Nafr High Court
Case Details
1 TAXC Nos. 159, 155 & 175 of 2025 ANKIT KUMAR SINGH Digitally signed by ANKIT KUMAR SINGH Date: 2025.08.13 10:46:33 +0530 2025:CGHC:39406-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 159 of 2025 M/s Jayaswal Neco Industries Ltd., Siltara Raipur. Commissioner of Commercial Tax Raipur. versus --- Appellant --- Respondent TAXC No. 155 of 2025 M/s Jayaswal Neco Industries Ltd. Siltara Raipur C.G. --- Appellant Commissioner of Commercial Tax Raipur C.G. Versus --- Respondent TAXC No. 175 of 2025 M/s Jayaswal Neco Industries Ltd., Siltara, Raipur Commission of Commercial Tax Raipur Versus --- Appellant --- Respondent 2 TAXC Nos. 159, 155 & 175 of 2025 For Appellants
Legal Reasoning
:- Mr. Jitendra Sahu, Advocate, on behalf of Mr. Neelabh Dubey, Advocate. For Respondents :- Mr. Rahul Tamaskar, Government Advocate. Division Bench Hon'ble Shri Justice Sanjay K. Agrawal & Hon'ble Shri Justice Sachin Singh Rajput Judgment On Board (07.08.2025) Sanjay K. Agrawal, J 1. Since the common question of law and facts are involved in the present tax cases, they have been clubbed together, heard
Decision
together and being disposed off by this common order. 2. The Chhattisgarh Commercial Tax Tribunal in exercise of power conferred under Section 55(2) of the Chhattisgarh Value Added Tax Act, 2005 (for brevity “the VAT Act”) has referred the following question for determination:- 1. Whether the Ld. Tribunal erred in maintaining the assessment and appeal order in spite of fact that the Hon’ble Bombay High Court has decided the issue on the powers u/s 8(1) and 8(2) of the State Act. 2. Whether the finding of the Ld. Tribunal is perverse as it failed to consider the relevant decisions relied upon by the applicant/assessee which dealt with identical issue and deliberated and interpreted the amendment brought in Section – 8(5) elaborately. 3 TAXC Nos. 159, 155 & 175 of 2025 3. Whether the Ld. Tribunal failed to read the amended provision of section – 8(5) of the Central Sales Tax Act Correctly specifically in the light of decision of the Hon’ble High Court of Bombay in the Case of M/s Prism Cement Limited Vs. State of Maharashtra being Reported in {2012} 54 VST 104.” 3. Mr. Jitendra Sahu, learned counsel for the appellants, would submit that question of law referred by the Chhattisgarh Commercial Tax Tribunal is covered by the decision rendered by this Court in the matter of Jayaswal Neco Industries Ltd. v. State of Chhattisgarh and Ors 1 . 4. Mr. Rahul Tamaskar, learned State counsel, would support the submission made by learned counsel for the appellant and submit that the question of law has already been answered by this Court in the matter of Jayaswal Neco Industries Ltd. (supra) and, therefore, the matter be disposed of accordingly. 5. We have heard learned counsel for the parties, considered their submissions made herein-above and gone through the records with utmost circumspection. 6. In the case of Jayaswal Neco Industries Ltd. (supra) this Court has held as under:- 1 WPT No.93 of 2017; decided on 11.03.2025 4 TAXC Nos. 159, 155 & 175 of 2025 “8. It is not in dispute that pursuant to the notification dated 3-6-1993, the petitioner Company was granted exemption as the petitioner Company is said to have invested more than ₹ 1,000 crores in Integrated Steel Plant and the benefit of exemption started from 22-9- 1996, thereafter on 10-5-2002, Section 8(5) of the CST Act was amended making fulfillment of Section 8(4) of the CST Act (production of C-Form) mandatory for availing the benefit of exemption under Section 8(5) and pursuant to the notification dated 10-5-2002 making production of C-Form mandatory, the State Government issued notification dated 31-10-2006 in exercise of the powers conferred by Section 15-B & 72(i)(b) of the Chhattisgarh VAT Act read with sub- section (5) of Section 8 of the CST Act incorporating the amended provisions of Section 8(5) of the CST Act by which filing / production of C-Form has been made mandatory for availing the benefit of exemption under Section 8(5) of the CST Act which the petitioner Company has called in question in the instant writ petitions. However, in this regard, decision of the Bombay High Court in Prism Cement Limited (supra) was assailed before the Supreme Court by the State of Maharashtra in Prism Cement Limited's case (supra) in which their Lordships have considered the issue with respect to Section 8(5) of the CST Act clarifying the legal position and held that such restrictions are prospective in nature and would not apply retrospectively to cases where absolute exemption was 5 TAXC Nos. 159, 155 & 175 of 2025 permitted much prior to the amendment. It has been observed in paragraph 17 as under: - “17. The aforesaid amendment regulates the power conferred upon the State Government under Section 8(5) of the CST to grant exemption/partial exemption from tax to dealers on inter-State sales, trade and commerce subject to the fulfilment of the requirements laid down in sub-Section (4) of the Section 8 i.e., of production of Form ‘C’ and ‘D’ as the case may be in contrast to the absolute power of exemption/partial exemption