TMI Blog2018 (5) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... 1957 as a declaration form for the purpose as specified under Section 8(4) of the CST Act, 1956 and if the registered dealer fails to procure C Form from the respondents / State and thereafter, do not provide C Form to the supplier/seller of another State, then the registered dealer is being exposed to high tax rate imposable on inter-State goods purchases which is much higher as compared to the 2% rate of tax prescribed under the CST. If the declaration C Form is not provided to the sellers of other States, this will lead to increase in the cost of goods being purchased. The CGST Act, 2017 and the Chhattisgarh GST Act, 2017, both have been introduced with effect from 1-7-2017 by the effect of which the statutes which were imposing indirect taxes were repealed and the only indirect taxes that prevailed are the Central GST and the State GST - Section 174 of the CGST Act, 2017 contains a provision pertaining to repeal and saving. It is pertinent to notice that Section 174 of the CGST Act, 2017 does not include the CST Act, 1956 for the purpose of repealing and as such, the operation of the CST Act, 1956 is kept intact even after the enactment of the CGST Act, 2017 with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate, appears on behalf of Mr. B. Gopa Kumar, Assistant Solicitor General of India ORDER 1. The short question involved in this writ petition is, whether the petitioner is entitled to be issued C-Form under the Central Sales Tax Act, 1956 read with the Central Sales Tax (Registration and Turnover) Rules, 1957 in respect of high speed diesel purchased by it in the course of inter-State trade and used by it in the course of manufacturing of cement, after the promulgation of the Central Goods and Services Tax Act, 2017 with effect from 1-7-2017. 2. According to the petitioner, it is a Company registered under the provisions of the Central Sales Tax Act, 1956 (for short, 'the CST Act, 1956') read with the Central Sales Tax (Registration and Turnover) Rules, 1957 (for short, 'the Rules of 1957') and its certificate of registration is valid as on the present date. The petitioner Company is engaged in mining activity of limestone which is used for manufacturing of cement and for which High Speed Diesel is used. The petitioner Company was permitted to purchase goods in the course of inter-State trade at the rates specified in Section 8(1) of the CST Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ightly been denied the privilege of C-Form, as under the provisions of the CST Act, 1956, C-Form has to be issued only to the registered dealer under the said Act. Therefore, the petitioner's registration under the CST Act, 1956 stood cancelled upon the petitioner's registration under the CGST Act, 2017 and thus, the petitioner is not entitled for the privilege of C-Form under the CST Act, 1956 read with the Rules of 1957. It has further been stated that the petitioner has not availed the facility of C-Form so far as High Speed Diesel is concerned, till 30-6-2017, therefore, the petitioner Company cannot be permitted to use the facility of C-Form after coming into force of the CGST Act, 2017 as such, the petitioner has rightly been denied the privilege of C-Form under the CST Act, 1956 read with the Rules of 1957. 5. Mr. Ramit Mehta, learned counsel appearing for the petitioner, would submit that the petitioner is still having the valid registration certificate issued under the CST Act, 1956 read with the Rules of 1957 and the said certificate of registration by which he is entitled to have the privilege of C-Form, has neither been amended nor cancelled by virtue of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has never invoked the privilege of C-Form for high speed diesel prior to 1-7-2017 and as such, high speed diesel is used by the petitioner for the purpose of operation of drill machine at mines, lifting and loading of limestone in dumper, use of diesel as fuel in dumper and other equipments for extraction of limestone from mines and its transportation, use of diesel in plant and machinery such as kiln and other machineries used in manufacture of clinker and cement etc.. Therefore, the petitioner is otherwise also not entitled for issuance of C-Form as he does not fulfill the criteria under Section 8(3)(b) of the CST Act, 1956 and as such, issuance of C-Form to the petitioner is not permissible and the writ petition is liable to be dismissed. He would finally submit that after coming into force of the CGST Act, 2017, the petitioner has not filed any return under the CST Act, 1956, as such, the writ petition deserves to be dismissed. 7. In rejoinder submission, Mr. Mehta would submit that the CST Act, 1956 and the Rules of 1957 have not been repealed and the petitioner is still holding valid certificate of registration under the CST Act, 1956 and the Rules made thereunder and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State trade or commerce, to another registered dealer, is stipulated at the concessional rate of 2% under Section 8(1) of the Act, if the goods are of the description contained in sub-section (3) of Section 8. As regards the goods that do not satisfy the description contained in Section 8(3), the rate of tax payable by a dealer on the turnover of inter-State sales, is as per the rate applicable to the sale or purchase of such goods inside the appropriate State under the Sales Tax Law of that State. 12. Under Section 7(1) of the CST Act, 1956, every dealer, who is liable to pay tax under the CST Act, 1956, should make an application for registration under the Act, to such authority in the appropriate State, as the Central Government may specify. The certificate of registration so issued is liable to be cancelled under sub-section (4) (b) of Section 7, if the dealer fails to pay any tax or penalty payable under the CST Act, 1956. 