Gujarat High Court bench of Justice Sonia Gokhani and Justice Sandeep N. Bhatt directed the department to refund the Central Sales Tax to Indian Oil Corporation.
The petitioner is a limited company and a public sector undertaking of the Government of India, registered with Uttar Pradesh Value Added Tax Authority (VAT) and Haryana VAT Authority.
On 17.08.2022 the petitioner filed an application for refund of excess amount of CST paid and urged for sanctioning the refund claim in terms of the CST Act.
Petitioner entered into “Gas sale and Purchase Agreement” with M/s. Petronet LNG Ltd. Petitioner purchased “Regasified Liquefied Natural Gas” at an agreed price from the Petronet.
The goods were transported through a pipeline from Petronet from Gujarat to premises of the petitioner located in Uttar Pradesh & Haryana.
According to Section 8 of the Central Sales Tax Act of 1956, read with Rule 12 of the Central Sales Tax (Registration & Turnover) Rules of 1957, and Section 4 of the Gujarat Value Added Tax Act of 2003, the petitioner allegedly purchased the aforementioned goods at a discounted rate of 2% against the production of C- forms prior to the implementation of the Goods & Service Tax regime.
The bench noted that 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 Central Sales Tax Act insofar as the inter-State transactions is concerned.
The petitioner claimed that the VAT authorities throughout India gave the impression that dealers were ineligible to take advantage of the reduced tax rate available on filing Form C-form against interstate transactions. Because of this, several agencies ceased issuing C-forms.
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 division bench ordered the respondents to process the petitioner’s refund application and award the return of the tax amount that had been dutifully received from the petitioner and submitted by the seller.
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