of the Central Goods and Services Tax Act, 2017 (for short, the CGST Act, 2017), the petitioner has also been registered under the CGST Act, 2017 with effect from 1-7-2017. It is the case of the petitioner that the respondent Department had been issuing C-Forms to the petitioner Company till 30-6-2017 for the goods covered under Section 2(d) of the CST Act, 1956 and as specified in the certificate of registration of the dealer for use in terms of Section 8 of the CST Act, 1956, but with effect from 1-7-2017, from coming into force of the CGST Act, 2017, C-Form is not being issued and / or withheld by showing error message that “ED9: Invoice date should be less than 1st July, 2017”.
3. The petitioner has filed this writ petition stating inter alia that its registration certificate is with regard to High Speed Diesel covered under the definition
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ax Act, 2005. After the roll-out of the Central Goods and Services Tax Act, 2017, the petitioner / dealer has been migrated to the GST regime by virtue of the provisions contained in Section 139 of the CGST Act, 2017 and the provisions of the CGST Act, 2017 as such, the petitioner's previous registration under the CST Act, 1956 is no more valid and, therefore, the petitioner has rightly been denied the privilege of C-Form, as under the provisions of the CST Act, 1956, C-Form has to be issued only to the registered dealer under the said Act. Therefore, the petitioner's registration under the CST Act, 1956 stood cancelled upon the petitioner's registration under the CGST Act, 2017 and thus, the petitioner is not entitled for the privilege of C-Form under the CST Act, 1956 read with the Rules of 1957. It has further been stated that the petitioner has not availed the facility of C-Form so far as High Speed Diesel is concerned, till 30-6-2017, therefore, the petitioner Company
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e levied with effect from such date as may be notified on the recommendations of the Council. The GST Council till this date, admittedly and undisputedly, has not notified high speed diesel bringing it under the purview of the CGST Act, 2017. Therefore, the petitioner is entitled for issuance of C-Form under the CST Act, 1956 and its migration to the registration under the CGST Act, 2017 will be confined excluding the goods (high speed diesel), as there is no provision even under the CGST Act, 2017 that his registration under the CGST Act, 2017 would automatically cancel his registration under the CST Act, 1956 particularly, the goods which are included in Section 2(d) of the CST Act, 1956 and those have been excluded from the purview of the CGST Act, 2017 by Section 9(2) of the CGST Act, 2017, as by issuance of C-Form the petitioner would be entitled for concessional rate of tax. Therefore, the writ petition be allowed and the respondent State be directed to issue C-Form to the petiti
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ed the privilege of C-Form for high speed diesel prior to 1-7-2017 and as such, high speed diesel is used by the petitioner for the purpose of operation of drill machine at mines, lifting and loading of limestone in dumper, use of diesel as fuel in dumper and other equipments for extraction of limestone from mines and its transportation, use of diesel in plant and machinery such as kiln and other machineries used in manufacture of clinker and cement etc.. Therefore, the petitioner is otherwise also not entitled for issuance of C-Form as he does not fulfill the criteria under Section 8(3)(b) of the CST Act, 1956 and as such, issuance of C-Form to the petitioner is not permissible and the writ petition is liable to be dismissed. He would finally submit that after coming into force of the CGST Act, 2017, the petitioner has not filed any return under the CST Act, 1956, as such, the writ petition deserves to be dismissed.
7. In rejoinder submission, Mr. Mehta would submit that the CST Act,
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ection 7(1) of the CST Act, 1956. Replying to the submission of not filing return under the CST Act, 1956 after coming into force of the CGST Act, 2017, he would submit that C-Form has not been issued to the petitioner, despite request, therefore, he could not file return and the petitioner's representation has not been replied / answered.
8. I have heard learned counsel for the parties and considered their rival submissions made herein-above and went through the record with utmost circumspection.
9. In order to judge the correctness of the plea raised at the Bar, it would be appropriate to notice the broad features of the CST Act, 1956 before entering into the merits of the matter.
10. The CST Act, 1956 has been enacted to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import into or export from India, to provide for the levy, collection and distribution of t
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ch goods inside the appropriate State under the Sales Tax Law of that State.
12. Under Section 7(1) of the CST Act, 1956, every dealer, who is liable to pay tax under the CST Act, 1956, should make an application for registration under the Act, to such authority in the appropriate State, as the Central Government may specify. The certificate of registration so issued is liable to be cancelled under sub-section (4) (b) of Section 7, if the dealer fails to pay any tax or penalty payable under the CST Act, 1956.
