Ultratech Cement Limited (Hirmi Cement Works) vs. State Of Chhattisgarh

Held

The Court held that the petitioner company is entitled to the issuance of C-Forms for the inter-State purchase of high-speed diesel. The reasoning was based on two primary grounds. Firstly, the CGST Act, 2017, through Section 174, did not repeal the CST Act, 1956, meaning the provisions of the CST Act remain applicable for inter-State trade concerning 'goods' as defined in Section 2(d) of the CST Act. Secondly, Section 9(2) of the CGST Act, 2017, explicitly excludes high-speed diesel from the levy of GST, as neither the GST Council recommended its inclusion nor has the Central Government notified it. The Court further clarified that the petitioner's CST registration certificate remains valid for goods defined under the amended Section 2(d) of the CST Act, 1956, including high-speed diesel, even after migrating to the GST regime, as cancellation proceedings under the CST Act, 1956, were not initiated. The Court directed the respondents to issue C-Forms to the petitioner for high-speed diesel and rectify their website to entertain the online application.

Facts

The petitioners, Ultratech Cement Limited, sought the issuance of C-Forms under the Central Sales Tax Act, 1956 (CST Act) for high-speed diesel purchased in inter-State trade for manufacturing cement. They had been issued C-Forms until June 30, 2017. Following the implementation of the Central Goods and Services Tax Act, 2017 (CGST Act) on July 1, 2017, their applications for C-Forms were rejected with an error message indicating that the invoice date should be before July 1, 2017. The petitioners argued that high-speed diesel was specifically included in the definition of 'goods' under the CST Act and was excluded from the CGST Act by Section 9(2) of the CGST Act, as the GST Council had not recommended its inclusion. The State respondents contended that upon migration to the GST regime under Section 139 of the CGST Act, the petitioner's CST registration stood cancelled, rendering them ineligible for C-Forms.

Key Issues

1. Whether the petitioner company is entitled to be issued C-Form under the Central Sales Tax Act, 1956 read with the Central Sales Tax (Registration and Turnover) Rules, 1957, in respect of high-speed diesel purchased in the course of inter-State trade and used in manufacturing, after the promulgation of the Central Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner contended that their registration under the CST Act, 1956 is valid, and the definition of 'goods' under Section 2(d) of the CST Act, 1956 was amended to include high-speed diesel. They further argued that Section 9(2) of the CGST Act, 2017 excludes high-speed diesel from GST as the GST Council has not recommended its inclusion. Therefore, they are entitled to C-Forms under Section 8(3)(b) of the CST Act, 1956. Revenue/State's arguments: The State respondents argued that the petitioner migrated to the GST regime under Section 139 of the CGST Act, 2017, which automatically cancelled their CST registration. Consequently, they are not entitled to C-Forms or the benefit of concessional tax rates under the CST Act, 1956.