Allowed

Kottam Amapalli Gangaiah (A1) Kadapa Dt and Anr., v. the State of Ap., Rep Pp.

Andhra Pradesh HC25 Feb 2024CRLA/820/2016

Case brief

AI extract

What is this about?

The High Court allowed a writ petition filed by M/s. GAIL (India) Limited seeking a refund of excess Central Sales Tax paid on natural gas purchases. The court held that C-Forms are admissible even after assessment completion via sufficient cause and directed respondent authorities to process the refund claim based on statutory forms.

What did the court decide?

Respondents 2 and 4 directed to process the refund claim of the petitioner for years 2017-18 and 2018-19 based on statutory C-Forms and grant refund of excess tax deposited by Respondent 3.

Kottam Amapalli Gangaiah (A1) Kadapa Dt and Anr., Vs… — Cheque Dishonour | Andhra Pradesh HC (2024)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction)

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WEDNESDAY, THE THIRTEENTH DAY OF MARCH TWO THOUSAND AND TWENTY FOUR

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PRESENT THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO AND

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THE HONOURABLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA

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WRIT PETITION NO: 17915 OF 2022

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Between:

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M/s. GAIL (INDIA) Limited, (A Government of India Undertaking) Rep. by its Chief General Manager (O and M and OIC), Mr. K V S Rao GAIL Bhavan, A.V. Appa Rao Road Raj amahendravaram-533103 E.G.Dist., A.P. Having its Corporate Office at 16, Bhikaiji Cama Place, R. K.’ Puram, New Delhi, 110066.

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...Petitioner

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AND

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The State of Andhra Pradesh, Rep. by its Principal Secretary to Government, Secretariat, Velagapudi, Amaravati, Guntur Dist., A.P.

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Deputy Commissioner (CT), Commercial Tax Department, Government of Andhra Pradesh, 10-355, 1®‘ and 2"^ Floor, CT Complex, Ramanayyapeta, Kakinada - 533005.

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M/s Oil and Natural Gas Corporation, Godavari Bhavan Base Complex, Rajahmundry East Godavari District, Andhra Pradesh - 533106.

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The Commercial Tax Officer/ Assistant commissioner (ST), Alkat Gardens Circle, 46-7-22, 4th Floor, jetty Towers, Danavaipet, Rajahmundry- 533103. A.P.

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...Respondents

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2021 (Ex. P-2), passed by the 2"^^ Respondent, under the Central Sales Tax Act, 1957, hereinafter referred to as the Act, as illegal, arbitrary, contrary to the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgments of the Hon'ble Apex Court and Hon'ble Gujarath High Court and against the principles of natural justice, consequently b)the 2"'^ Respondent may be directed to forthwith process the refund claims of the Petitioner and grant refund of the excess CST amount of Rs. 168,78,52,079/collected from the Petitioner and remitted by the 3'^ Respondent, against the sales of the natural gas by the 3'"^ Respondent to the Petitioner, during the period from 01-07-2017 to 31-12-2019, or alternatively, c)the 3^^ Respondent may be directed to submit the C-Forms furnished by the Petitioner to the 3'^'^ Respondent for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-12-2019, consequently, the 4^ Respondent or any other appropriate authority may be directed to.

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Counsel for the Petitioner: SRI A.SARVESWAR RAO

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Counsel for the Respondents: GP FOR COMMERCIAL TAX

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Counsel for the Respondents: SRI D.S.SIVADARSHAN

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The Court made the following order:

[3417]

APHC010243752022

■

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI

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(Special Original Jurisdiction)

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WEDNESDAY, THE THIRTEENTH DAY OF MARCH TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO

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THE HONOURABLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA

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WRIT PETITION NO: 17915/2022

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Between:

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1.M/S. GAIL (INDIA) LIMITED,, (A GOVERNMENT OF INDIA UNDERTAKING) REP. BY ITS CHIEF GENERAL MANAGER (O AND M AND OIC), MR. K V S RAO GAIL BHAVAN, A.V. APPA RAO ROAD RAJ AMAHENDRAVARAM-533103 E.G.DIST., A.P. HAVING ITS CORPORATE OFFICE AT 16, BHIKAIJI CAMA PLACE, R. K. PURAM, NEW DELHI, 110066.

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...PETITIONER

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AND

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1.THE STATE OF ANDHRA PRADESH, REP. BY ITS PRINCIPAL SECRETARY TO GOVERNMENT, SECRETARIAT, VELAGAPUDI, AMRAVATHI, GUNTUR DIST., A.P.

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2.DEPUTY COMMISSIONER CT, COMMERCIAL TAX DEPARTMENT, GOVERNMENT OF ANDHRA PRADESH, 10-355, 1 AND 2' FLOOR, CT COMPLEX, RAMANAYYAPETA, KAKINADA - 533005.

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3.M/S OIL AND NATURAL GAS CORPORATION, GODAVARI BHAVAN BASE COMPLEX, RAJAHMUNDRY EAST GODAVARI DISTRICT, ANDHRA PRADESH - 533106.

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4.THE COMMERCIAL TAX OFFICER/ ASSISTANT COMMISSIONER ST, ALKAT GARDENS CIRCLE, 46-7-22, 4TH FLOOR, JETTY TOWERS, DANAVAIPET, RAJAHMUNDRY-533103. A.P.

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...RESPONDENT(S):

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or order or direction more particularly in the nature of a WRIT of MANDAMUS declaring that a)the Endorsements in Ref. R1.97/2021, Dt. 21-08-2021 (Ex. P-1) and in Ref. R1.98/2021, Dt. 21-08-2021 (Ex. P-2), passed by the 2nd Respondent, under the Central Sales Tax Act 1957, hereinafter referred to as the Act, as illegal, arbitrary, contrary to the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgements of the Hon'ble Apex Court and Hon'ble Gujarath High Court and against the principles of natural justice, consequently b)the 2nd Respondent may be directed to forthwith process the refund claims of the Petitioner and grant refund of the excess CST amount of Rs. 168,78,52,079/collected from the Petitioner and remitted by the 3' Respondent, against the sales of the natural gas by the 3' Respondent to the Petitioner , during the period from 01-07-2017 to 31-12-2019, or alternatively, c)the 3rd Respondent may be directed to submit the C-Forms furnished by the Petitioner to the 3rd Respondent for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-12-2019, consequently, d) the 4th Respondent or any other appropriate authority may be directed to pass

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lA NO: 1 OF 2023

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to receive the counter copies on record by allowing the leave petition in the above writ petition

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lA NO: 2 OF 2023

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to direct the 3rd Respondent to file a representation(s)^underRule 12(7) of the CST (R&T) Rules before the 4th Respondent, seeking re-opening of the Assessments for the years 2017-18 and 2018-19, and consequently consider the C forms issued by the Petitioner for such years, which are already on the records of the 4th Respondent, in the assessment files, as per the provisions of Section 8(1) and 8(3) of the CST^Act

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lA NO: 3 OF 2023

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Petition under Section 151 CPC praying that in the^{circumstancesstated} in the affidavit filed in support of the petition, the High Court may be pleased to direct the 4th Respondent to pass appropriate re-assessment orders for the years 2017-18 and 2018-19 by considering the C forms submitted by the Petitioner and to pass fresh orders by granting concessional rate of tax as per the provisions of Section 8(1) of the CST Act and pass

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Counsel for the Petitioner:

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1.ASARVESWAR RAO

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Counsel for the Respondent(S):

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1.GP FOR COMMERCIAL TAX

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2.D S SIVADARSHAN

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The Court made the follovtring:

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ORDER: {Per Honourable Smt. Justice Venkata Jyothirmai Pratapa)

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This Writ Petition is filed under Article 226 of Constitution of India with the following prayer:

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to issue a writ or order or direction more particularly^inthe nature of a WRIT of MANDAMUS declaring that

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a) the Endorsements in Ref. R1.97/2021, Dt. 21-08-2021 (Ex. P-1) and in Ref. R1.98/2021, Dt. 21-08-2021 (Ex. P-2), passed by Respondent No.2, under the Central Sales Tax Act, 1957, hereinafter referred to as the Act, as illegal, arbitrary, contrary to the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgements of the Hon’ble Apex Court and Hon'ble Gujarath High Court and against the principles^ofnatural justice, consequently b) Respondent No.2 may be directed to forthwith process^the refund claims of the Petitioner and grant refund of the excess CST amount of Rs. 168,78,52,079/collected from the Petitioner and remitted by Respondent No.3, against the sales of the natural gas by Respondent No.3 to the Petitioner, during the period^from01-07- 2017 to 31-12-2019, or alternatively.

