The High Court of Madras urged the revenue authorities to restrict the use of C Forms for inter-state purchase of petroleum crude, diesel, petrol, aviation turbine fuel, natural gas and liquor and to provide the online facility for downloading such forms for the dealers.

The High Court dismissed an appeal filed by the Commissioner of Commercial Taxes on the ground that if the sale of the goods was the only criteria of registration under the Central Service Tax (CST) Act, the consequent amendments would not have allowed concessional rate of tax for the purchase of those six commodities for a user in activities like Mining or Telecommunication Networks, where no such resale or use in manufacturing is involved. Such a right is equally available to other industries like Cement Industries and the same cannot be denied to them.

The revenue contended that enactment of the Constitution 101 Amendment and consequential Goods and Service Tax (GST) Laws enacted in all the States and the consequential amendments effected in the CST Act, 1956 also and amendment in the definition of  ‘Goods’ restricting the operation of CST Act for only six commodities like Petroleum Crude, High-Speed Diesel, Motor Spirit (Petrol), Aviation Turbine Fuel, Natural Gas, and Liquor, the Assessee Company or whoever engaged in the manufacture of Cement and other things, which were now covered by the GST Laws were not entitled to purchase such Diesel, etc. these six specified goods against the Declaration Form ‘C’ at the concessional rate on the inter-State purchases of such goods made by them.

The division bench consisting of Justice Vineet Kothar and Justice R. Suresh Kumar directed the revenue authorities to restrict the use of Form ‘C’ for inter-state purchase of petroleum crude, diesel, petrol, aviation turbine fuel, natural gas, and liquor.

“The Appellant State and the Revenue Authorities are directed not to restrict the use of ‘C’ Forms for the inter-State purchases of six commodities by the Respondent/Assessees and other registered Dealers at concessional rate of tax and they are further directed to permit Online downloading of such Declaration in ‘C’ Forms to such Dealers. The Circular letter of the Commissioner dated 31.5.2018 stands quashed and set aside along with the consequential Notices and Proceedings initiated against all the Assessees throughout the State of Tamil Nadu.”