13. Sub-section (1) of Section 8 of the CST Act, 1956 carves out an exception. If the sale is to a registered dealer and if the sale is of the goods described in sub-section (3), the dealer need not pay tax at the rate prescribed by the local Sales Tax Law of the State in terms of sub-section (2). It is enough if such a person pays only 2%. Under sub-section (4) of Section 8, the dealer is obliged to furnish to the prescribed authority, a declaration duly filled and signed by th
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15. In exercise of powers conferred by sub-section (1) of Section 13 of the CST Act, 1956, the Central Government has framed Rules known as the Central Sales Tax (Registration and Turnover) Rules, 1957. Rule 12 of the said Rules provides as under:-
“12. (1) The declaration and the certificate referred to in sub-section (4) of Section 8 shall be in Forms 'C' and 'D' respectively:
Provided that Form 'C' in force before the commencement of the Central Sales Tax (Registration and Turnover) (Amendment) Rules, 1974, or before the commencement of the Central Sales Tax (Registration & Turnover) (Amendment) Rules, 1976, may also be used up to the 31st December, 1979 with suitable modifications:
Provided further that a single declaration may cover all transactions of sale which take place in one financial year between the same two dealers:
Provided also that where, in the case of any transaction of sale, the delivery of goods is spread over to different quarters in a financial year
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he case may be, may furnish one such indemnity bond to cover all the forms of declarations so lost.
(3) Where a declaration form furnished by the dealer purchasing the goods or the certificate furnished by the Government has been lost, the dealer selling the goods, may demand from the dealer who purchased the goods or, as the case may be, from the Government, which purchased the goods, a duplicate of such form or certificate, and the same shall be furnished with the following declaration recorded in red ink and signed by the dealer or authorised officer or the Government, as the case may be, on all the three portions of such form or certificate,-
“I hereby declare that this is the duplicate of the declaration form/certificate No…………………..signed on……………and issued to………………………………who is a registered dealer of……………..(State) and whose registration certificate number is………………”
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m the department prescribed under the State's taxation law. The C Form is a declaration to be issued only by the Sales Tax Authorities of the States concerned. By issuing declaration in C Form the purchasing dealer would be benefited as he is entitled to purchase goods by paying only concessional rate of tax of 4% as prescribed by the State concerned of the purchasing dealer otherwise the purchasing dealer has to pay tax at a higher rate besides additional taxes on such sales effected within the State where the selling dealer is situated.”
18. Thus, the declaration (C Forms) are required by the registered dealer to purchase goods from other States at concessional tax rate under the CST Act, 1956. C Form is prescribed under Rule 12(1) of the Rules of 1957 as a declaration form for the purpose as specified under Section 8(4) of the CST Act, 1956 and if the registered dealer fails to procure C Form from the respondents / State and thereafter, do not provide C Form to the supplier/se
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speed diesel;
(iii) motor spirit (commonly known as petrol);
(iv) natural gas;
(v) aviation turbine fuel; and
(vi) alcoholic liquor for human consumption”
21. Thus, the amended definition of goods under the CST Act, 1956 includes high speed diesel and by virtue of the said amendment, the definition of “goods” given under the CST Act stands amended whereby high speed diesel was kept under the meaning of goods amongst other five items.
22. The Central Goods and Services Tax Act, 2017 was promulgated and brought into force with effect from 1-7-2017, which is an Act to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government and the matters connected therewith or incidental thereto. Likewise, the Chhattisgarh Goods and Services Tax Act, 2017 (for short, 'the Chhattisgarh GST Act, 2017') was promulgated and brought into force with effect from 1-7-2017 which is also an Act to make a provision for levy
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eto.
23. At this juncture, it would be appropriate to notice the repeal and saving provision of the CGST Act, 2017 i.e. Section 174 of the CGST Act, 2017, which provides as under: –
“174. Repeal and saving.-(1) Save as otherwise provided in this Act, on and from the date of commencement of this Act, the Central Excise Act, 1944 (1 of 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955), the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), and the Central Excise Tariff Act, 1985 (5 of 1986) (hereafter referred to as the repealed Acts) are hereby repealed.
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx”
24. The aforesaid provision of the CGST Act, 2017 contains a provision pertaining to repeal and saving. It is pertinent to not
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1936 (30 of 1936), (hereinafter referred to as the repealed Acts) are hereby repealed.”