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c) Respondent No.3 may be directed to submit the C-Forms furnished by the Petitioner to Respondent No.3 for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-122019, consequently,

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d) Respondent No.4 or any other appropriate authority may be directed to pass appropriate Assessment and / or refund Order and to refund the excess CST amount of Rs. 168,78,52,079/- collected from the Petitioner and remitted by Respondent No.3, against the sales of the natural gas by Respondent No.3 to the Petitioner, during the period from 01-07-2017 to 31-12-2019.”

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2. The case put up by the Petitioner, in brief, is as follows;

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a. Petitioner/M/s.GAIL (INDIA) Limited is a Government Company, having its registered office at New Delhi, with plants at Pata in Uttar Pradesh and at Vijaipur in Madhya Pradesh. Petitioner purchased natural gas from Respondent No.3 - M/s. Oil and Natural Gas Corporation^ during the period from July 2017 to December, 2019 and paid Central Sales Tax^ @ 14.5%, through the Respondent No.3. Petitioner used the natural gas purchased from Respondent No.3 in the manufacture of C2/C3 Mix and the manufacturing of Polymers and other finished goods, which constitutes an inter-state sale of goods, eligible to be taxed @2% under CST, vide Sections 8 Section 8(1) and (3) of Central Sales Tax Act, 1956.3 As such, the Petitioner is entitled to the refund on the excess paid thereon,

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b. Petitioner requested the Respondent No.3 to pursue the matter with the Department to claim refund of excess CST paid and thereafter submitted copies of C-Forms to Respondent No.3, for onward submission to the Department for

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’ in short ‘ONGC’

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2 in short 'CST 3 in short ‘CST Act’

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considering the concessional rate of tax. Petitioner was informed by the Respondent No.3 that the tax collected @ 14.5% was remitted to the Department. Thereafter, Petitioner filed a refund claim before Respondent No.2the Deputy Commissioner, Commercial Tax Department, who in turn disposed of the refund claim, with certain directions as to submitting the C-Forms through Respondent No.3 and to then claim the refund.

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c. Petitioner again made correspondence with Respondent No.3 requesting to file the C-Forms before the Authorities and to file refund applications. Petitioner is entitled to the refund and not Respondent No.3, and any contrary view would be hit by the principles of unjust enrichment. To support this contention, reliance is placed on the decision of State of Madhya Pradesh v. Vyankatlal and others.'^

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d. Prior to introduction of the Goods and Services Tax® regime. Petitioner was purchasing natural gas from Respondent No.3 at Rajahmundry and it was an Inter-State trade. Statutory Forms-C were supplied by the Petitioner to Respondent No.3, which were accepted by Respondent No.3 and also the Tax Authorities in Andhra Pradesh. Due to the introduction of GST Act from 01. 07.2017, there has been a change in the definition of goods. On combined reading of section 8(1) and 8(3)(b), on inter-state sale of goods, the rate of tax under C.S.T. is at 2% or local rate of the State (from where sale originates), whichever is lower.

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" (1985) 2 see 544

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5|n short 'GST

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e. With the advent of GST. under the impression that the Petitioner may not be eligible to purchase the Petroleum products including natural gas at concessional rates of CST, against C-Form, from Respondent^No.3 or any other supplier, and that Petitioner would not be able to furnish C-Forms to Respondent No.3 on procurement of natural gas as raw material, Respondent No.3 collected CST at full tax @ 14.5% from the Petitioner and there is no corresponding amendment in Section 8(3)(b) as to eligibility of goods entitled for concessional tax to the definition of goods substituted in the CST Act. The buyers across the country have approached respective High Courts against denial of C-Forms regarding the purchase of Petroleum products including natural gas. On this point, reliance was placed on the decision of the Hon’ble Punjab & Haryana High Court in Carpo Power Ltd. v. State of Haryana^, consequent S L.P.No.20572 Of 2018 before the Hon’ble Apex Court. Tata Steel Ltd. V. State of Jharkhand^, State of Rajasthan V. ASI Industries Ltd.®, Southern Cotspinners Coimbatore Pvt. Ltd. v. State of Tamil Nadu®, Shri Varalakshmi Company v. State of Tamil Nadu^° and Commissioner of Commercial Taxes, Chennai v. Ramco Cements Ltd.^T

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f. It is further stated that pursuant to the judgment of the Hon’ble Apex Court in Carpo Power (supra), the Ministry of Finance, Department of Revenue. State Tax Division, issued a Memorandum Circular F.No. S-29012/64/2018 -ST-ll-Dor dated 01.11.2018 and advised the States for ensuring compliance with the

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® 2018(12)GSTL248(P&H) ^ 2019(30)GSTL3(Jhar) » 2019(30)GSTL 387 (Raj)

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9 2020 (32) GSTL 42 (Mad) 2020 (372) ELT 338 (Mad) ’’ 2020 V’iL 131 MAD (DB)

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judgment. It is stated that in view of the legal position, the Petitioner addressed letters to Respondent No.3 to take up the matter with VAT Authorities to claim refund of differential CST amount paid on the sales to the Petitioner. Thereafter, the Petitioner obtained C-Forms from the websites of UPVAT Department and MPVAT Department relating to natural gas purchased from Respondent No.3 during the financial years 2017-18, 2018-19 and 2019-20 and forwarded the statutory declarations to Respondent No.3 for onward submission to the assessing authority through e-mails dated 12.06.2020 and 24.06.2020. Consequently Respondent No.3 informed that they raised invoices @ 14.5% tax rate without support of C-Forms from the Petitioner and suggested the Petitioner to take up the issue with the Department.

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g. The excess tax charged by Respondent No.3 in absence of the C-Forms by collecting full tax would be Rs.22,58,24,410/- and the details of the same are tabulated hereunder;

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A. Pata

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Financial Year	CST@ 14.5% charged by ONGC i.e., Respondent No.3 Rs.	Applicable CST @2% Rs.	Excess tax charged & collected by ONGC Rs.
2017-18 (July, 2017 to March, 2018)	28,90,16,682	3,98,64,370	24,91,52,312
2018-19	83,74,54,404	11,55,10,952	72,19,43,452
2019-20 (up to December, 2019)	58,50,80,042	9,51,18,137	48,99,61,905
Total	171,15,51,128	25,04,93,459	146,10,57,669

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B. Vijaipur

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Financial Year	[email protected]% charged by ONGC i.e., Respondent No.3 Rs.	Applicable CST @2% Rs.	Excess tax charged & collected by ONGC Rs.
2018-19	20,14,10.437	2,77,80,750	17,36,29,687
2019-20 (up to September, 2019)	6,05,45,879	83,51,156	5,21,94,723
Total	26,19,56,316	3,61,31,906	22,58.24,410

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h. Utilization of C-Forms have been assessed and accepted by the Commercial Tax Department in the States of Uttar Pradesh and Madhya Pradesh. Reliance of the decision of the Hon’ble High Court of Gujarat was taken on the point that the buyer of petroleum products from oil companies located in Gujarat can directly claim refund of excess tax collected by the seller and deposited with the tax authorities under CST Act, 1956. It is further stated that Petitioner has filed a refund claim with copies of 10 nos., of C- forms claiming refund of tax of Rs. 146,10,57,669/- related to the C-Forms issued by Pata Unit and C-farms claiming refund of Rs.22,5 8,24,410/- related to the C-Farms issued by its Vijaipur Unit under the provisions of Section 38(9) of APVAT Act, 2005 being the excess tax collected by Respondent No.3 and deposited with Respondent No.2 enclosing the C-farm declarations downloaded from the website.

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i. Respondent No.2 rejected with following specific directives;

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i. The Petitioner to issue ‘C’ forms to ONGC i.e.. Respondent No.3.

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ii. ONGC to file the ‘C’ forms issued by the Petitioner before the Commercial Tax Officer,

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iii. The tax liability; and the differential tax, if any will be arrived by the authority concerned, after considering the documentary^evidence.

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Iv. ONGC, Rajahmundry to issue credit note to the Petitioner, for adjustment of excess tax paid, if any.

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V. ONGC, Rajahmundry to file application for refund, j. Thereafter, Petitioner made deliberations to decide the modalities and finally requested Respondent No.3 to issue credit note to the Petitioner as directed by Respondent No.2 to refund the differential CST amount. Since there has been no response, the Petitioner approached this Court since no alternate remedy is available under the scheme of the C.S.T. Act.

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3. Version of Respondent No.2:

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a. Petitioner could avail the opportunity of appeal^before Andhra^Pradesh VAT Tribunal, vide Section 31 of the Act, against the endorsement issued by RespondentNo.2 and as such this Writ Petition is liable to be dismissed, since it is preferred without availing the alternate remedy.

