M/S Bharat Aluminium Co. LTD. vs. State Of Chhattisgarh

Held

The Court held that the Petitioner is entitled to C-Forms under the CST Act, 1956 for the inter-State purchase of high-speed diesel. The Court reasoned that the CGST Act, 2017, did not repeal the CST Act, 1956, and the provisions of the CST Act remain applicable for inter-State trade concerning goods defined under Section 2(d) of the CST Act. Specifically, the amendment to Section 2(d) of the CST Act, which included high-speed diesel, was made prior to the CGST Act's commencement. Furthermore, Section 9(2) of the CGST Act explicitly excludes high-speed diesel from GST levy until notified by the Central Government on the GST Council's recommendation, which had not occurred. The Court found that the Petitioner's CST registration was not automatically cancelled upon migration to GST and could only be cancelled through prescribed proceedings under the CST Act. The Court rejected the argument that the Petitioner could not claim C-Forms for HSD because they had not availed it prior to July 1, 2017, stating that entitlement cannot be denied based on past usage. The Court directed the respondents to issue C-Forms to the Petitioner for high-speed diesel and to rectify their website to entertain the online application.

Facts

M/s. Bharat Aluminium Co. Ltd. (Petitioner) filed a writ petition challenging the denial of C-Forms for high-speed diesel (HSD) purchased in inter-State trade after July 1, 2017. The Petitioner, registered under the Central Sales Tax Act, 1956 (CST Act) and Chhattisgarh Value Added Tax Act, 2005, was issued C-Forms for HSD until June 30, 2017. Upon migration to the GST regime under the Central Goods and Services Tax Act, 2017 (CGST Act), the system showed an error message indicating that the invoice date should be before July 1, 2017, preventing the issuance of C-Forms. The Petitioner argued that HSD was amended to be included in the definition of 'goods' under Section 2(d) of the CST Act and was excluded from the CGST Act by Section 9(2) as the GST Council had not recommended its inclusion. The State (Respondents) contended that the Petitioner's migration to the GST regime automatically cancelled its CST registration, making it ineligible for C-Forms.

Key Issues

1. Whether the Petitioner, having migrated to the GST regime under the CGST Act, 2017, is still entitled to C-Forms under the CST Act, 1956 for the inter-State purchase of high-speed diesel, considering the amended definition of 'goods' in Section 2(d) of the CST Act and the exclusion of high-speed diesel from the CGST Act under Section 9(2)? Petitioner's arguments: The Petitioner argued that its CST registration remains valid for goods like high-speed diesel, which are specifically included in the amended definition of 'goods' under Section 2(d) of the CST Act and are explicitly excluded from the purview of the CGST Act by Section 9(2) due to the GST Council's non-recommendation. They contended that migration to GST does not automatically cancel their CST registration for such excluded goods, and the denial of C-Forms is illegal. Respondents' arguments: The State argued that the Petitioner's migration to the GST regime under Section 139 of the CGST Act, 2017, automatically cancelled its CST registration, rendering it ineligible for C-Forms. They also raised the point that the Petitioner had not availed C-Forms for HSD prior to July 1, 2017.