26. The aforesaid provision of the State Act clearly provides that the Chhattisgarh Value Added Tax Act, 2005 shall apply only in respect of goods included in Entry 54 of the State List of the Seventh Schedule to the Constitution. Entry 54 of the State List of the Seventh Schedule to the Constitution of India as amended by the Constitution (One Hundred and First Amendment) Act, 2016, states as under: –
“54. Taxes on the sale of petroleum, high speed diesel, motor spirit (commonly known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including sale in the course of inter- State trade of commerce or sale in the course of international trade or commerce of such goods.”
27. Thus, from the aforesaid analysis, it is quite vivid that the Chhattisgarh Value Added Tax Act, 2005 has not been repealed qua the items specified under the amended Entry 54 of
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notified by the Government on the recommendations of the Council.”
30. Sub-section (2) of Section 9 of the CGST Act, 2017 and the Chhattisgarh GST Act, 2017 clearly provide that GST on crude oil, high speed diesel, aviation turbine, motor spirit (petrol) shall be levied with effect from the date as may be notified by the Government on the recommendations of the GST Council. Therefore, the CGST Act, 2017 has kept the aforesaid six goods away from the ambit of the CGST Act, 2017 and no notification has been issued by the Central Government on the recommendation of the GST Council imposing GST on high speed diesel at a prescribed rate.
31. Thus, the net effect of the aforesaid discussion is that after the promulgation of the CGST Act, 2017 and the State Act, the items mentioned in the amended Entry 54 of the State List of the Seventh Schedule to the Constitution are governed by the CST Act, 1956, as no notification has been issued even under Section 9(2) of the CGST Act, 2017 by the C
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the petitioner is entitled to be issued 'C' Forms in respect of the natural gas purchased by it in the course of interstate sales and used by it for the generation of electricity. …”
33. The Division Bench speaking through Avneesh Jhingan, J, held at the end of para 17 as under: –
“It is pertinent to note that till date, the Government has not issued a notification under either the CGST Act or the HGST Act. Hence inter-state sale of natural gas continues to be governed by the CST Act.”
34. Their Lordships finally directed the State authorities to issue 'C' Forms by holding as under: –
“28. In these circumstances, the writ petition is allowed. It is 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. …”
35. I respectfully agree and follow the principle of law laid d
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ecommendation of the GST Council would be necessary to be notified by the Central Government, neither the GST Council has recommended levy of GST on high speed diesel nor it has been notified by the Central Government particularly when prior to introduction of GST with effect from 1-7-2017, the competent legislature has already amended the definition of “goods” under Section 2(d) of the CST Act, 1956 and purposefully amended the definition of “goods” mentioning the same items which are barred under Section 9(2) of the CGST Act, 2017 whereby high speed diesel is included.
37. Next submission of the learned State counsel is that after introduction and promulgation of GST, the registration certificate of the petitioner issued under the provisions of the CST Act, 1956 and the rules made thereunder would automatically stand cancelled after his migration to the GST regime, has no legs to stand. The registration certificate issued under the CST Act, 1956 can be cancelled only after the initi
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oods” as defined under the amended definition of Section 2(d) of the CST Act, 1956 including high speed diesel.
38. Further submission of the learned State counsel that since the petitioner did not avail the facility / privilege of 'C' Form with respect to high speed diesel prior to 1-7-2017, now, he cannot be allowed to use 'C' Form qua high speed diesel, deserves to be rejected, as if the petitioner is lawfully entitled and eligible for issuance of 'C' Form, he cannot be declined such facility, merely on the count that he did not avail such facility prior to 1-7-2017 as the CGST Act, 2017 or the CST Act, 1956 do not bar to avail such facility on the said ground. Non-furnishing of return by the petitioner raised by the State is equally fallacious. Even otherwise, there is no bar in the CGST Act, 2017 that the petitioner Company after migrating from the CST regime to the GST regime cannot hold registration certificate under the CST Act, 1956 confining it to the
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of the CGST Act, 2017 and therefore the Central Government has not notified high speed diesel to be within the ambit and sweep of the CGST Act, 2017. Thus, the petitioner's registration certificate under the CST Act, 1956 is still valid for the goods defined in Section 2(d) of the CST Act, 1956, including high speed diesel, and the petitioner is entitled for issuance of C-Form for inter-State purchase / sale of high speed diesel against the said C-Form. Accordingly, the respondents shall be liable and are directed to issue C-Form to the petitioner in respect of high speed diesel to be purchased by the petitioner and used in the course of manufacture of cement and for that, it is further directed to rectify and remove the error on their official website and entertain the petitioner's application submitted on-line on the official website seeking issuance of C Form to the petitioner for said goods.
40. The writ petition is allowed to the extent outlined herein-above leaving the p
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