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b. The assessment of Respondent No.3 under CST Act, 1956 was finalized by Respondent No.4 being Assessing Authority, vide orders dated 25.03.2022. Respondent No.2 is not competent either to process refund or to reject the refund, vide Section 9(3) of CST Act, 1956 r/w Section 38(9) of AP VAT Act, 2005, as Respondent No.2 has no jurisdiction over either the seller or buyer, since he is not authorized officer, vide Rule 59 after implementation of GST Act from 01.07.2017.

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0»-'

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c. Respondent No.3 being registered dealer on the rolls of Respondent No.4, collected 14.5 % of tax from the Petitioner on interstate sales of gas, in absence of C-Forms, as per the request of the Petitioner to Respondent No.3 that they are unable to file C-Forms after 01.07.2017. Petitioner has not paid tax to the Department, but paid it to the Respondent No.3 i.e., the seller. In that view, Petitioner was advised to issue C-Forms to Respondent No.3 and in turn Respondent No.3 must issue a credit note to the Petitioner for adjustment of excess tax paid, if any, and after filing of C-Forms by Respondent No.3, the concerned officer/Respondent No.4 to arrive tax liability and then Respondent No.3 can file application for refund to the concerned officer Respondent No.4.

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d. Respondent No.2 finally stated that they have issued endorsement as per Section 38(9) of AP VAT Act, 2005 read with Section 9(2) of CST Act, 1956 as refund to the unregistered tax payer is not applicable. The directions were given % under the endorsement are by following the judgment in case of TATA Steel Limited, Jamshedpur v. State of Jharkhand and others in W.P(T) No.6048 of 2017 dated 28.08.2019. It is further stated that Respondent No.4 passed assessment order for the year 2017-18 under CST for Respondent No.3. dated 25.03.2022. Respondent No.4 also passed assessment order for the years 201819 and 2019-20 of Respondent No.3 and collected full tax rate on their request in absence of C-Forms. Ultimately, prays for the dismissal of the petition.

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4. Contention of Respondent No.3:

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a. In July, 2017, Petitioner communicated to Respondent No.3 that they were not in a position to provide Form C, therefore requested to deduct full tax payable

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on the supplies made to Pata and Vijaypur. On this request, Respondent No.3 started raising CST invoice @ 14.5% and the same had been deposited with the Department. Meanwhile on 12.11.2020, Petitioner requested Respondent No.3 to consider the Form-C for the disputed period and submit the same to the Department for refund of excess CST paid

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b. In pursuant to the request made by the Petitioner, Respondent No.3 has submitted all the forms to the Department, however, it was concluded by Respondent No.4 that they would not be able to refund the money by treating the tax @ 2% since tax was collected and deposited @ 14.5%^at the behest^of the Petitioner, who stated that they would not be able to issue C-Form in respect of interstate purchase of natural gas. Respondent No.3 has no role in the entire dispute, hence, the relief against Respondent No.3 has become infructuous.

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Petitioner filed rejoinder to the counter filed by Respondent No.2, with the following averments, in brief;

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a. Respondent No.2 as per the provisions of Section 9(2) of CST Act read with Section 75 of the Act ought to have entertained the refund application of the Petitioner on merits by making necessary assessment^{underSection21} of the Act. Refund applications were to be taken up by Respondent No.2 by giving opportunity of personal hearing

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b. During the transition phase from VAT regime to GST regime, there was an ambiguity as that whether C- Form issued for purchase of goods under VAT regime would continue or not, especially as various State Government departments, such as the State of Rajasthan, were not issuing C-Forms for

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purchase of Vatable goods to be used in manufacturing of the goods exigible to GST. Ministry of Finance, Govt, of India, vide clarification dated 07.11.2017 has clarified that C-form cannot be issued for manufacturing GST goods. Similar clarification was also issued by the Commissioner of State Tax, Maharashtra.

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c. Therefore, due to lack of clarity and ambiguity prevailed during the transition period. Petitioner paid higher rate of CST for purchase of Natural gas. not only from the State of Andhra Pradesh but also from the dealers situated in other States. However, once the legal position has been settled in favour of the petitioner, 'C Forms were submitted well before completion of the assessment of the 3rd Respondent for the year 2017-18. Similarly, 'C forms were submitted to the suppliers situated in other States. Accordingly, as per the directions of the Honourable High Court of Gujarat vide order Dt.01.12.2022, the petitioner got the refund of the excess CST of Rs 66.07 crore as per the Order (State Tax) Gujarat Dt. 20.12.2022.

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d. Respondent No.2 is empowered to make assessment of the Respondent No.3 and examine the eligibility of concessional rate of tax against 'C Forms submitted by the petitioner and to grant consequential relief as per the refund claims made by the petitioner. Since, the petitioner has borne the incidence of tax liability, the petitioner alone is entitled to claim the refund as such the question of issue of credit notes by Respondent No.3 would not arise in the instant case.

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e. The stand taken by the Respondent No.2 is contrary to the view taken by their Lordships in Vyankatlal (case referred supra), which reads thus;

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"14. The principles laid down in the aforesaid cases were based on the specific provisions in those Acts but the same principles can safely be applied to the facts of the present case inasmuch as in the present case also the respondents had not to pay the amount from their coffers. The burden of paying the amount in question i/i/as transferred by the respondents to the purchasers and, therefore, they were not entitled to get a refund. Only the persons on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same. The amount deposited towards the Fund i/i/as to be utilized for the development of sugarcane. If it is not possible to identify the persons on whom had the burden been placed for payment towards the Fund, the amount of the Fund can be utilised by the Government for the purpose for which the Fund Was created, namely, development of sugarcane. There is no question of refunding the amount to the respondents who had not eventually paid the amount towards the Fund. Doing so would virtually amount to allow the respondents unjust enrichment."

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(Emphasis supplied.)

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f. The above judgement was relied and the judgement of^{theHonourable} Apex court in Maftlal industries^^^ was referred by the Hon'ble High Court of Gujarat at Ahmedabad in the case of J.K. Cement Ltd Vs State of Gujarat^^

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g. Respondent No.3 again submitted the forms on 13.06.2022 for review of the assessment for the years 2017-18 since it cannot be said that the C-Forms were filed after completion of assessment.The question of issue of credit notes by the 3rd Respondent would not arise in the instant case. In the case of Tata Steel Limited, Jamshedpur and Others v. State of Jharkhand and Others^^ of Jharkhand High Court, their lordships held that:

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1997(89) ELT 247(SC

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13 2021 (375) ELT 113(Guj) = 2020-VIL-75-GUJ 2019(9)'TMI 524

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"27. Pursuant to the interim orders passed in these writ applications, Form-C have been issued to the petitioners and it is an admitted case by the learned counsel for the petitioners that provisional credit notes have also been given to them by the respective oil companies. We make it clear that the provisional credit notes given to the petitioners shall be given effect to, or in any case in which the provisional credit notes have not been given, the required refund shall always be given to the petitioners. If the respective oil companies have made the deposit to the State exchequer, they shall also be entitled to claim the refund thereof"

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(Emphasis supplied)

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h. Petitioner further stated that Respondent No.4 should have reopened the assessment for the year 2017-18 and should have passed necessary orders for the years 2018-19 and 2019-20 by considering the C-Forms already on record as huge amounts of refund were blocked.

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Arguments Advanced at the Bar

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Heard Sri S. Ravi learned Senior Counsel representing Sri A. Sarveswara Rao learned counsel for the Petitioner, learned Government Pleader for Commercial Tax and Sri D.S. Sivadarshan, learned counsel for Respondent No.3. Perused the Material on record.

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Learned Senior counsel for the Petitioner in elaboration to the contents stated in the Writ Affidavit, would submit that Petitioner is entitled to have concessional rate of tax, for the purchase for the raw material, which is used in manufacturing process, by submitting the C-forms through the buyer under CST Act. He would submit that after the advent of the GST Act, 2017, there has been lot of confusion in the light of the amendment to the definition of “goods”. Thereafter, it is stated that the authorities clarified that certain items would still be

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covered by the VAT Act, even after the GST Act. On this aspect, reliance was placed by the learned Senior Counsel on the decision of the Hon’ble Punjab and Haryana High Court in case of Capro Power (referred supra) to submit that a Division Bench therein categorically held that even after the GST Act came into force, Petitioner could avail the benefit of concessional rate of tax for purchase of the gas under interstate sales under C.S.T.Act. It was further stated that on S.L.P., a Three-Judge Bench of the Hon’ble Supreme Court in State of Haryana V. CAPRO Power Ltd.^^, upheld the said legal position.