that was permitted under the unamended Act. It is worth noting that the aforesaid amendment is prospective in nature and has been made applicable with effect from 11.05.2002 and is not applicable from any anterior date or to transactions prior to the aforesaid date. In other words, the absolute power initially conferred under Section 8(5) upon the State Government to grant in exemption/partial connection with inter-State sale, trade or commerce with was circumscribed and restricted to the fulfilment of the requirement of Section 8(4) of the CST Act which prescribes for the submission of Form ‘C’ and ‘D’ only w.e.f. 11.05.2002. However, such restrictions are prospective in nature and would not apply retrospectively to cases where absolute exemption was permitted much prior to the amendment.” exemption of tax the amendment 9. Thereafter, their Lordships also considered whether the aforesaid amendment in Section 8(5) of the CST Act would take away the right which had accrued to the asseseee under the Eligibility/Entitlement certificates wherein absolute exemptions were granted 6 TAXC Nos. 159, 155 & 175 of 2025 without any condition of submission of Form 'C' and 'D'. Ultimately, their Lordships held that the State Government is not justified in taking away such a right accrued to the assessee on mere prospective amendment of Section 8(5) of the CST Act without revoking the Entitlement Certificate & notice or opportunity of hearing, and observed as under: - “28. Moreover, the law is settled that if a substantive right has accrued to a person, it cannot be taken away unilaterally without notice or an opportunity of hearing to the said person. Thus, after the amendment of Section 8(5), the Government was not authorised to pass a unilateral order affecting the rights of the assessee-respondent for claiming absolute exemption from payment of tax. The assessee- respondent was not given any notice either cancelling the Eligibility Certificate or the Entitlement Certificate. Therefore, without revoking the said certificates, the substantive right which had accrued to the assessee- respondent thereunder continues to subsist and does not get impacted by the subsequent amendment of Section 8(5) inasmuch as there is nothing in the amended provision which provides for taking away such a right granted to the assessee-respondent. 29. The State Government while applying the aforesaid amended Section 8(5) was not justified in taking away such a right accrued to the assessee-respondent on mere prospective amendment of Section 8(5) without revoking the Entitlement Certificate dated 24.03.1998 without notice or opportunity of hearing. In view of the above facts and 30. circumstances, on the above short point, the State Government was not competent to issue 7 TAXC Nos. 159, 155 & 175 of 2025 the impugned notices for revising the assessment of the assessee-respondent and to demand the exempted tax only for the reason that the assessee-respondent has not submitted Form ‘C’ and ‘D’ in support of inter-State sale, trade & commerce. The requirement of submission of Form ‘C’ and ‘D’ would apply prospectively after 11.05.2002 i.e., after the Finance Act of 2002. Accordingly, in our opinion the appeal lacks merit and hence dismissed.” 10. Reverting to the facts of the case in light of the aforesaid decision of the Supreme Court, it is quite vivid that the petitioner Company has been granted absolute exemption from the tax liability on fulfillment of certain conditions as per the notification dated 3-6- 1993 and as per the decision of the Supreme Court, the amendment made in Section 8(5) of the CST Act making the production of C-Form mandatory for availing benefit of tax exemption wold apply with effect from 10-5-2002 and the amended provision of Section 8(5) with effect from 10-5-2002 would apply prospectively to the transactions in respect of which Eligibility Certificate are issued subsequently, as held by their Lordships of the Supreme Court. It is made clear that notification dated 31-10-2006 would not apply to the petitioner Company as they had already been exempted with effect from 22-9-1996, as the exemption was available up to 21-9-2019 and now, on coming into force of the GST regime up to 30-6-2017. In that view of the matter, notification dated 31-10- 2006, would not apply to the petitioner Company and exemption would be available as per the notification dated 3-6-1993 up to 30-6-2017. Consequently, order 8 TAXC Nos. 159, 155 & 175 of 2025 dated 26-11-2016 (Annexure P-4 in WPT No.93/2017) passed by the Chhattisgarh Commercial Tax Tribunal, Raipur in Case No.A/65/15/ 2016/Central and assessment order dated 18-6-2010 (Annexure P-3 in WPT No.122/2016) issued for the assessment year 2006-2007, are hereby quashed. The petitioner Company would be entitled for the benefit of exemption without submission of C-Form.” 7. In view of the above, all the question of law answered accordingly and held that the applicant Company would be entitled for the benefit of exemption without submission of C- Form. 8. Consequently, the tax cases stand disposed off. Sd/- Sd/- (Sanjay K. Agrawal) Judge (Sachin Singh Rajput) Judge Ankit