M/S Singhal Builders Contractors vs. State Of Rajasthan

Held

The Court held that the respondents are liable to issue 'C' forms to the petitioner for the procurement of High Speed Diesel (HSD) for mining purposes through inter-state trade. The reasoning was that HSD, along with other petroleum products, was retained in the amended definition of 'goods' under the CST Act and was also listed in Section 9(2) of the GST Act as items to be brought under GST by notification. However, no such notification had been issued by the government till date. Therefore, inter-state sales of HSD continued to be governed by the CST Act. The Court found no distinction between the petitioner's case and the case of *Carpo Power Limited*, where the Punjab & Haryana High Court had allowed the issuance of 'C' forms for natural gas. The Court also noted that the petitioner's registration under Section 7(2) of the CST Act was still valid and had not been cancelled. The ratio decidendi is that in the absence of a specific notification bringing HSD under GST, the provisions of the CST Act, including the entitlement to 'C' forms for concessional tax rates, remain applicable. The Court directed that if the petitioner had paid any excess tax due to the wrongful refusal to issue 'C' forms, they would be entitled to a refund or adjustment, to be processed within twelve weeks of their claim being made with requisite documents.

Facts

The petitioner, M/s Singhal Builders Contractors, sought a writ directing the respondents (State of Rajasthan and its authorities) to issue 'C' forms for the procurement of High Speed Diesel (HSD). The petitioner requires HSD for running heavy equipment in mining operations and is entitled to procure it at a concessional rate of 2% sales tax under Section 8(1) and (3) of the Central Sales Tax Act, 1956 (CST Act), by furnishing a 'C' form to the vendor as per Section 8(4). The grievance arose because the respondents refused to issue 'C' forms for HSD, which the petitioner contended would lead to a higher tax liability of 24% CST. The petitioner argued that HSD, despite the implementation of the Goods and Services Tax (GST) Act, 2017, remained taxable under the CST Act as no notification had been issued to bring it under GST as per Section 9(2) of the GST Act.

Key Issues

1. Whether the respondents are liable to issue 'C' forms to the petitioner for the procurement of High Speed Diesel (HSD) for mining purposes, considering the implementation of the GST Act, 2017, and the continued applicability of the CST Act, 1956, for HSD. (Question of law) Petitioner's arguments: The petitioner contended that HSD was not brought under the purview of the GST Act by any notification issued under Section 9(2) of the GST Act. Therefore, the CST Act, 1956, continued to govern inter-state sales of HSD. They relied on Section 8(4) of the CST Act, which mandates the issuance of 'C' forms for concessional tax rates, and cited the Punjab & Haryana High Court's decision in *Carpo Power Limited Vs. State of Haryana* which allowed the issuance of 'C' forms for natural gas. The petitioner also pointed out that the definition of 'goods' in Section 2(d) of the CST Act, as amended by the Taxation Laws (Amendment) Act, 2017, specifically included HSD, and their registration under Section 7(2) of the CST Act remained valid. Respondents' arguments: The respondents, while not disputing the identical nature of the issue, submitted that some grounds were not brought to the notice of the Court in the *Carpo Power Limited* case. They alluded to amendments brought about by the Taxation Laws (Amendment) Act, 2017, to Section 2(d) of the CST Act and sought clarification on the definition of 'goods' in Section 8(3)(b) of the CST Act. However, the judgment indicates that the respondents' specific arguments were addressed by the cited precedents.