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Relying so, it is argued by the learned Senior Counsel that in the absence of the C-Forms, full tax was recovered from the Petitioner and assessment of Respondent No.3 is also completed. He would thus place^{beforethisCourtthat} the entitlement of the Petitioner to the concessional rate was not in dispute and it is only due to the procedure that the Petitioner could not directly submit C- forms to the Department.

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Learned Senior Counsel while referring to the Section^{6ofC.S.T.Actwould} argue that even after payment of the tax, one can avail the benefit of concessional rate of tax by submitting the C-Forms. It is stated that the Petitioner submitted the C-forms to Respondent No.4 which were returned with an endorsement. He would also submit that the procedure is laid down only to avoid unwarranted and illegal C-Forms for getting unlawful gain and it is only because of the confusion after GST Act came into force, that the Petitioner could not submit the C-Forms within time. It is also contended that even in the counter filed

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15 2018 see Online Se 3773

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by the Respondent No.2, they are not disputing the legal position but only questioning the procedure. Learned counsel further submits that, now they have filed I.A.Nos.,2 and 3 to reopen the assessment of Respondent No.3 to submit the C-Forms so that Petitioner would get concession and that the Court may pass appropriate orders to enable the Petitioner to get^{therefundoftheexcesstax} paid to the Department.

¶136

I.A.No.2 of 2023 is filed praying to direct Respondent^No.3 to file a representation(s) under Rule 12(7) of the CST (R&T) Rules before Respondent No.4, seeking re- opening of the Assessments for the years 2017-18 and 201819, and consequently consider the C forms issued by^the Petitioner for such years, which are already on the records of Respondent No.4, in the assessment files, as per the provisions of Section 8(1) and 8(3) of the CST Act. Whereas, I.A.No.3 of 2023 seeks to direct Respondent No.4 to pass appropriate re assessment orders for the years 2017-18 and 2018-19 by considering the C forms submitted by the Petitioner and to pass fresh orders by granting concessional rate of tax as per the provisions of Section 8(1) of the CST Act. 11. Learned Government Pleader for Commercial Tax would submit that it is for Respondent No.3 to submit the C-Forms, as Assessment Order came to be passed and that the C-Forms filed by Respondent No.3 were rejected. Learned Government Pleader further submits that. Petitioner is not a registered dealer in the State, as such, the Department cannot entertain their petition for refund. It is also pointed out that the application of refund was not rejected, but was only returned with an endorsement. It is also stated that the C-Forms are not available with the Department as on the date of filing of the W.P. Respondent No.3

¶137

¶138

submitted the C-Forms during the pendency of the W.P., which were rejected but not challenged. Learned Government Pleader finally^{submitsthatthePetitioner} without preferring appeal, filed the present W.P. which is liable to be dismissed.

¶139

Learned counsel for Respondent No.3 would submit that, initially the Petitioner has not submitted C-Forms and requested^{themtocollectfullrateof} tax and it is for this reason that they collected 14.5% of tax from the Petitioner. It is also stated that in absence of C-Forms, the assessment order was passed levying 14.5% of tax and that the Respondent No.3 has deposited the tax as it is which was collected form the Petitioner. On the request of the Petitioner, though Respondent No.3 submitted C-Forms, the same were rejected by the Department and that the Court may pass appropriate orders.

¶140

Point for Determination

¶141

The point that would emerge for determination is; Whether the Petitioner is entitled for issuance of C-Forms post the introduction of G.S.T. regime for natural gas, and entitled for the refund of the amount already^{collectedatfullrate?}

¶142

Determination by the Court

¶143

• Issuance of C-Forms Post G.S.T. Regime

¶144

The C.S.T. Act, 1956 has been enacted to formulate principles for determining when a sale or purchase of goods takes place in the course of inter state trade or commerce or outside a State or in the course of import into or export from India, to provide for the levy, collection and distribution of taxes on sales of goods in the course of inter-State trade or commerce and to declare

¶145

¶146

certain goods to be of special importance in inter-State trade or commerce and specify the restrictions and conditions to which State laws imposing taxes on the sale or purchase of such goods of special importance shall be subject.

¶147

Section 8 (1) of the C.S.T. Act, 1956 stipulates the rate of tax on the interstate sale to a registered dealer of goods, as provided under Section 8(3)(b). The concessional rate of tax under this provision by virtue of the S.O. 1277(E), dated May 30, 2008, is reduced from 3 % to 2% w.e.f. 01-06-2008. Therefore, vide the provision, a registered dealer shall be liable to pay tax under CST Act @ 2% of his turnover or at the rate applicable to sale or purchase of goods inside the appropriate State under the Sales Tax law of that State, whichever is lower.

¶148

Further, clause (b) of sub-section (3) of Section 8 specifies the goods mentioned in sub-Section (1) as goods of the class/classes that are specified in the registration certificate of the purchaser as being intended for re-sale by him or vide the rules framed by the Central Government, for the use by him in the manufacture or processing for sale of goods specified under Section 2(d).

¶149

From 01.07.2017, the G.S.T. regime came into force. Due to the advent of the GST, there has been an amendment to the definition of goods under the C.S.T. Act. Previously, Sec 2(d) of CST Act, which defined goods, read as under-

¶150

"(d) goods includes all materials, articles, commodities and all other kinds of movable property but does not include newspapers, actionable claims, stocks, shares & securities.'

¶151

¶152

Vide the Taxation Laws (Amendment) Act, 2017 (Act No. 18 OF 2017), the definition of "goods" under Section 2(d) underwent change in the following manner-

¶153

"(d) 'goods' means

¶154

(i) petroleum crude;

¶155

(ii) high speed diesel;

¶156

(iii) motor spirit (commonly known as petrol);

¶157

(iv) natural gas;

¶158

(v) aviation turbine fuel; and

¶159

(vi) alcoholic liquor for human consumption.

¶160

In Carpo Power Ltd. (referred supra), before the Hon'ble Punjab and Haryana High Court, the issue was the challenge made by a Petitioner for being refused to be issued C-Forms for the natural gas purchased in an inter-state trade for generation of electricity from Gujarat to Haryana. The question before the Court whether after the amendment of the C.S.T. Act, the petitioner is entitled to be issued 'C Forms in respect of the natural gas purchased in inter-state sale or not. The Hon’ble Court came up to a conclusion on a combined reading of Section 2 (52) and 9 (2) of the C.G.S.T. Act, the inter-state sale of natural gas continues to be governed under the C.S.T. Act. Thereafter, it was held that since Section 8 of the CST Act, the Rule 12 of the CST (R&T)^Rulesand Form-'C have not undergone any amendment, the Department cannot put any restriction on the usage of 'C forms only in view of the amendment of definition of "goods" in the CST Act. The relevant paras 26 and 28 of the judgment is reproduced hereinunder:-

¶161

"26. The provisions of Section 8 of the CST Act, Rule^12of CST (R&T) Rules and declaration Form C have not undergone any amendment after the implementation of^the GST laws. There cannot be any occasion to restrict the usage

¶162

¶163

¶164

of 'C Form only for the purposes of re-sale of the six items mentioned in the amended definition of 'goods' in Section 2(d) of the CST Act. The purchase of the said goods for purposes of re-sale, use in the manufacture or processing of goods for sale, in the tele-communications network or mining or in generation or distribution of electricity or any other^formof power would qualify the purchaser for registration under Section 7(2) of the CST Act. Section 7(2) does not stipulate that only a dealer liable to pay tax under the sales tax law of the appropriate State in respect of any particular goods is entitled to apply for registration. Nor does Section 7(2) stipulate that an application for registration can be made or 'C Form can be issued only in respect of the sale of the same goods prescribed in the course of an inter-State sale. A dealer liable to pay tax under the sales tax law of the appropriate State in respect of any goods would be covered by Section 7(2) of the Act.

¶165

¶166

In these circumstances, the writ petition is allowed. It is held that the respondents are liable to issue ‘ C Forms in respect of the natural gas purchased by the petitioner^from the Oil Companies in Gujarat and used in the generation^or distribution of electricity at its power plants in Haryana. In the event of the petitioner having had to pay the oil companies any amount on account of the first respondent's wrongful refusal to issue ‘C Forms the petitioner shall be entitled to refund and/or adjustment of the same from the concerned authorities who collected the excess tax through the oil companies or otherwise. The concerned authorities shall process such a claim within twelve weeks of the same being made by the petitioner in writing and the petitioner furnishing the requisitedocuments/form."

