State not to deprive legitimate claim to purchase HSD Oil at Concessional Rate under Central Sales Tax Act: Calcutta HC grants relief to Tata Steels [Read Judgment]

In a major relief to Tata Steels, the Calcutta High Court ruled that state not to deprive legitimate claim to purchase High-Speed Diesel (HSD) oil at concessional rate under Central Sales Tax Act.

The High-Speed Diesel Oil dealers registered under Central Sales Tax Act, 1956, who purchased the said oil during the relevant disputed period from the seller of HSD oil dealers Indian Oil Corporation Limited (IOCL) in West Bengal in course of Inter-State sale, challenging the action of refusal on the part of Respondent State Government of West Bengal in refunding the differential amount of tax collected by it from the petitioners through IOCL in excess of concessional rate of tax on such purchase and the impugned assessment order to the extent of refusal to accept the “C” Forms submitted before the Assessing Officer relating to the said relevant inter-State sale by IOCL to the petitioners, causing the petitioners deprivation of statutory benefit of concessional rate of tax on the relevant purchase of the HSD oil.

The issues raised was whether on the facts and in the circumstances of the case petitioners/purchasing HSD oil dealers who have been denied a refund of excess tax by the Respondent State Government of West Bengal which was admittedly collected by it from the petitioners through the selling oil dealers/IOCL in West Bengal in excess of concessional rate of tax under Section 8 (1) read with Section 8 (3) and 8 (4) of Central Sales Tax Act, 1956 and which were paid under compelling extraordinary circumstances beyond its control of the petitioners, can be called “person aggrieved” and have locus standi to file the instant Writ Petitions.

The single bench of Justice Md. Nizamuddin held that in the instant cases neither petitioners nor IOCL is guilty of any latches and when there is no specific prohibition under the statute against such refund petitioners should not get entangled in the cobweb of procedures and the State should do substantial justice by refunding the amount of tax in question collected by it in excess of statutory concessional rate of tax during the relevant period either to the selling oil dealers/IOCL or to the purchasing oil dealers/petitioners and State should not deprive the legitimate claim of the petitioners to purchase the HSD oil at a concessional rate which is their statutory right under Central Sales Tax Act, 1956, in course of inter-State sale since they have fulfilled the conditions under Section 8 (1) read with 8 (3) and 8 (4) of the Central Sales Tax Act, 1956 by doing what fairness and justice demand of a State and which is the motto of every civilised society.

“Impugned order of assessment passed by the Assessing Officer is set aside to the extent of refusal of acceptance of relevant “C” Forms submitted before him during the impugned assessment proceeding by the HSD oil purchasing dealers/petitioners through the oil selling dealers/IOCL relating to the relevant disputed period which was issued by the purchasing respective State Government, in favor of the petitioners on inter-State sales in question and it shall accept the aforesaid relevant “C” Forms and allow the concessional rate of tax to the petitioners on the basis of the said relevant “C” Forms subject to formal verification of the same,” the court said.

The court further said that the respondent State Government of West Bengal shall within three months from date process and refund the excess amount of tax collected by it from the petitioners oil purchasing dealers in excess of concessional rate of tax through selling dealers/IOCL in West Bengal in course of Inter-State sales in question during the relevant period with interest at the rate of 10% per annum on the basis of relevant “C” Forms submitted by the seller/IOCL during the impugned assessment proceedings, directly to the petitioners instead of refunding the same to the Respondent IOCL after formal verification of the same along with relevant documents and by affording opportunities of hearing to the petitioners and IOCL in course of the said verification and in the alternate it shall refund the said amount to the IOCL after such verification and in that event IOCL shall refund to the petitioners the amounts so refunded within 15 days from the date of receipt of such amount by the Respondent State Government of West Bengal subject to proper indemnification by the petitioners and the Respondent State Government of West Bengal.

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