Thriveni Sainik Mining Private Limited Represented Thr Its Representative Sri Alagappan Subramanian vs. The State Of Jharkhand Through The Pr Secretary Cum Commissioner Commercial Taxes Deptt

Held

The Court held that the expression 'goods' appearing in the second half of Section 8(3)(b) of the CST Act may not necessarily mean 'goods' as defined under Section 2(d) of the CST Act. The reasoning in Paragraph-18 of the Supreme Court's judgment in Printers (Mysore) Ltd.'s case was found to be fully applicable, establishing that the term 'goods' in that specific context could encompass manufactured goods even if they did not strictly fit the definition in Section 2(d). Furthermore, the Court held that registration of a dealer under Section 7(2) of the CST Act is not contingent upon their liability to pay tax. Dealers are entitled to remain registered irrespective of whether they are liable to pay tax. Consequently, the circular dated October 11, 2017, which sought to terminate registrations based on non-liability, was quashed. The Court directed that Form-C, already issued, should be given effect to, and any required refund should be provided to the petitioners. Oil companies that had deposited taxes were also held entitled to claim refunds. The Court clarified that while appropriate action could be taken against individual dealers for misutilization of Form-C after due process, a blanket denial of the benefit was impermissible.

Facts

Multiple petitioners, including Tata Steel Limited, M/s. Mahalaxmi Infracontract Pvt. Ltd., and Bharat Coking Coal Ltd., filed writ petitions challenging a circular dated October 11, 2017, issued by the State of Jharkhand's Commercial Taxes Department. This circular effectively cancelled the registration of dealers under Section 7(2) of the Central Sales Tax (CST) Act, 1956, due to their alleged non-liability to pay tax under the JVAT Act. The petitioners, who were registered dealers, argued that their registration should not be terminated solely based on their tax liability status. The dispute involved the interpretation of the term 'goods' under the CST Act and its impact on dealer registration and the issuance of Form-C.

Key Issues

1. Whether the expression 'goods' in the second half of Section 8(3)(b) of the CST Act, 1956, must necessarily refer to 'goods' as defined in Section 2(d) of the CST Act, 1956, particularly in light of the amendment to Section 2(d) restricting its definition. The petitioner argued, relying on Printers (Mysore) Ltd.'s case, that the term 'goods' in this context could refer to manufactured goods, which may not strictly fall within the definition of Section 2(d). The State contended that the amended definition of 'goods' under Section 2(d) should be applied restrictively. 2. Whether the registration of a dealer under Section 7(2) of the CST Act, 1956, is subject to their ongoing liability to pay tax, and if non-liability automatically leads to the termination of such registration. The petitioner argued, citing Commissioner of Sales Tax, M.P. Vs. Madhya Bharat Papers Ltd., that registration is independent of tax liability. The State argued that since dealers were no longer liable to pay tax under the JVAT Act, their registration under Section 7(2) should automatically cease.