¶167

(emphasis supplied)

¶168

In Tata Steel Ltd. v. State of Jharkhand, (referred supra) a prayer was sought to direct issuance of C-Forms with respect to an inter-state purchase. A Division Bench of the High Court of Jharkhand, made an exhaustive analysis on the aspect of issuance of these statutory forms in light of the increasing litigation for the grant and denial of the same. On a combined reading of the C.S.T Act, 1956 and the C.S.T. (Registration and Turnover) Rules, 1957, it was opined that

¶169

¶170

the C-Forms have to be given to the registered dealer when the goods in respect of which the C-Form is used, are included in the registration certificate; when necessary, application amount is paid and when there is compliance to the rules prescribed. Furthermore, the Court also observed that with every state “power”, there vests a duty and with every “duty”, a “right” flows to the assessee /applicant of the C-Form. Thereafter, it was also noted that there are certain does and do nots for the state while grant or refusal of the same. The kind of enquiry that is to be exercised at the time of issuance of the C-Form to the registered dealer was observed as under;

¶171

“(xii) The officers of the respondent-State are not required to conduct an enquiry into the nature of transactions while issuing^formCnorcan they inquire as to whether the registered dealer—petitioner,^needsform C for use in the course of inter-State trade nor the officers of the State can enquire into the fact that whether form C will be misused by the registered dealer or not. This type of enquiry cannot^{beconductedat} the stage of grant of form C. Such type of enquiry^{neednotbecarried} out at the stage of issuance of form C. At the time of regular assessment, the use or misuse of form C can be verified with the help of several documents. The officers of the State cannot pre-judge the issue about the nature of the transaction nor the officers of the respondent-State can enquire into the fact whether form C being demanded by the petitioner is for avoidance of payment^ofthetax. It is a work to be done at the time of assessment of annual returns and if any violation is found out, there are provisions under the Central Sales Tax Act 1956, under section 10 and 10A ”

(emphasis supplied)

Further, referring to the decision in Unitech Ltd. v. Commercial Tax Officer, Gajuwaka, Vlsakhapatnam^® of the then Composite High Court of Andhra Pradesh, it was noted that the pre-judging the nature of transaction^is not essential for the grant of the C-Form. At para 5(xviii), the Court while summarizing the findings held that any extraneous consideration taken by the State to deny the issuance of C-Form would amount to Wednesbury unreasonableness.

¶176

In State of Rajasthan v. ASI Industries Limited, (referred supra), a Division Bench of the Hon’ble Rajasthan High Court, having referred to the decision rendered in Carpo Power Ltd., held that the denial of C-form was purely on exigencies with the G.S.T. regime, that compelled the Petitioner therein to migrate to the G.S.T. registration.

¶177

Further, in Shree Raipur Cement Plant v. State of Chhattlsgarh^^ a question as to the entitlement of C-Form post promulgation of the C.G.S.T. Act, 2017 was in issue before the High Court of Chhattisgarh. While reiterating the position laid down Carpo Power Ltd. (referred supra), held as follows;

¶178

“39. On the basis of aforesaid analysis, it is held that the petitioner is a registered dealer under the provisions of the CST Act, 1956 read with the Rules of 1957 and his registration certificate under the CST Act, 1956 read with the Rules of 1957 continues to be valid for the purpose of inter-State sale and purchase of high speed diesel despite the petitioner having been migrated to the GST regime with effect from July 1, 2017, as the definition of goods as defined in section 2(d) of the CST Act, 1956 has been amended prior to coming into force^oftheCOST Act, 2017 from July 1, 2017 which includes high speed diesel. Further,

¶179

[1991] 83 STC 207 (AP) (2018) 55 GSTR 306

¶180

¶181

under section 9(2) of the COST Act, 2017, the GST Council has not made any recommendation for bringing high speed diesel^withinthe ambit of the CGST Act, 2017 and therefore the Central Government has not notified high speed diesel to be within the ambit and sweep of the CGST Act, 2017. Thus, the petitioner's registration^{certificateunder} the CST Act, 1956 is still valid for the goods defined in section 2(d) of the CST Act, 1956, including high speed diesel, and the petitioner is entitled for issuance of C-Form for inter-State purchase/sale of high speed diesel against the said C-Form. Accordingly, the respondents shall be liable and are directed to issue C-Form to the petitioner in respect of high speed diesel to be purchased by the petitioner and used in the course of manufacture of cement and for that, it is further directed to rectify and remove the error on their official website and entertain the petitioner's application submitted on-line on the official website seeking issuance of C Form to the petitioner for said goods.”

¶182

(emphasis supplied)

¶183

A learned single judge in Hindustan Zinc Limited v. State of Rajasthan^® followed the decision rendered in Carpo Power Ltd. (referred supra), and issued directions for the issuance of C forms to purchase high speed diesel, oil for mining purpose in the course of inter-State trade or commerce, despite the introduction of the GST regime with effect from July 1, 2017. The relevant portion reads thus;

¶184

"16. In the present case too, the Parliament has retained high speed diesel along with petroleum crude, motor spirit, natural gas, aviation turbine fuel and alcoholic liquor for human consumption crude which have been specifically mentioned in section 9 of the GST Act while defining the 'goods'. Besides, the registration^under section 7(2) of the Act is still valid and has not been cancelled and can be cancelled only within the parameters of section 4 of the Central Sales tax Act. Hence, this court finds that it is obligatory duty of the respondents to issue C form to the petitioner-compan y and any failure on the part of the respondents to do^soiswithout any authority of law. Thus, this court finds nothing to distinguish the case of the petitioners herein from that of the petitioner^inthecase of Carpo Power Limited v. State of Haryana [2018] 53 GSTR²⁴ (P&H).."

¶185

(emphasis supplied)

¶186

[2019] 64 GSTR 366 (Raj)

¶187

24 '

¶188

¶189

A Division Bench of the Orissa High Court in Tata Steel Ltd. v. State of Orissa^® on a survey of all the precedents of various Courts on this point, noted the circular issued on 01-11-2018 by the Ministry of Finance to the Commissioners of Commercial Tax of States/Union Territories to abide by the decision rendered in Carpo Power Limited, which was confirmed by the Hon’ble Supreme Court. The relevant portion of the letter reads thus;

¶190

Dated the 1st November, 2018.

¶191

To : The Commissioner of States/Union Territories.

¶192

The Commissioner of Commercial Tax of all

¶193

Subject : Regarding definition of goods in sub-section (3)(b) of section 8 of the Central Sales tax Act, 1956 and issuance of Form C. Sir/Madam,

¶194

I am directed to refer to OM dated November 7, 2017 (copy enclosed) regarding clarification of definition of goods in sub section (3)(b) of section 8 of the Central Sales tax Act, 1956 and to say that Honourable Punjab and Haryana High Court has considered the issue of C forms in respect of Natural^Gas purchased by the petitioner in one State and used in another State vide judgment dated March 28, 2018 in C. W. P. No. 29437/2017 filed by Carpo Powers Ltd. which has been upheld by the honourable Supreme Court vide its order dated August 13, 2018 in SLP No. 20572/2018 in this matter.

¶195

This matter has been examined in Department of Revenue and it has been decided to forward copy of aforesaid judgment dated March 28, 2018 (copy enclosed) of honourable High Court of Punjab and Haryana and order dated August 13, 2018 (copy enclosed) of honourable Supreme Court for compliance in the respective States. End : As above.

¶196

★★★*★» 1

¶197

A Division Bench of the Madras High Court in Commissioner^ofC.T.v.

¶198

Ramco Cements,and a learned Single Judge in Southern Cotspinners

¶199

Coimbatore Pvt. Ltd. (referred supra) reiterated the settled position referred

¶200

19 [2019] 70 GSTR99 (Orissa)

¶201

20 (2020) 80 GSTR 8

¶202

¶203

hereinabove. Therefore, on a survey of the precedents referred above, it is clear that the pursuant to the joint reading of the definition of goods and Section 8 of C.S.T. Act, the Petitioner having satisfied the conditions prescribed becomes eligible for the issuance of C-Forms, even after the G.S.T. regime.

¶204

Receipt of C-Forms After Assessment

¶205

A C-Form is essentially issued by the seller of goods to the buyer for the purpose of effecting a reduction on the rate of tax. The purpose of prescribing the filing of C-Forms is encapsulated by the Hon’ble Apex Court in India Agencies (Regd.), Bangalore v. Additional Commissioner of Commercial Taxes, Bangalore 21

¶206

“15. The very purpose of prescribing the filing of^{CFormsisthatthere} should not be suppression of any inter-State sales by a selling dealer and evasion of tax to the State from where the actual sales are affected. Secondly, the purchasing dealer also cannot suppress such purchases once he issues C Form to the selling dealer. Since the dealer should issue C Form he has to maintain a detailed account of such C Forms obtained from the Department prescribed^underthe State's taxation law. The C Form is a declaration to be issued only by the Sales Tax Authorities of concerned States. By issuing^declaration in C Form the purchasing dealer would be benefited as he is entitled to purchase goods by paying only concessional rate of tax of four per cent, as prescribed by the concerned State of the purchasing^dealer otherwise the purchasing dealer has to pay tax at a higher rate besides additional taxes on such sales effected within the State where selling dealer is situated."

