M/S Surya Roshni Limited vs. State Of Gujarat

Facts

The petitioner, M/s. Surya Roshni Limited, filed a writ petition before the Gujarat High Court seeking a refund of Rs. 1,01,98,711/-. The petitioner had purchased Natural Gas from M/s. Indian Oil Corporation Limited (IOCL) and was charged Central Sales Tax (CST) at the full rate of 15% because jurisdictional authorities were not issuing 'C' Forms. IOCL collected this CST and deposited it with the Gujarat VAT Department. Subsequently, the VAT authorities began issuing 'C' Forms for the period from 01.10.2017 to 30.06.2019. The petitioner, relying on prior High Court decisions, requested IOCL to refund the excess CST directly. IOCL issued certificates confirming the deposit of collected CST. The petitioner submitted a refund claim on 06.08.2021, which remained unaddressed by the respondents, leading to the present petition.

Held

The Court held that the petitioner's case was squarely covered by the decisions in J.K. Cement Ltd. and Udaipur Cement Works Ltd., which were confirmed by the Apex Court. The Court noted that M/s. IOCL had issued the necessary certificates and had complied with its obligations. The Court found that the respondent-State's refusal to grant the refund was arbitrary and in disregard of binding judicial precedents. The Court referred to its decision in E I DUPONT INDIA PRIVATE LIMITED & 1 vs UNION OF INDIA & 3, strongly disapproving the arbitrary act of lower adjudicating authorities in ignoring binding decisions. The Court directed the respondents to process the refund claim of the petitioner and grant the refund of the tax amount collected and deposited by the seller in accordance with law within twelve weeks. A token cost of Rs. 10,000/- was also awarded to the petitioner, to be paid along with the refund.

Key Issues

1. Whether the petitioner is entitled to a refund of the excess Central Sales Tax (CST) collected and deposited by the seller, M/s. IOCL, for the period when 'C' Forms were not issued, despite the subsequent issuance of 'C' Forms and the existence of binding judicial precedents. The petitioner argued that its case is squarely covered by the decisions in J.K. Cement Ltd. vs. State of Gujarat and Udaipur Cement Works Ltd. vs. State of Gujarat, which were upheld by the Apex Court. The petitioner contended that the authorities are arbitrarily refusing to grant the refund despite the seller having deposited the tax and the petitioner having fulfilled its part. The respondent-State argued that an amendment to Section 8(3)(b) of the Central Sales Tax Act, 1956, made prospectively, would not apply to the petitioner's transactions which occurred prior to 28.03.2021. The State contended that the amendment's prospective nature precludes its application to the petitioner's case.