Chennai: Madras HC quashes communication from commissioner of commercial taxes
Chennai: The Madras high court has set aside a communication of the commissioner of commercial taxes informing all joint commissioners that any dealer, who deals in petroleum crude, high speed diesel, motor spirit (petrol), aviation turbine fuel, natural gas and liquor, are alone entitled to effect purchases from other state by availing the concessional rate of tax.
Allowing a batch of petitions from M/s The Ramco Cements Ltd and 70 others, Justice K.Ravichandra Baabu directed authorities to permit the petitioners to download ‘C’ forms, as has been done in the past for the purpose of purchasing petroleum products against the issuance of ‘C’ declaration forms.
“As long as the petitioners are having valid registration certificate and as long as section 8 (3) (b) of the Central Sales Tax Act as such is holding the field, the respondents (authorities) are not entitled to deny the benefit derived out of such provision of law to the petitioners, provided they fall under any of the following categories in using the goods so purchased viz., a) in the manufacture of processing of goods for sale, b) in the telecommunication network, c) in mining, d) in the generation or distribution of electricity or any other form of power”, the judge added.
The communication of the commissioner of commercial taxes also directed all the joint commissioners to issue necessary instructions to the assessing officers concerned that wherever approval was required for generation of ‘C’ forms, they should approve after verifying the eligibility for issuing those declarations.
In the very same communication, the commissioner informed that dealers, coming under the categories of major oil companies, major distilleries, major hotels and major clubs, resorts and cultural associations, were entitled to purchase petroleum products and alcoholic liquors as they were dealers in those six commodities.
Setting aside the communication, the judge said it was evident that the authorities have already come to a conclusion that these petitioners were not entitled to generate ‘C’ forms for purchasing petroleum products by way of interstate trade from July 1, 2017, unless these petitioners/dealers were also dealers, who deal with those six goods alone.
In other words, according to the authorities, these petitioners, who were not dealers in those 6 goods and on the other hand, manufacturers/dealers of other goods than the one referred to one under section 2 (d) of the CST Act, after amendment, were not entitled to avail the payment of concessional rate of tax (2 percent) while they purchase petroleum products from outside the state.
“When such purchase is not prohibited anywhere under the CST Act and on the other hand, the said purchase and consequential use of such purchased goods are permitted under section 8 (3) (b), I am of the firm view that the authorities do not have jurisdiction to issue the communications, which in effect, is nullifying the provision made under Section 8 (1), (3) (b) of the CST Act”, the judge added.