¶207

(emphasis supplied)

¶208

From the very wording of the above quote, it is clear that the declaration^is required by the registered dealer to purchase goods inter-state on concessional tax rate as under the C.S.T. Act. Vide the powers conferred under Section 13(1)

(2005) 2 see 129

of the C.S.T.Act, the Central Government framed the C.S.T. (Registration & Turnover) Rules. 1957. Relevant portions of Rule 12 reads thus;

¶213

“Rule 12. (1) The declaration and the certificate referred to in sub section (4) of section 8 shall be in Forms C and D respectively *****

¶214

(6) Form ‘C’ referred to in sub-rule (1), or as the case may be. Form ‘F’ referred to in sub-rule (5). shall be the one obtained by the purchasing dealer or. as the case may be. the transfereeⁱⁿ the State in which the goods covered by such form are delivered. [Explanation.— Where, by reason of the purchasing dealer not being registered under section 7 in the State in which the goods covered by Form ‘C’ referred to in sub-rule (1) are delivered, he is not able to obtain the said form in that State. Form ‘C’ may be^{theoneobtained} by him in the State in which he is registered under^{thesaidsection.}

¶215

(7) The declaration in Form C or Form F or the certificate in Form E-l or Form E-l I shall be furnished to the prescribed authority within three months after the end of the period to which the declaration or the certificate relates:

¶216

PROVIDED that if the prescribed authority is satisfied that the person concerned was prevented by sufficient cause from furnishing^such declaration or certificate within the aforesaid time, the authority may allow such declaration or certificate to be furnished within such further time as that authority may permit.”

¶217

It is trite to mention that, under Rule 12 (7) of C.S.T. (Registration & Turnover) Rules. 1957. a dealer can file C-Forms after making of the assessment by the competent authority. It is relevant to refer to the decision rendered by the then Composite High Court in Rajeswari Stone Polishers^{v.StateofAP.^^In}

¶218

22 1983 (52) STC 268

¶219

¶220

this matter, it was observed that, Sub Rule 7 of Rule 12 empowers the assessing authority to receive C Form even after making the assessment, subject to the satisfaction of the authority that the dealer was prevented by 'sufficient cause’ from filing the said forms before making the assessment. Needful to say that, the Proviso to Sub Rule 7 does not indicate any time frame within which a dealer can file C-Forms. It clearly construes that subject to satisfying the authority about the sufficient cause for not filing the C forms within time, the dealer is very much permitted to claim concessional rate of tax by filing statutory forms under CST Act. The judgment in Rajeswari Stone (case referred) was confirmed by the Hon’ble Apex Court in State of A.P. V. Hyderabad Asbestos Cements Production Llmited^T Hence, it is clear that the Assessing Authority has power to receive C forms even after completing the assessment. The only embargo is sufficient cause’. 30. The role of Respondent No.3, who is the seller within the State of Andhra Pradesh is that he works as an agent of the Government to collect the tax from the buyer. The buyer who purchases such goods from Andhra Pradesh , uses them as a raw material in manufacturing the final productⁱⁿ the other State^is to have a concessional rate of tax of 2% under CST Act on submission of statutory C-Forms. It is not out of place to mention that the statutory C-Forms can be submitted even after completion of the assessment by^the seller. The claim cannot be rejected on the score that C-Forms were presented after the assessment. The only obligation on the part of the seller is to prove sufficient case for the late submission of C-Forms.

(1994) 94 STC410

' m.

• Refund of the Tax Deposited

¶225

It is also beneficial to refer to the decision rendered by a Division Bench of the Gujarat High Court in Udaipur Cement Works Ltd. v. State of Gujarat.^'’ In the latter case, a writ petition under Art 226 was preferred seeking for refund of tax amount collected by the seller and deposited with the authorities under the C.S.T. Act. On this aspect, reliance was on decision of the Bench in J.K. Cement Ltd. v. State of Gujarat, 25 Once again in Saint-Gobain India Private Limited v. Union of India^® , while reiterating the position of law laid down in Udaipur Cement Works Ltd. (referred supra), the Hon’ble Gujarat High Court made an observation that despite the coming into force of G.S.T. regime, natural gas continued to be in the ambit of CST Act. Having so noted, it was observed by the Court that the Rajasthan High Court with regard to the same Petitioner directed the issuance of C-Forms. The relevant observations at paras 14-21 quoted from J.K. Cement Ltd. are as follows;

¶226

“14. In the backdrop of the facts and contentions noted hereinabove, it is an undisputed position that the petitioners have borne the burden of tax as the CST authorities at Rajasthan had refused to issue C forms after the coming into force of the GST regime. On account^of nonissuance of C forms, the petitioners were not in a position to submit C form declarations in respect of the diesel purchased by them for their mining activity, as a result whereof, the petitioners could not purchase diesel at concessional rate of tax from the seller-Reliance Industries Limited, which collected tax at the rate of 20% from the petitioners and deposited the same with the respondent authorities. Now, on account of the directions issued by the Rajasthan High Court in the decisions referred to hereinabove, the CST authorities at Rajasthan^haveissued

¶227

2020 see OnLine Guj 3294

¶228

2625 SpecialSpecial eivileivil ApplicationApplication No.No. 153331481/2022of 2019decideddecidedon 24"’on 18''’FebruaryDecember,2022, 2019,GujaratGujaratHigh GourtHigh Gourt

¶229

¶230

C form declarations in respect of the transactions in question. The respondent authorities do not dispute that against the C form declarations, the tax collected from the petitioners and deposited by Reliance Industries Limited is required to be refunded. The sole refrain of the respondent authorities is that such refund can be made to the seller - Reliance Industries Limited after its assessment for the period in question is concluded and not to the petitioners who are not registered as dealers in Gujarat. 15. In the opinion of this court, while adopting the above stand, the respondents have failed to take into consideration the fact that insofar as Reliance Industries Limited is concerned, it has already collected the tax from the petitioners, and hence, if Reliance Industries Limited seeks refund of the amount against the C form declarations, it would not be entitled to such refund as such claim would be hit by the principles of unjust enrichment. As held by the Supreme Court in^State of Madhya Pradesh v. Vyankatlal (supra), only the persons^onwhom lay the ultimate burden to pay the amount would be entitled to get a refund of the same. The petitioners having borne^theultimate burden in this case, it is only they who would be entitled to refund of the same. 16. Besides the Rajasthan High Court in the petitioners own case has held that the authorities at Rajasthan were liable to issue ‘C’ forms in respect of high speed diesel procured for mining purpose through interstate trade. The court has further held that in the event of the petitioners having had to pay any amount on account of the respondents' wrongful refusal to issue ‘C forms, the petitioners shall be entitled to refund and/or adjustment from the concerned authorities who had collected excess tax. The court further directed the concerned authorities to process such claim within twelve weeks of the same being made by the petitioners in writing and the petitioners furnishing the requisite documents/forms. 17. In the present case, in the absence of ‘C’ forms having been issued by the Rajasthan authorities, the respondent authorities have collected excess tax from the seller - Reliance Industries Limited, who in turn has collected the same from the petitioners. Therefore, in terms of the above order passed by the Rajasthan High Court, once the Rajasthan authorities issue C forms against the sales made by Reliance Industries Limited to the petitioners and the petitioners produce the

¶231

¶232

requisite documents/forms before the respondent authorities, the respondent authorities are required to process such claim within twelve weeks of the same being made in writing by the petitioners. 18. Pursuant to the above order passed by the Rajasthan High Court, the petitioner in Special Civil Application No. 15333 of 2019 has made an application dated 19.4.2019 to the second respondent^for refund of Rs. 2,12,09,162/- charged by Reliance Industries Limited. Along with the application, the petitioner has furnished a copy of the order of the Rajasthan High Court, a statement showing^thedetailsof high speed diesel purchases. Form ‘C Quarter IIF'^ and IV*'’ (F.Y. 201718), copy of the letter from Reliance Industries Limited to the Deputy Commissioner of Gujarat Sales Tax and copy of sample^invoice.The petitioner in Special Civil Application No. 16288 of 2019 has made an application dated 31.8.2019 to the second respondent seeking refund of Rs. 1,97,32,644/-. Along with such application, the said petitioner has furnished a statement showing details of purchases, tax charged and submission of ‘C’ forms against such purchases as well as copy of sample invoice, etc. Thus, the petitioners had duly complied with the direction issued by the Rajasthan High Court and in case the respondents required the petitioners to furnish any other details, it was always open for them to call upon the petitioners to^furnishthe same. However, the respondent authorities have taken a stand that since it is Reliance Industries Limited which has deposited the tax, such refund application has to be made by it and upon refund being^made to Reliance Industries Limited, it can pay the same to the petitioner. However, as noted earlier. Reliance Industries Limited cannot make an application for refund inasmuch as such claim would be barred by the principle of unjust enrichment. Moreover, as stated by the respondents, in the case of Reliance Industries Limited, the refund claim would be processed during the course of its assessment for the period in question, which may take years together and in the meanwhile the petitioners would be deprived of such amount. Moreover, it may be that while processing the refund claim during the course of Reliance Industries Limited's assessment, the respondents may even adjust the refund amount against its dues. Thus, the stand of the respondents that Reliance Industries Limited should file the refund claim and then pay the amount so refunded to the petitioners is neither legally tenable nor is it practically workable.

