2020 (7) TMI 530 - HC - VAT and Sales Tax

Concessional benefit of tax - purchase of High Speed Diesel from suppliers in other States - difficulty in obtaining C-Form - HELD THAT - Similar issue decided in the case of M/S. DHANDAPANI CEMENT PRIVATE LTD. M/S. TERU MURUGAN BLUE METAL VERSUS THE STATE OF TAMIL NADU THE PRINCIPAL COMMISSIONER COMMISSIONER OF COMMERCIAL TAXES THE ASSISTANT COMMISSIONER (ST) THE JOINT COMMISSIONER (ST) TERRITORIAL THE DEPUTY COMMISSIONER (ST) 2019 (2) TMI 1850 - MADRAS HIGH COURT where it was held that benefit of the concessional rate is available to dealers who purchase High Speed Diesel from neighbouring States by way of inter-state sales. The matter is similar and thus the case is relied upon and similar order passed - petition allowed.

Summary

Issues:
1. Entitlement to 'C' Forms for purchase of High Speed Diesel from suppliers outside Tamil Nadu to avail concessional tax benefits.
2. Applicability of a previous court decision in granting concessional tax benefits.
3. Dispute regarding extending the benefit of the court decision to all dealers.
4. Challenge by the State against the court decision.
5. Filing of a Writ Appeal by the State challenging the decision.

Analysis:
1. The High Court considered the issue of entitlement to 'C' Forms for purchasing High Speed Diesel from suppliers outside Tamil Nadu to avail concessional tax benefits. The court referred to a previous decision where it was held that dealers purchasing High Speed Diesel from neighboring states through inter-state sales are entitled to the concessional rate of tax. This view was supported by decisions of other courts, including the Supreme Court, which confirmed the benefit in similar cases.

2. The court noted that the State did not dispute the favorable position for the assessee regarding the entitlement to 'C' Forms. However, the State indicated its intention to challenge the court's decision in a specific case. The court emphasized that until the decision is stayed or reversed, all Assessing Authorities in Tamil Nadu must apply the rationale of the court's decision to pending assessments.

3. The court addressed the issue of extending the benefit of the court decision to all dealers, rejecting the stand taken by the Assessing Authorities that the benefit could only be extended to parties directly involved in the decision. The court emphasized that decisions of the court and other High Courts, confirmed by the Supreme Court, are applicable to all dealers seeking similar benefits, subject to the law.

4. The court acknowledged the State's challenge against the court decision by filing a Writ Appeal. The court noted that the Writ Appeal raised similar facts and legal considerations as the case before it. Despite the challenge, the court reiterated its view and allowed the writ petition, directing the Department to take necessary action promptly.

5. The court highlighted that a Writ Appeal filed by the State challenging the decision in a specific case was dismissed by a Division Bench of the High Court. The court found complete identity in facts and law between the matters, leading to the reaffirmation of the decision in the present case. As a result, the writ petition was allowed, and the Department was instructed to take immediate action without imposing any costs.