Shree Super Jain Timber PVT. LTD. vs. Commissioner Delhi State Goods And Services Tax

Held

The Court allowed the petition, holding that the petitioner should not suffer due to the retrospective cancellation of the purchasing dealers' registrations. The Court found the situation unreasonable and followed its own previous judgments in Jain Manufacturing supra and Jai Gopal International supra. The Court directed that the Forms C, issued by dealers registered with the respondent whose registrations were cancelled retrospectively after the Forms C were handed over to the petitioner, shall be given effect to in accordance with law. However, acknowledging a stay of operation of the judgment in Jai Gopal International supra before the Supreme Court, the Court directed that this order would not be given effect to for a period of three months from the date of the order. After three months, the judgment would be effective unless there was any stay or other order from a higher court. The Court also noted that the petitioner would be at liberty to take all contentions in opposition to any petition preferred by the respondents in the Supreme Court.

Facts

The petitioner, Shree Super Jain Timber Pvt. Ltd., a dealer registered under the Central Sales Tax Act, 1956 in Gujarat, made inter-state sales to dealers registered in Delhi. These sales were supported by Form C, prescribed under the Central Sales Tax (Registration & Turnover) Rules, 1957. However, during assessment, the benefit of these Form Cs was denied because the Delhi-registered dealers' registrations were retrospectively cancelled. This cancellation invalidated the Forms C issued by them to the petitioner. The petitioner contended that this situation was covered by previous judgments of the Delhi High Court. The respondent (Commissioner, Delhi State Goods and Services Tax) stated that similar issues were pending before the Supreme Court and other High Court cases were adjourned awaiting that outcome.

Key Issues

1. Whether the petitioner is entitled to the benefit of Form C when the registration of the purchasing dealers in Delhi was retrospectively cancelled, thereby invalidating the Forms C issued to the petitioner? Petitioner's Arguments: The petitioner argued that the issue is squarely covered by the Delhi High Court's dicta in Jain Manufacturing (India) Pvt. Ltd. Vs. The Commissioner Value Added Tax (2016) 93 VST 326 and an order dated 23rd July, 2018 in W.P.(C) No.7563/2018 titled Jai Gopal International Impex Pvt. Ltd. Vs. Commissioner of Delhi Value Added Tax. The petitioner also contended that the question pending before the Supreme Court is not the same as the one decided by this Court. Respondent's Arguments: The respondent contended that the issue is pending in the Supreme Court, and proceedings in several similar cases before the High Court were being adjourned awaiting the Supreme Court's decision.