¶233

¶234

In the opinion of this court, in the light of the^{cleardirections} issued by the Rajasthan High Court in the judgment^{andorderreferred} to hereinabove, which the respondent authorities are bound to comply with, upon the petitioners making applications for refund along with the requisite documents, the respondents were duty bound to process such claim within a period of twelve weeks from the date of such application. The stand adopted by the respondents that the refund can be made^to only to Reliance Industries Limited flies in the face of the order passed by the Rajasthan High Court as well as the above-referred decisions on which reliance has been placed by the learned advocate for the petitioners and is nothing but a purely hyper technical stand adopted by them. Once Reliance Industries Limited has, in clear terms, written to the authorities that various buyers who have purchased^HSDin the course of inter-state trade for use in mining activities^willbe approaching their office for refund of the differential tax amount and has enclosed therewith Customer-wise details of inter-state sales made to buyers in Rajasthan at full rate, it is evident that Reliance Industries Limited is not disputing the fact^that it is the petitioners who are entitled to claim the refund. Under the circumstances, the respondent authorities are not justified^innot processing the refund claims of the petitioners. 20. In case of the petitioners, it is an admitted position^thattheHSD has been purchased by them from Reliance industries Limited in the course of inter-State trade for use in mining activities and they are. therefore, the ultimate consumers thereof and hence, the question of passing on the tax burden to anyone would not arise. Consequently,the question of unjust enrichmentwould also not arise.

¶235

For the foregoing reasons, the petitions succeed and are accordingly allowed. The respondents are directed to forthwith process the refund claims of the respective petitioners and grant refund of the tax amount collected from the petitioners and deposited by the seller in accordance with law within a period of twelve weeks of the receipt of a copy of this judgment. It is, however, clarified that once the refund claim of the petitioners is processed. Reliance Industries Limited would not be entitled to claim any such refund. Rule is made absolute accordingly,^with no order as to costs.”

¶236

(emphasis supplied)

¶237

¶238

Based on these observations, in both these matters, the High Court of Gujarat directed to process the refund claim of the Petitioners therein in accordance with law.

¶239

In the present matter, it is not the case of the Department that the C-Forms are not genuine or that the Petitioner is not entitled for concessional rate of tax of 2% for the interstate sale by Respondent No.3 to the Petitioner. As the Petitioner could not submit the C-forms, they requested Respondent No.3 to collect the full tax. This however does not mean that the C-Forms are created as an after thought. The Petitioner is entitled to have concessional rate of tax @ 2% on the purchases made from the Respondent No.3. The reason for non-submission of statutory C-Forms at relevant point of time is due to the confusion created on the advent of GST regime, which came into force from 01.07.2017. The Authorities clarified about the position on reference to the judgment of Punjab & Haryana High Court, which was confirmed by the Hon’ble Apex Court. Thereafter, the Petitioner made their efforts for submission of C-Forms to get refund. Record further shows that the Petitioner submitted C-Forms to Respondent No.2, which was returned with an endorsement directing them to submit the C-Forms through Respondent No.3 and then have credit notes from Respondent No.3, for refund of the amount.

¶240

Be that as it may, during the pendency of the present petition. Respondent No.3 has submitted C-Forms which were rejected by the Department stating that they have paid the full tax on the score that they could not get C-Forms. Petitioner having paid the full tax is entitled to the eligible refund. In that view of the matter, in the light of the judgment of a Coordinate Bench of High Court of

¶241

¶242

Gujarat in J.K. Cement (case referred supra), which relied on the decisions of the Hon'ble Apex Court in State of Madhya Pradesh v. Vyankatlal and others (case referred supra) it is apposite to direct Respondent Nos.2 and 4 to consider the C-Forms submitted by the Petitioner relating to^the purchase of gas from Respondent No.3 for claiming concessional rate of tax as per governing Rules and Law.

¶243

For the foregoing reasons, the petition succeeds and is accordingly allowed. The Respondent Nos.2 and 4 are directed to forthwith process the refund claim of the Petitioner for the years 2017-18 and 2018-19 based on statutory C-Forms of the Petitioner and upon scrutinising the genuineness of C- Forms in accordance with law and pass appropriate orders on merits within a period of four weeks of the receipt of a copy of this Order. It needs no emphasize that once the refund claim of the Petitioner is processed. Respondent No.3 would not be entitled to claim any such refund for the said period. No order as to costs

¶244

Pending applications, if any, shall stand closed.

¶245

Sd/- M.PRABHAKAR RAO ASSISTANT REGISTRAR

¶246

//TRUE COPY//

¶247

SECTION OFFICER

¶248

One fair copy to the Hon’ble Sri Justice U.DURGA PRASAD RAO (for His Lordship’s Kind Perusal)

¶249

One fair copy to the Hon’ble Smt Justice VENKATA JYOTHIRMAI PRATAPA (for Her Ladyship’s Kind Perusal) To

¶250

The Principal Secretary to Government, State of Andhra Pradesh, Secretariat, Velagapudi, Amaravati, Guntur Dist., A.P.

¶251

The Deputy Commissioner (CT), Commercial Tax Department, Government of Andhra Pradesh, 10-355, 1®* and 2"^^ Floor, CT Complex, Ramanayyapeta, Kakinada - 533005.

¶252

M/s Oil and Natural Gas Corporation, Godavari Bhavan Base Complex, Rajahmundry East Godavari District, Andhra Pradesh^- 533106.

¶253

4. 5. 6. 7.	The Commercial Tax Officer/Assistant commissioner (ST), Alkat Gardens Circle, 46-7-22, 4'^ Floor, jetty Towers, Danavaipet Rajahmundry-533103. A.P. The Under Secretary, Union of India, Ministry of Law, Justice and Company Affairs, New Delhi. The Secretary, A.P.Advocates’ Association Library, High Court Buildings, High Court ofAndhra Pradesh. 9 LR.Copies
11 8. 9. RAM	One CC to SriA Sarveswar Rao, Advocate [OPUC] One CC to Sri D.V.Sivadarshan, Advocate [OPUC] [Ol?n Commercial Tax, High Court ofAndhra Pradesh. .Two CD Copies

' V

HIGH COURT

DATED: 13/03/2024

ORDER

WP.No.17915of2022

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. Current Section
^^^SPATCV^?S

¶260

ALLOWING THE WP WITHOUT COSTS

¶261

✓

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI (Special Original Jurisdiction)

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WEDNESDAY. THE THIRTEENTH DAY OF MARCH TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO AND

¶266

THE HONOURABLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA

¶267

IA.No.2 of 2023 IN WRIT PETITION NO: 17915 OF 2022

lA NO: 2 OF 2023

Between:

...Petitioner

AND

The State of Andhra Pradesh, Rep. by its Principal Secretary to Government, Secretariat, Velagapudi, Amravathi, Guntur Dist., A.P.

¶274

Deputy Commissioner (CT), Commercial Tax Department, Government of Andhra Pradesh, 10-355, 1®' and 2"^ Floor, CT Complex, Ramanayyapeta, Kakinada - 533005.

¶275

M/s Oil and Natural Gas Corporation, Godavari Bhavan Base Complex, Rajahmundry East Godavari District, Andhra Pradesh - 533106.

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The Commercial Tax Officer/ Assistant commissioner (ST), Alkat Gardens Circle, 46-7-22, 4th Floor, jetty Towers, Danavaipet Rajahmundry-533103. A.P.

