Granting of refund of excess tax paid relative to “C” forms
Fact and issue of the case
Rule returnable forthwith. Mr. Trupesh Kathiriya, learned AGP waives service of notice for and on behalf of the respondents.
The petitioner is a limited company and a public sector undertaking of the Government of India. It is registered with Uttar Pradesh VAT Authority and Haryana VAT Authority. Petitioner entered into “Gas sale and Purchase Agreement” with M/s. Petronet LNG Ltd. Petitioner purchased “Regasified Liquefied Natural Gas” – Commodity Code-04008001 at an agreed price from the Petronet. The goods were transported through pipeline from Petronet, Bharuch Gujarat to premises of the petitioner located in Uttar Pradesh & Haryana.
It is averred that the petitioner procured the said goods at concessional rate of 2% against the production of C- forms before the introduction of Goods & Service Tax regime which was w.e.f.01.07.2017, as per provision of Section 8 of the Central Sales Tax Act, 1956 read with Rule 12 of the Central Sales Tax (Registration & Turnover) Rules, 1957 and Section 4 of the Gujarat Value Added Tax Act, 2003. After introduction of the GST regime, all goods except six commodities viz.crude oil, petrol, diesel, aviation turbine fuel, natural gas and alcoholic liquor, the same continued to be governed by the respective State Value Added Tax Laws as well as CST Act insofar as the inter-State transactions is concerned. It is averred by the petitioner that the VAT authorities across India carried an impression that the dealers were not eligible to claim the benefit of concessional rate of tax available on furnishing C-form against the inter-State transactions as prescribed under Section -8 of the CST Act for the goods used in supply covered under the GST regime. Hence, these authorities had stopped issuing the C-forms. However, on 18.07.2007, the Uttar Pradesh State Government issued an instruction that the C-forms can be issued to the registered dealers under Section-2(d) of the CST Act. Due to non-issuance of the C-forms on the said goods used in manufacturing of GST goods, Petronet charged tax at the full rate of 15% on the inter-State sales made to the petitioner. The said action of non-issuance of the C-form had been challenged by many dealers in their respective High Court and in Carpo Power Limited Vs. State of Haryana [2018 (12) GSTL 248 (P&H)] held that the Sales Tax Department are liable to issue C-forms in respect of the natural gas purchased from the oil companies in Gujarat and used in the generation or distribution of electricity at its power plant at Haryana. This ambiguity resulted into the petitioner paying 15% of tax under the CST Act. However, with the Carpo Power Limited decision (Supra), the decision applied for C-form against the inter-State procurement done from Petronet before the U.P. VAT Authority and before Haryana VAT Authority. They issued C-forms against the purchases made from the Petronet and pursuant to issuance of the C-forms by the respective VAT authority and after clearance of ambiguity, the petitioner furnished the certificates to the respondent authority [through Petronet].
It is further averred that the assessment of Petronet for the F.Y.2017-18, the claim of sales at concessional rate of 2% has been rejected by the respondent no.3 on the ground that the tax had been borne by the petitioner and not by the Petronet. The petitioner was eligible to claim the refund as the tax collected by the Petronet against the sales made to the petitioner had been deposited before the respondent no.3.
On 17.08.2022 the petitioner filed application for refund of excess amount of CST paid before the respondent no.3 and urged for sanctioning the refund claim in terms of the CST Act. On 07.10.2022 and 11.11.2022, once-again the authorized representative visited the office of respondent no.3 inquiring about the refund applications. As no heed was paid, the present petition has been preferred application seeking following reliefs: “11(a) be pleased to issue a writ of mandamus, or a writ in the nature of mandamus, or any other appropriate order or direction for calling upon the refund application of the petitioner and after going through the same, respondents be ordered to sanction the refund amount under the Central Sales Tax Act, 1956 collected from the petitioner and deposited by the seller alongwith interest; or (b) be pleased to issue a writ of mandamus, or a writ in the nature of mandamus, or any other appropriate order or direction directing the respondents, their servants, agents or representatives to adjudicate the refund application filed by the petitioner under Central Sales Tax Act, 1956 forthwith; (c) pending Notice, admission and disposing of this petition, this Hon’ble Court be pleased to direct the respondents, their sub-ordinates, agents or their representatives:
(i) to forthwith sanction the refund claim of the petitioner with such terms and conditions as deemed fit and proper by this Hon’ble Court; or
(ii) to direct the respondents, their sub-ordinates, agents or their representatives to decide the pending refund application forthwith without any further delay; (d) for ad-interim relief in terms of prayer (C) above. (e) for costs of the petitioner be provided; and (f) for such further and other reliefs, as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case.”
This Court issued the notice on 22.12.2022.
Observation by the tribunal
The tribunal has heard the learned advocate Mr. Hardik Modh appearing for the petitioner and Mr. Trupesh Kathiriya, learned AGP for the respondents.
We have requested the learned AGP Mr. Trupesh Kathiriya to take necessary instructions as the legal issue is well settled not only by the decision of Carpo Power Limited decision (Supra), but also by the decision of this Court in the case of K. Cement Ltd. Vs. State of Gujarat [2021(375) E.L.T.113 (Guj.)], where this Court had categorically permitted the petitioner the refund of excess amount of the tax paid to the seller. It was a case where the petitioner had purchased from the Reliance Industries Limited the HSD in the course of inter-state trade for use of mining activities. The petitioners as the ultimate consumers had sought before the Court the amount of excess tax by producing the C-form, which had been issued by the Rajasthan authority. The excess tax had been collected by the seller – Reliance Industries Limited, the CST Authority at Rajasthan. Since they issued the C-form declaration in respect of the transaction in question and the seller had already been collected the tax from the petitioner, the refund was directed not to be given by the Reliance Industries on the ground that it was not entitled to such refund as the claim would be hit by the principles of unjust, enrichment. In that case, the petitioner had furnished the statement showing the details of the purchases, tax charged and submission of ‘C’ forms against the purchases as well as copy of sample invoices, etc. and the Court therefore, held that the petitioner duly complied with the direction issued by the Rajasthan High Court, the respondent authority was bound to process the refund claims under Section-11(B) of the Central Excise Act. The respondents accordingly were directed to 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 stipulated time period.
On seeking instructions, the learned AGP fairly submitted that here all necessary documents have been already furnished by the petitioner. The assessment proceeding for the A.Y. 2017-18 are over and therefore, within four weeks, the authority shall be issuing the order of refund in favour of the petitioner in due compliance of the directions issued in the case of J.K. Cement Ltd. Vs. State of Gujarat [2021(375) E.L.T.113 (Guj.)].
In wake of this categorical submissions on instructions, the petition succeeds. The respondents shall process the refund claim of the petitioner and grant the refund of tax amount collected from the petitioner and deposited by the seller in accordance with law, within period of four weeks from the date of receipt of a copy of this order. It is being clarified that M/s. Petronet LNG Ltd. would not be entitled to claim any such refund in wake of specific facts, which have been tendered before this Court. Rule is made absolute.
The tribunal has ruled in favour of the assessee and dismiss the appeal.