Recently Punjab & Haryana High Court in the case of Carpo Power Limited vs. State of Haryana and others in CWP No. 29437 of 2017 decided on 28.03.2018 has held that Form – ‘C’ is available to the assesse even after implementation of GST.
Facts of the case:-
1. Petitioner is engaged in the generation of electricity.
(Pls. note generation of electricity is not a criterion for allowing Form – “C”)
2. Natural Gas is used in generation of electricity.
3. Petitioner purchases natural gas from BPCL & HPCL from Gujarat.
4. Petitioner was registered under HVAT Act, 2003 and CST Act, 1956.
5. Petitioner approached assessing authority for issuance of Form – “C”.
6. Assessing Authority refused on the ground that after implementation of GST Form – “C” cannot be issued.
7. Hence, petitioner filed writ petition before Hon’ble P&H High Court.
Hon’ble High Court considered following aspects before deciding the issue:-
1. Definition of Dealer in CST Act, 1956.
2. Definition of Goods in CST Act, 1956 before and after amendment of 2017.
3. Definition of Registered Dealer under CST Act, 1956.
4. Meaning of ‘Sales Tax Laws’ in CST Act, 1956.
5. What is inter-state sale?
6. Liability of payment of CST.
7. Registration under CST Act, 1956.
8. Rate of Tax on inter-state sale.
Hon’ble Court confirmed as follows:-
1. Sale of Natural Gas by BPCL/HPCL from Gujarat to Petition in Haryana is inter –state sale in terms of Section 3(a) of CST Act, 1956.
2. Natural Gas was included in the definition of Goods as per section 2(d) of CST Act, 1956 before amendment of 2017. Hence, Oil companies were liable to pay CST on sale of Natural Gas.
3. Government of Gujarat was empowered to collect the CST.
4. Petitioner was registered dealer in term of section 2(f) read with section 2(d) and 7(2) under CST Act, 1956.
5. Definition of Goods even after amendment of 2017 also included “Natural Gas” as goods.
6. Section 8 prescribes lower rate of tax in case of inter-state sale.
7. This lower rate is subject to furnishing of declaration in the prescribed manner i.e. Form – “C” by the buyer
8. Till date natural gas has not been brought under GST Law.
9. Section 174 of HGST Act, 2017 repeals HVAT Act, 2003 except in respect of goods included in the entry 54 which also include ‘Natural Gas’.
10. Thus HVAT Act, 2003 continue to remain in operation qua natural gas.
11. Effect thereof would be even after implementation of CGST Act the items covered in entry 54 is governed by CST Act.
12. Government stand was petition is not liable to pay tax under HVAT Act, 2003 and the registration under HGST is not relevant.
13. However, Hon’ble High Court held that sale tax law as defined in Section 2(i) of CST Act, 1956 will mean the law for the time being in force in any state for levy of taxes on the sale and purchase of goods. Definition is inclusive not restrictive, hence include HGST Act, 2017 also.
14. Electricity is taxable item under HGST Act, 2017 even if rate of GST on electricity is 0%.
15. Petitioner therefore fulfils all the requirement of section 7(2) of CST Act, 1956 and will be considered as registered dealer under CST Act,1956.
16. Government took stand that petitioner is not engaged in re-selling of these goods hence not entitled for Form “C”.
17. Hon’ble Court said section 8 of the CST Act, 1956 does not restrict the usage of “C” form only for the purpose of Re-Sale. It can be used for re-sale, manufacture, processing or generation/distribution of electricity.
18. Registration under CST Act, 1956 has not been cancelled.
19. Hence, Writ petition allowed.