¶277

...Respondents

¶278

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the 3'^^ Respondent to file a representation(s ) under Rule

¶279

12(7) of the CST (R&T) Rules before the 4**^ Respondent, seeking reopening of the Assessments for the years 2017-18 and 2018-19, and consequently consider the C forms issued by the Petitioner for such years, which are already on the records of the 4*^ Respondent, in the assessment files, as per the provisions of Section 8(1) and 8(3)^oftheCSTAct. WRIT PETITION NO: 17915 OF 2022 Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or order or direction more particularly in the nature of a WRIT of MANDAMUS declaring that a)the Endorsements^inRef. R1.97/2021, Dt. 21-08-2021 (Ex. P-1) and in Ref. R1.98/2021, Dt. 21-082021 (Ex. P-2), passed by the 2nd Respondent, under the Central Sales Tax Act, 1957, hereinafter referred to as the Act, as illegal, arbitrary, contrary to the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgments of the Hon'ble Apex Court and Hon'ble Gujarath High Court and against the principles of natural justice, consequently b)the 2"^ Respondent may be directed to forthwith process the refund claims of the Petitioner and grant refund of the excess CST amount of Rs. 168,78,52,079/- collected from the Petitioner and remitted by the Respondent, against the sales of the natural gas by the 3"'^ Respondent to the Petitioner, during the period from 01-07-2017 to 31-122019, or alternatively, c)the 3^^ Respondent may be directed to submit the C-Forms furnished by the Petitioner to the 3'^ Respondent for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-12-2019, consequently, the 4*^ Respondent or any other appropriate authority may be directed to.

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Counsel for the Petitioner: SRI A.SARVESWAR RAO

¶281

Counsel for the Respondents: GP FOR COMMERCIAL TAX

¶282

Counsel for the Respondents: SRI D.S.SIVADARSHAN

¶283

The Court made the following order:

¶284

In view of the submissions made, it is apposite to direct the Respondent no.3 to file a representation under Rule 12(7) CST (R&T) Rules before Respondent No.4 seeking reopening of the^{assessmentfor} the years 2017-18 and 2018-19 to consider the C-Forms^issuedbythe Petitioner for the relevant period which are already on record of Respondent No.4 and consequently direct Respondent No.4^to pass appropriate orders as per the provisions of Sections 8(1) and 8(3) of CST Act.

¶285

//TRUE COPY//

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Sd/- M.PRABHAKAR RAO ASSISTANT^ REGISTRAR L

¶287

SE OFFICER

¶288

To,

¶289

The Principal Secretary to Government, State of^{AndhraPradesh,} Secretariat, Velagapudi, Amaravati, Guntur Dist., A.P.

¶290

The Deputy Commissioner (CT), Commercial Tax Department, Government of Andhra Pradesh, 10-355, 1®* and Floor, CT Complex, Ramanayyapeta, Kakinada - 533005.

¶291

M/s Oil and Natural Gas Corporation, Godavari Bhavan Base Complex, Rajahmundry East Godavari District, Andhra Pradesh^-533106.

¶292

The Commercial Tax Officer/ Assistant commissioner (ST), Alkat Gardens Circle, 46-7-22, 4^^ Floor, jetty Towers, Danavaipet, Rajahmundry- 533103. A.P.

¶293

One CC to Sri A Sarveswar Rao, Advocate [OPUC]

¶294

One CC to Sri D.V.Sivadarshan, Advocate [OPUC]

¶295

Two CCs to GP for Commercial Tax, High Court of^{AndhraPradesh.} [OUT]

¶296

Two CD Copies

RAM

HIGH COURT

DATED:13/03/2024

ORDER IA.No.2 of 2023 IN WP.No.17915of2022

¶301

anoS
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2 5 JUN 202^ CV’ ll
Current Section 3^ y

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IA.No.2 of 2023 IS ORDERED

¶303

IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATi^^>^ (Special Original Jurisdiction)

¶304

WEDNESDAY, THE THIRTEENTH DAY OF MARCH f TWO THOUSAND AND TWENTY FOUR

¶305

PRESENT

¶306

THE HONOURABLE SRI JUSTICE U.DURGA PRASAD RAO AND

¶307

THE HONOURABLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA

¶308

IA.No.3 of 2023 IN WRIT PETITION NO: 17915 OF 2022

¶309

lA NO: 3 of 2023

¶310

Between:

¶311

M/s. GAIL (INDIA) Limited, (A Government of India Undertaking) Rep. by its Chief General Manager (O and M and OIC), Mr. K V S Rao GAIL Bhavan, A.V. Appa Rao Road Raj amahendravaram-533103 E.G Dist A.P. Having its Corporate Office at 16, Bhikaiji Cama Place R k’ Puram, New Delhi, 110066.

...Petitioner

AND

The State of Andhra Pradesh, Rep. by its Principal Secretary to Government, Secretariat, Velagapudi, Amravathi, Guntur Dist., A.P.

¶316

Deputy Commissioner (CT), Commercial Tax Department, Government of Andhra Pradesh, 10-355, 1"' and 2*^ Floor, CT Complex, Ramanayyapeta, Kakinada - 533005.

¶317

M/s Oil and Natural Gas Corporation, Godavari Bhavan Base Complex, Rajahmundry East Godavari District, Andhra Pradesh - 533106.

¶318

The Commercial Tax Officer/ Assistant commissioner (ST), Alkat Gardens Circle, 46-7-22, 4th Floor, jetty Towers, Danavaipet, Rajahmundry-533103. A.P.

¶319

...Respondents

¶320

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the 4*^ Respondent to pass appropriate re-assessment

¶321

orders for the years 2017-18 and 2018-19 by considering the C forms submitted by the Petitioner and to pass fresh orders by granting concessional rate of tax as per the provisions of Section 8(1) of the CST Act.

¶322

WRIT PETITION NO: 17915 OF 2099

¶323

Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ or order or direction more particularly in the nature of a WRIT of MANDAMUS declaring that a)the Endorsements in Ref. R1.97/2021, Dt. 21-08-2021 (Ex. P-1) and in Ref. R1.98/2021, Dt. 21-082021 (Ex. P-2), passed by the 2nd Respondent under the Central Sales Tax Act, 1957, hereinafter referred to as the Act as illegal, arbitrary. contrary to the provisions of Sections. 8(1) and 13 of the Central Sales Tax Act. 1956, and contradict judgments of the Hon'ble Apex Court and Hon'ble Gujarath High Court and against the principles of natural justice consequently b)the 2"^ Respondent may be directed to forthwith process the refund claims of the Petitioner and grant refund of the excess CST amourn of Rs. 168,78,52,079/- collected from the Petitioner and remitted by the 3'"^ Respondent, against the sales of the natural gas by the 3'^^ Respondent to the Petitioner, during the period from 01-07-2017 to 31-122019, or alternatively, c)the Respondent may be directed to submit the C-Forms furnished by the Petitioner to the 3'"^ Respondent for onward submission to the Commercial Tax Authorities and to claim the benefit of concessional rate of tax against the sales of the natural gas to the Petitioner, during the period from 01-07-2017 to 31-12-2019, consequently, the 4**^ Respondent or any other appropriate authority may be directed to.

¶324

Counsel for the Petitioner: SRI A.SARVESWAR RAO Counsel for the Respondents: GP FOR COMMERCIAL TAX Counsel for the Respondents: SRI D.S.SIVADARSHAN

¶325

The Court made the following order:

¶326

For the foregoing reasons, the petition succeeds and is accordingly allowed. The Respondent Nos.2 and 4 are directed to forthwith process the refund claim of the Petitioner for the years 2017-18^and 2018-19 based on statutory C-Forms of the Petitioner and grant^{refundofthetax} amount collected from the Petitioner, which was deposited by Respondent No.3 in accordance with law within a period^{offourweeksof} the receipt of a copy of this Order. It is however, clarified that once the refund claim of the Petitioner is processed. Respondent^No.3 would^not be entitled to claim any such refund for the said period.

¶327

Sd/- M.PRABHAKAR RAO ASSISTANT REGISTRAR

//TRUE COPY//

SEClIoirOFFICER

To,

The Principal Secretary to Government, State of Andhra Pradesh, Secretariat, Velagapudi, Amravathi, Guntur Dist., A.P.

¶332

The Deputy Commissioner (CT), Commercial Tax Department, Government of Andhra Pradesh, 10-355, 1®* and 2"'* Floor, CT Complex, Ramanayyapeta, Kakinada - 533005.

¶333

M/s Oil and Natural Gas Corporation, Godavari Bhavan Base Complex, Rajahmundry East Godavari District, Andhra Pradesh - 533106.

¶334

The Commercial Tax Officer/ Assistant commissioner (ST), Alkat Gardens Circle, 46-7-22, 4'^ Floor, jetty Towers, Danavaipet, Rajahmundry- 533103. A.P.

¶335

One CC to Sri A Sarveswar Rao, Advocate [OPUC] 6. One CC to Sri D.V.Sivadarshan, Advocate [OPUC] 7. Two CCs to GP for Commercial Tax, High Court of Andhra^Pradesh

¶336