Legend Distilleries PVT. LTD vs. State Of Chhattisgarh

Held

The Court held that the petitioner is not entitled to the issuance of 'C' Forms for the purchase of ENA and Malt Spirit. The reasoning was based on the amended definition of 'Goods' under Section 2(d) of the CST Act, which came into effect on May 5, 2017. This amendment narrowed the definition to include specific petroleum products and 'alcoholic liquor for human consumption'. The Court, relying on the Supreme Court's judgment in *Synthetics and Chemicals Ltd and others vs. State of U.P. and others*, concluded that ENA and Malt Spirit, in their original form, are not considered alcoholic liquor fit for human consumption. Therefore, they do not fall within the amended definition of 'Goods' under the CST Act. Consequently, the petitioner is not eligible for the concessional tax treatment through 'C' Forms for these raw materials. The Court also distinguished the case of *Shree Raipur Cement Plant vs. State of Chhattisgarh*, finding it not applicable to the present facts. The petition was dismissed.

Facts

The petitioner, Legend Distilleries Pvt. Ltd., sought a direction from the Chhattisgarh High Court to issue 'C' Forms for the purchase of ENA and Malt Spirit, which are raw materials for manufacturing Indian Made Foreign Liquor (IMFL). The petitioner had been issued 'C' Forms until June 30, 2017, allowing a concessional tax rate of 2% under the CST Act. However, after the enforcement of the GST Act and an amendment to Section 2(d) of the CST Act, effective May 5, 2017, the respondents denied the issuance of 'C' Forms. The petitioner argued that since ENA and Malt Spirit are used for human consumption, they should still be covered under the definition of 'Goods' for inter-state purchases, especially as alcoholic liquor for human consumption is excluded from GST levy under Section 9(2) of the GST Act. The respondents contended that the amended definition of 'Goods' under the CST Act specifically includes only 'alcoholic liquor for human consumption', and ENA and Malt Spirit, in their original form, do not fall within this category.

Key Issues

1. Whether the petitioner is entitled to the issuance of 'C' Forms for the purchase of ENA and Malt Spirit under Section 2(d) of the CST Act, as amended, considering their use in the manufacture of IMFL for human consumption? Petitioner's arguments: The petitioner contended that ENA and Malt Spirit are used for human consumption and thus should be eligible for 'C' Forms. They argued that despite the amendment to Section 2(d) of the CST Act, alcoholic liquor for human consumption remains within the scope of 'Goods' for inter-state purchases, particularly in light of Section 9(2) of the GST Act, which exempts such liquor from GST. They relied on the decision in *Shree Raipur Cement Plant vs. State of Chhattisgarh*. Revenue/State's arguments: The respondents argued that the amended definition of 'Goods' under Section 2(d) of the CST Act specifically limits 'alcoholic liquor' to that for human consumption. They asserted that ENA and Malt Spirit, in their original form, do not qualify as alcoholic liquor for human consumption. They cited the Supreme Court's decision in *Synthetics and Chemicals Ltd and others vs. State of U.P. and others*.