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IN THE HIGH COURT OF JUDICATURE AT MADRAS
K. RAVICHANDRABAABU, J.
Ramco Cements Ltd Rep By Its General Manager-Legal T Mathivanan - Appellant
Versus
Commissioner of Commercial Taxes - Respondent
W.P.No.19458, 19459, 19460, 19584, 20845, 22034, 23491, 23497, 23830, 23944, 24024, 24051, 24554, 24707, 24708, 24996, 24997, 25184, 25290, 25291, 25316, 25317, 25618, 25622, 25627, 25634, 25695, 25698, 25700, 25709, 25724, 25859, 25867, 26131, 26135, 26219, 26220, 26226, 26232, 26241, 26242, 26245, 26251, 26253, 26254, 26262, 26270, 26287, 26420, 26476, 26481, 26489, 26727, 26738, 26752, 26764, 26805, 26879, 27037, 27048, 27054, 27061, 27568, 27616, 27625, 27708, 28002, 28015, 28024, 28030, 28033 of 2018 & Writ Miscellaneous Petition No. 22887, 22888, 22889, 22890, 23014, 23015, 23016, 25827, 25828, 25829, 27403, 27404, 27405, 27411, 27412, 27413, 27764, 27765, 27766, 27887, 27888, 27889, 27986, 27987, 27988, 28023, 28024, 28025, 28584, 28585, 28586, 28742, 28743, 28744, 28745, 28746, 28747, 29032, 29033, 29034, 29035, 29036, 29037, 29272, 29273, 29274, 29407, 29408, 29409, 29410, 29411, 29412, 29794, 29798, 29801, 29803, 29807, 29811, 29813, 29818, 29822, 29888, 29890, 29891, 29894, 29896, 29897, 29900, 29903, 29904, 29905, 29911, 29915, 29922, 29923, 29926, 30057, 30060, 30063, 30065, 30347, 30351, 30436, 30438, 30439, 30440, 30441, 30443, 30451, 30452, 30457, 30462, 30464, 30468, 30473, 30474, 30477, 30479, 30480, 30481, 30482, 30485, 30487, 30494, 30495, 30497, 30498, 30499, 30500, 30501, 30504, 30508, 30510, 30512, 30515, 30521, 30523, 30531, 30535, 30540, 30777, 30781, 30783, 30785, 30787, 30789, 30805, 30807, 30810, 31091, 31092, 31094, 31158, 31160, 31162, 31220, 31224, 31225, 32098, 32102, 32106, 32153, 32157, 32159, 32182, 32183, 32185, 32223, 32226, 32228, 32578, 32580, 32581, 32591, 32595, 32597, 32606, 32608, 32611, 32617, 32619, 32621, 32627, 32628 & 32630 of 2018
Decided on : 26-10-2018
The Court held that dealers who are not dealing in petroleum products but are using them for mining, generation/distribution of electricity or in telecommunication network are entitled to issue 'C' declaration forms and purchase petroleum products at concessional rate of 2% under Section 8(3)(b) of the Central Sales Tax Act, 1956.
Fact of the Case:
The petitioners, who were engaged in various activities such as mining, manufacturing, and production of poultry feed, challenged the impugned circular issued by the Commissioner of Commercial Taxes, which restricted the issuance of 'C' declaration forms for the purchase of petroleum products at a concessional rate of 2% to dealers dealing only in six specified goods. The petitioners contended that they were entitled to the benefit under Section 8(3)(b) of the Central Sales Tax Act, 1956, which allowed dealers to purchase goods for use in mining, generation/distribution of electricity, or telecommunication network at a concessional rate, irrespective of the nature of goods dealt with by them.
Finding of the Court:
The Court found that Section 8(3)(b) of the Central Sales Tax Act, 1956, which entitled the petitioners to issue 'C' declaration forms and purchase petroleum products at a concessional rate, had not been amended and was still in force. The Court held that the definition of 'goods' under Section 2(d) of the Act, which was amended to include only six specified goods, did not affect the provisions of Section 8(3)(b). The Court further held that the impugned circular issued by the Commissioner of Commercial Taxes was without jurisdiction and violative of the principles of natural justice.
Issues: 1. Whether dealers who are not dealing in petroleum products but are using them for mining, generation/distribution of electricity or in telecommunication network are entitled to issue 'C' declaration forms and purchase petroleum products at concessional rate of 2% under Section 8(3)(b) of the Central Sales Tax Act, 1956? 2. Whether the impugned circular issued by the Commissioner of Commercial Taxes, which restricted the issuance of 'C' declaration forms for the purchase of petroleum products at a concessional rate of 2% to dealers dealing only in six specified goods, was valid?