13. Sub-section (1) of Section 8 of the CST Act, 1956 carves out an exception. If the sale is to a registered dealer and if the sale is of the goods described in sub-section (3), the dealer need not pay tax at the rate prescribed by the local Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each financial year. (2) Where a blank or duly completed form of declaration is lost, whether such loss occurs while it is in the custody of the purchasing dealer or in transit to the selling dealer, the purchasing dealer shall furnish in respect of every such form so lost an indemnity bond in Form G to the notified authority from whom the said form was obtained, for such sum as the said authority may, having, regard to the circumstances of the case, fix. Such indemnity bond shall be furnished by the selling dealer to the notified authority of his State if a duly completed form of declaration received by him is lost, whether such loss occurs while it is in his custody or while it is in transit to the notified authority of his State. Provided that where more than one form of declaration is lost, the purchasing dealer or the selling dealer, as the case may be, may furnish one such indemnity bond to cover all the forms of declarations so lost. (3) Where a declaration form furnished by the dealer purchasing the goods or the certificate furnished by the Government has been lost, the dealer selling the goods, may demand from the dealer who purchased the goods or, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declaration form for the purpose as specified under Section 8(4) of the CST Act, 1956 and if the registered dealer fails to procure C Form from the respondents / State and thereafter, do not provide C Form to the supplier/seller of another State, then the registered dealer is being exposed to high tax rate imposable on inter-State goods purchases which is much higher as compared to the 2% rate of tax prescribed under the CST. If the declaration C Form is not provided to the sellers of other States, this will lead to increase in the cost of goods being purchased. 19. At this stage, it would be appropriate to notice the definition of Section 2(d) contained in the CST Act, 1956 (as it originally stood) which provides as under: - (d) goods includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities; 20. This definition of goods contained in Section 2(d) of the CST Act, 1956 suffered amendment in the Taxation Laws (Amendment) Act, 2017 published in the Gazette of India on 5-5-2017. The amended definition of goods states as under: - (d) Goods means- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944) (except as respects goods included in entry 84 of the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955), the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957), the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978), and the Central Excise Tariff Act, 1985 (5 of 1986) (hereafter referred to as the repealed Acts) are hereby repealed. xxx xxx xxx xxx xxx xxx xxx xxx xxx 24. The aforesaid provision of the CGST Act, 2017 contains a provision pertaining to repeal and saving. It is pertinent to notice that Section 174 of the CGST Act, 2017 does not include the CST Act, 1956 for the purpose of repealing and as such, the operation of the CST Act, 1956 is kept intact even after the enactment of the CGST Act, 2017 with effect from 1-7-2017. 25. Likewise, the Chhattisgarh GST Act, 2017 also makes a provision for repeal and saving. Section 174(1) of the Chhattisgarh GST Act, 2017 provides as under: - 174. Repeal and saving.-(1) Save as otherwise provided in this Act, on and from the date of commencement of this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly known as petrol), natural gas and aviation turbine fuel, shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. 30. Sub-section (2) of Section 9 of the CGST Act, 2017 and the Chhattisgarh GST Act, 2017 clearly provide that GST on crude oil, high speed diesel, aviation turbine, motor spirit (petrol) shall be levied with effect from the date as may be notified by the Government on the recommendations of the GST Council. Therefore, the CGST Act, 2017 has kept the aforesaid six goods away from the ambit of the CGST Act, 2017 and no notification has been issued by the Central Government on the recommendation of the GST Council imposing GST on high speed diesel at a prescribed rate. 31. Thus, the net effect of the aforesaid discussion is that after the promulgation of the CGST Act, 2017 and the State Act, the items mentioned in the amended Entry 54 of the State List of the Seventh Schedule to the Constitution are governed by the CST Act, 1956, as no notification has been issued even under Section 9(2) of the CGST Act, 2017 by the Central Government or by the State Government under Section 9(2) of the Chhattisgarh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to be rejected for reasons, firstly, that the CGST Act, 2017 has not by its repealing provision repealed the CST Act, 1956 which is vivid from the focused perusal of Section 174 of the CGST Act, 2017 and the provisions of the CST Act, 1956 are still applicable for its inter-State trade even after the roll-out of the GST Act confining to goods defined in Section 2(d) of the CST Act, 1956. Secondly, Section 9(2) of the CGST Act, 2017 specifically bars six items including high speed diesel and to levy GST on high speed diesel, recommendation of the GST Council would be necessary to be notified by the Central Government, neither the GST Council has recommended levy of GST on high speed diesel nor it has been notified by the Central Government particularly when prior to introduction of GST with effect from 1-7-2017, the competent legislature has already amended the definition of goods under Section 2(d) of the CST Act, 1956 and purposefully amended the definition of goods mentioning the same items which are barred under Section 9(2) of the CGST Act, 2017 whereby high speed diesel is included. 37. Next submission of the learned State counsel is that after introduction and pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cludes high speed diesel as such, there is no provision under the CGST Act, 2017 which bars holding of registration certificate under the Act other than the CGST Act, 2017. 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 1-7-2017, as the definition of goods as defined in Section 2(d) of the CST Act, 1956 has been amended prior to coming into force of the CGST Act, 2017 from 1-7-2017 which includes high speed diesel. Further, under Section 9(2) of the CGST Act, 2017, the GST Council has not made any recommendation for bringing high speed diesel within the 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 certificate under the CST Act, 1956 is still valid for the goods def ..... X X X X Extracts X X X X X X X X Extracts X X X X
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