M/S Chandna Granites Private Limited vs. The State Of Rajasthan Through Principal Secretary
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The petitioners are businesses engaged in quarrying and manufacturing activities in Rajasthan, registered under the Central Sales Tax Act, 1956 (CST Act), the Goods and Services Tax Act, 2017, and the Rajasthan Value Added Tax Act, 2003. They purchase High Speed Diesel (HSD) for use in their manufacturing processes in inter-state trade. Following the implementation of GST, the respondent authorities refused to issue C-Forms for these HSD purchases, which were previously available based on their CST registration. The petitioners contend they are entitled to these C-Forms. The petitions are being decided together due to common facts and legal questions.
Held
The Court allowed the writ petitions, holding that the petitioners are entitled to purchase High Speed Diesel (HSD) on the strength of their CST registration certificate and are therefore eligible for C-Forms for such purchases, even after the implementation of GST. The Court reasoned that the provisions of Section 8 of the CST Act and related rules governing C-Forms have not undergone amendment and continue to be applicable. The Court relied heavily on the decision in *Carpo Power Limited vs. State of Haryana And Ors.*, noting that the registration certificate under the CST Act remains valid unless amended or cancelled as per Section 7(4) of the Act. The Court directed that the respondents are liable to issue C-Forms to the petitioners for HSD purchased and used in their manufacturing activities. The respondents were granted liberty to proceed against assessees whose activities are not covered under Section 8 of the CST Act, in accordance with the law. No issue was expressly left undecided.
Key Issues
1. Whether the petitioners, registered under the CST Act and using High Speed Diesel (HSD) in their manufacturing activities, are entitled to purchase HSD on the strength of their CST registration certificate, despite the implementation of GST, and consequently, to be issued C-Forms for such purchases? (Question of law turning on Section 8 of the CST Act and related rules). Petitioner's arguments: The petitioners argued that the provisions of Section 8 of the CST Act, Rule 12 of the CST (R&T) Rules, and the C-Form mechanism have not been amended post-GST implementation. They relied on the Punjab and Haryana High Court's decision in *Carpo Power Limited vs. State of Haryana And Ors.*, which held that C-Forms are available for goods used in manufacturing or processing, and that the registration certificate under the CST Act, if not amended or cancelled, remains valid. They also cited a Rajasthan High Court decision in *Hindustan Zinc Limited vs. The State of Rajasthan & Ors.*. Respondent's arguments: The respondents, after initial arguments, could not distinguish the present case from the cited precedents. However, they sought liberty to proceed against assessees whose activities are not covered under Section 8(3)(b) of the CST Act.
Sections Cited
Section 8, Section 7(2), Section 7(4)
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Cause title — parties, addresses and appearances
Order 18/03/2024 AVNEESH JHINGAN, J(ORAL):-
These petitions involve common facts and question of law and are being decided by this order.
DBCWP No.8093/2018 is being taken as a lead case for the facts.
The brief facts are that the petitioners are engaged in business of quarry of Limestone, Kota Stone and manufacturing activity is carried by running a plant in the State of Rajasthan. The petitioners firm is registered dealer under the Central Sales Tax Act, 1956 (for brevity ‘CST Act’), Goods and Services Tax Act, 2017 and Rajasthan Value Added Tax Act, 2003. Registration
[2024:RJ-JP:13315-DB] (9 of 11) [CW-8093/2018] certificate of the petitioner is issued under the CST Act. The petitioner is making purchase of High Speed Diesel (for short ‘H ’) in course of inter-state trade or commerce for use in manufacturing activity. The registration under CST continued petitioners are entitled to purchase H on strength of registration certificate. After implementation of the GST, the respondents refused to issue C-Form for purchase made of H and hence, the present petition.
Rajasthan High Court in case of SBCWP No.5506/2018 titled as Hindustan Zinc Limited vs. The State of Rajasthan & Ors. and other connected matters dated 18.05.2018. 5. Learned counsel for the respondents after arguing for sometime, is not in a position to distinguish the present case vis- a-vis the citation relied upon by learned counsel for the petitioners. However, seeks liberty to proceed against the assessee in cases where the activities are not covered under Section 8(3)(b) of the CST Act.
The relevant paras of Carpo Power (supra) are quoted below:- “26. The provisions of section 8 of the CST Act, rule 12 of CST (R&T) Rules and declaration form C have not undergone any amendment after the implementation of the GST laws. There cannot be any occasion to restrict the usage of C form only for the purposes of re-sale of the six items
[2024:RJ-JP:13315-DB] (10 of 11) [CW-8093/2018] mentioned in the amended definition of "goods" in section 2(d) of the CST Act. The purchase of the said goods for purposes of re-sale, use in the manufacture or processing of goods for sale, in the tele- communications network or mining or in generation or distribution of electricity or any other form of power would qualify the purchaser for registration under section 7(2) of the CST Act. Section 7(2) does not stipulate that only a dealer liable to pay tax under the sales tax law of the appropriate State in respect of any particular goods is entitled to apply for registration. Nor does section 7(2) stipulate that an application for registration can be made or C form can be issued only in respect of the sale of the same goods prescribed in the course of an inter-State sale. A dealer liable to pay tax under the sales tax law of the appropriate State in respect of any goods would be covered by section 7(2) of the Act.
There is another aspect of the matter that the registration certificate given to the petitioner under the CST Act till date has not been cancelled. As per section 7(4) of the CST Act, the registration certificate granted has to be amended or cancelled. The said provisions have not been invoked.
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. In the event of the petitioner having had to pay the oil companies any amount on account of the first respondent's wrongful refusal to issue C forms the petitioner shall be entitled to refund and/or adjustment of the same from the concerned authorities who collected the excess tax through the oil companies or otherwise. The concerned authorities shall process such a claim within twelve weeks of the same being made by the petitioner in writing and the petitioner furnishing the requisite documents/form. ”
In view of the above, the writ petitions are allowed in the same terms as Carpo Power Limited (supra). However, the respondents shall be at liberty to proceed in accordance with law.
[2024:RJ-JP:13315-DB] (11 of 11) [CW-8093/2018]
Needless to say, the cases involving the activity not covered under the provisions of Section 8 of CST Act, the respondents shall be at liberty to proceed in accordance with law. (BHUWAN GOYAL),J (AVNEESH JHINGAN),J SIMPLE/PAYAL/37-46 Reportable:- No
Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.