Ratio Decidendi: The Court held that the definition of 'goods' under Section 2(d) of the Central Sales Tax Act, 1956, which was amended to include only six specified goods, did not affect the provisions of Section 8(3)(b). The Court reasoned that Section 8(3)(b) specifically allowed dealers to purchase goods for use in mining, generation/distribution of electricity, or telecommunication network at a concessional rate, irrespective of the nature of goods dealt with by them. The Court further held that the impugned circular issued by the Commissioner of Commercial Taxes was without jurisdiction and violative of the principles of natural justice, as it denied the benefit under Section 8(3)(b) to the petitioners without providing them an opportunity to be heard.
Final Decision: The Court allowed the writ petitions and set aside the impugned circular. The Court directed the respondents to permit the petitioners to download 'C' forms, as has been done in the past for the purpose of purchasing petroleum products against the issuance of 'C' declaration forms.
K. RAVICHANDRABAABU, J.
1. In all these writ petitions, filed by individual petitioners, the common grievance expressed before this Court is against the letter dated 31st May 2018 issued by the Commissioner of Commercial Taxes, Chepauk, Chennai-5 to all Joint Commissioners of his territorial jurisdiction, individual communication dated 17.07.2018 and a notice dated 17.07.2018.
2. Through the said letter dated 31.05.2018, the Commissioner of Commercial Taxes informed all Joint Commissioners that any dealer, who deals in petroleum crude, high speed diesel, motor spirit (petrol), Aviation Turbine Fuel, Natural gas and Liquor, are alone entitled to effect purchases from other State by availing the concessional rate of tax. In other words, according to the Commissioner of Commercial Taxes, those dealers, who are not dealing in those goods are not eligible to purchase those six goods at the concessional rate of tax at 2% by issue of 'C' Form declaration, as they are trading or manufacturing those goods that are administered under GST Act, 2017. Thus, the Commissioner of Commercial Taxes directed all the Joint Commissioners to issue necessary instructions to the Assessing Officers concerned that wherever approval is required for generation of 'C' Forms, they should approve after verifying the eligibility for issuing those declarations. In the very same letter, the Commissioner of Commercial Taxes informed that dealers, coming under the following categories, are entitled to purchase petroleum products and alcoholic liquors as they are dealers in those six commodities.
"1. Major Oil Companies that included IOC, BPCL, HPCL, Shell Reliance Industries, ONGC.
2. Major Distilleries that included Golden Vats, SNJ Distilleries and TASMAC.
3. Major Hotels that included ITC, Oriental Hotels, Crown Plaza, GRT Hotels, SAS Hotels Enterprises. TAJ GVK Hotels, Hablis Hotels etc.
4. Major Clubs, Resorts, Cultural Associations that included Presidency Club, Madras boat Club, Madras Gymkhana Club, Ootacamund Club, Andhra Social Cultural Association, Ideal Beach Resorts, etc."
3. Thus, the Commissioner of Commercial Taxes excluded the following category, as not entitled to purchase petroleum products as the goods manufactured by persons falling under the following category are being taxed under GST.
"Other Dealers not related to the above category being Spinning Mills, Blue Metal crusher Unit, ILFS Tamil Nadu Power Company, Housing Promoters, Cement Companies (Ramco Cement), Mines, Nuclear Power Corporation etc."
4. In the impugned communication dated 17.07.2018 issued to the individual writ petitioners, the Revenue informed the respective writ petitioners that they cannot generate online 'C' Forms from 01.07.2017 for those six commodities, which are not under the GST Act, 2017 and that the Government did not amend Section 8(3)(b) of the CST Act, 1956 for the reason that once Section 2(d) of the Section CST Act declares which are the commodities comes under the definition of the goods then, automatically, only those goods can be purchased using 'C' Forms.
5. The impugned notice dated 17.07.2018 called upon the respective petitioner to file their objections as to why penalty should not be levied as they have generated 'C' Forms for purchasing HSD, which is ineligible.
6. As all these writ petitions project a common cause aggrieved against the above proceedings of the Revenue, I take the leading case in W.P.Nos.19458 of 2018 to 19460 of 2018 for discussing the facts and circumstances, which warranted filing of these writ petitions.
7. The case of the petitioners is as follows:
(a) The petitioner is engaged in mining of lime stone and manufacture of cement in the State of Tamil Nadu. The petitioner was registered under the Tamil Nadu Value Added Tax Act, 2006 and Central Sales Tax Act, 1956. The petitioner is also registered under the Tamil Nadu Goods and Services Tax Act, 2017 and Central Goods and Service Tax Act, 2017 and Integrated Goods and Services Tax Ac
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