Gravita INDIA Limited vs. Union Of INDIA

CW/9749/2020HC RajasthanGSTCNR RJHC02049518202030 September 2020Bench: SANJEEV PRAKASH SHARMA3 pages

AI SummaryAllowed

Facts

The petitioner, Gravita India Limited, sought directions from the Rajasthan High Court to issue C-Forms for High Speed Diesel (HSD) procured for use as raw material in manufacturing. The petitioner intended to purchase HSD through inter-state trade under the concessional Central Sales Tax (CST) rate of 2%, as per Section 8(1) read with Section 8(3) of the CST Act, 1956. The petitioner also requested directions for the respondents to frame guidelines for issuing C-Forms to manufacturers purchasing goods still covered under the CST Act for manufacturing other goods. The respondents opposed the petition on merits but admitted that the issue was covered by previous judgments.

Held

The Court allowed the writ petition, holding that the respondents are liable to issue C-Forms for the purchase of High Speed Diesel procured by the petitioner-company for mining purposes from inter-state trade. The Court relied on the Division Bench judgment in The State of Rajasthan & Others Versus ASI Industries Limited & others (decided on 16.7.2019), which was followed by coordinate benches and for which an SLP was dismissed by the Supreme Court. The reasoning was that the denial of C-Forms was due to the exigencies of the GST regime, which inadvertently rendered CST registrations ineffective. The Court further directed that if the petitioner had paid any amount due to the wrongful refusal to issue C-Forms, they would be entitled to a refund or adjustment from the concerned authorities, who were directed to process the claim within 12 weeks. The issue regarding framing guidelines for C-Forms was implicitly addressed by allowing the issuance of C-Forms in this specific case.

Key Issues

1. Whether the petitioner is entitled to the issuance of C-Forms for the procurement of High Speed Diesel as a raw material for manufacturing activities, enabling them to avail the concessional CST rate of 2% under Section 8(1) read with Section 8(3) of the CST Act, 1956? 2. Whether the respondents are obligated to frame guidelines regarding the issuance of C-Forms to manufacturers purchasing goods covered under the CST Act for manufacturing other goods? Petitioner's arguments: The petitioner contended that HSD is being procured for use as a raw material in their manufacturing activities and that they are eligible for the concessional CST rate. They relied on the principle that denial of C-Forms was an exigency due to the advent of the GST regime, which rendered CST registrations ineffective inadvertently. Respondents' arguments: The respondents opposed the petition on merits but conceded that the issue was already decided by a Division Bench of the High Court and followed by other coordinate benches. They did not present any independent arguments against the petitioner's entitlement to C-Forms based on the precedents.

Sections Cited

Section 8(1), Section 8(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Writ Petition No.9749/2020 Gravita India Limited, Registered Office At Saurabh Farms, Chittora Road, Harsulia Mod Diggi Malpura Road, Tehsil Phagi, Jaipur, Rajasthan, 303904 Through Its Authorised Signatory Krishan Kumar Gupta, S/o Shiv Charan Gupta, R/o B-48 Opp. S.j. Public School, Janta Colony, Jaipur, Rajasthan, 302004 ----Petitioner Versus 1. Union Of India, Through Secretary, Ministry Of Finance (Department Of Revenue), No. 137, North Block, New Delhi 110001. 2. Commissioner, Commercial Taxes Department, Rajasthan, Jaipur, Kar Bhawan, Bhawani Singh Road, Ambedkar Circle, C-Scheme, Jaipur. 3. Commercial Tax Officer, State Goods And Service Tax Department, Jaipur Ii Special X, Jaipur, Rajasthan ----Respondents For Petitioner(s) : Mr. Mohit Khandelwal For Respondent(s) : Mr. R.B. Mathur HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA

Order 30/09/2020

The petitioner by way of this petition has prayed as under:- “1. That the Respondents are directed to issue C- Forms in respect of the High Speed Diesel procured/purchased by the Petitioner Company from the Oil Companies to use it as a raw material for carrying out manufacturing activities.

That the Petitioner be permitted to procure the High Speed Diesel through the inter-state purchase under the Concessional CST rate of 2 percent in accordance with section 8(1) r/w section 8(3) of the CST Act, 1956. (2 of 3) [CW-9749/2020]

That the Respondent No. 1 to 3 are directed to frame the guidelines and rules regarding the issuance of C-Form to manufacturers purchasing the Goods, still covered under the CST Act, for carrying out manufacturing of other goods.

That the oil companies be directed to allow the Petitioner to procure/purchase the High Speed Diesel at concessional rate of tax.

Any other order or direction which this Hon’ble Court may deem fit, just and proper in the facts and circumstances of the case may also be passed in favour of the petitioner.”

The issue involved in the present writ petition is no more res integra in view of the judgment passed by the Division Bench of this court in D.B. Special Appeal (Writ) No.41/2019 titled as The State of Rajasthan & Others Versus ASI Industries Limited & others decided on 16.7.2019, which has been followed by this court as well as the other co-ordinate Benches of this court.

Although, learned counsel for the respondents has opposed on merits of the case, but frankly admits that the issue stands already covered and decided by the Division Bench of this court and followed by the co-ordinate Benches.

The Division Bench in the case of The State of Rajasthan (supra) has observed as under:- “4. This Court has been informed that the special appeal preferred by the State of Haryana against the decision in Carpo Power Limited (supra) (in SLP No.20572/2018), was rejected on 13.08.2018. 5. The learned Single Judge in this case relied upon decision in Hindustan Zinc Limited Versus The State of Rajasthan & Ors. 2019 (64) GSTR 366 (Raj.), decided on 18.05.2018 where a direction was issued to the State of Rajasthan, to provide relief. This Court notices that in Hindustan Zinc Limited (supra) also relied upon Carpo Power Limited. Further, other High Courts to have followed the said ruling in Carpo Power Limited

(3 of 3) [CW-9749/2020] (supra)-the Madras High Court, in the Ramco Cements (64) GSTR 374 (Mad); the Orissa High Court in N.K. Bhojani (P) Ltd. Versus Commissioner of Commercial Taxes 2019 (24) GSTL 28; and Star Cement Meghalaya & Ors. Versus State of Assam & Ors., 2019 (21) GSTL

484.6.

In the light of the above discussion, this Court is of the opinion that denial of C Forms is purely on account of exigencies of advent of the GST regime which compelled the assessee to migrate to and obtain GST Registrations which rendered at the same time its CST registrations ineffective. This was inadvertent and beyond its control.”

It is also informed by the learned counsel for the petitioner that the SLP has already been dismissed by the Supreme Court against the judgment passed by the Division Bench.

Keeping in view the above, the present writ petition is allowed and the respondents are held liable to issue C-Form in the purchase of High Speed Diesel procured by the petitioner- company for mining purposes from inter-state trade.

In the event of the petitioner having paid any amount on account of respondents wrongfully refusal to issue C-Form, the petitioner would be entitled to refund/ adjustment of the same from the concerned authorities and collect the taxes. The concerned authorities are directed to process the claim within 12 weeks from today.

The writ petition is accordingly allowed.

No costs. (SANJEEV PRAKASH SHARMA),J Karan Bhutani /46

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.