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. 33,59,829/- in Central Sales Tax (CST) collected from it by M/s. Indian Oil Corporation Limited (IOCL) and deposited with the Gujarat VAT Department. The petitioner purchased Natural Gas from IOCL, Vadodara, and was charged CST at the full rate of 15% because jurisdictional authorities were not issuing 'C' Forms. Subsequently, the VAT authorities realized the error and began issuing 'C' Forms for the period from 01.10.2017 to 30.06.2019. IOCL issued certificates confirming the CST collected was deposited with the government. The petitioner submitted a refund claim on 06.08.2021, but it remained unprocessed, leading to the present petition.

Held

The Court held that the petitioner's case is covered by the binding decisions of 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 fulfilled its obligations. The Court found that the respondent-State was not following the binding decisions of this Court and the Apex Court. Citing E I DUPONT INDIA PRIVATE LIMITED & 1 vs UNION OF INDIA & 3, the Court strongly disapproved of the arbitrary act of the lower adjudicating authorities in ignoring binding precedents. 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 subsequent issuance of 'C' Forms and confirmation of deposit by the seller. (Question of law and fact) Petitioner's Arguments: The petitioner argued that its case is squarely covered by the decisions of this Court 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. They contended that the authorities are unreasonably refusing the refund despite the binding precedents and the seller's confirmation of deposit. Revenue's Arguments: The learned AGP argued that an amendment to Sub-section 3 Clause (b) of Section 8 in the Central Sales Tax Act, 1956, was made prospective and would not apply to the petitioner's case, as the dealings were prior to 28.03.2021.