It Calcutta High Court have stated that Tata Steel is entitled to the concession tax rate because they have complied with the provisions in Section 8 of the Central Sales Tax Act.

Division bench of Justice TS Sivagnanam and Judge Supratim Bhattacharya have observed that Tata Steel, as the buying dealer, has the capacity to defend claims for refunds of overtax collected directly from them, and written petitions can be defended.

The court ruled that entitled to the concessional rate of filing taxes, a Form “C” declaration is mandatory. However, the stipulated deadline for submission of such declarations is directory only and not mandatory. The appraisal officer has received a Form “C” declaration. The assessor officer of Indian Oil Corporation Limited (IOCL) was deemed satisfied that there were sufficient grounds preventing the dealer from filing Form C within the time limit.

The court noted that the lower tax rate was given as a result of the central law, and the state of West Bengal is only acting as an agent of the central government to collect the correct tax rate according to the provisions of the CST Act. It is not disputed by the State of West Bengal that the conditions laid down for demanding a lower tax rate have not been complied with by the written applicant. The right to be assessed at a lower tax rate becomes a personal right, and this personal right increases in the interest of the written applicant who has borne the tax burden.

The issue raised was whether the applicant, Tata Steel Limited, was entitled to a refund of the excess central sales tax collected by IOCL and remitted to the State of West Bengal due to the creation of a Form “C” declaration, which has not been disputed by IOCL’s assessment authority. If the answer to this question is “yes”, then the applicant’s written claim for a refund will be defended.

The petitioner, Tata Steel, contested the judgment order dated June 30, 2020, authorized by the department in the Indian Oil Corporation Limited (IOCL) case. A single bench of judges allowed multiple written petitions to the extent that the submission of a Form “C” declaration by IOCL concerned the written petitioner, which was rejected. One bench directed West Bengal State to return an amount of Rs. 24,61,323, which is the amount of the excess differential tax realized from the application letter by IOCL and remitted to the State of West Bengal in connection with the purchase of high-speed diesel oil (HSD).

The appellant, Commercial Tax Commissioner, West Bengal, challenged the order passed by a single judge.

The Petitioner is of the opinion that the obligation to pay taxes lies with the seller. As a result, inquiries about seeking a tax refund by the written applicant, the purchasing dealer, do not arise. Section 8 establishes a concessional tax rate that is granted only to the seller, and no rights are recognized in favor of the buyer. Section 9 regulates the collection and collection of taxes only from sellers. Section 60 of the WBST Act and Section 62 of the WBVAT Act both provide for a refund of overtax payable only to the dealer who paid the overpaid tax under the Act, i.e. the sales dealer, with no rights recognized by law for the dealer. purchase to claim a refund.

The petitioner argues that only the seller is entitled to claim the concessional tax rate. Under Section 8(4), the buyer simply submits a completed Form “C” statement to the seller, allowing the seller to claim the concession; therefore, the purchaser has no right with the taxing authorities to claim lenient tax rates.

Respondents are of the opinion that Form “C” may be made at any stage given the provisions of Section 8(4) of the CST Law read with provisions of Regulation 12(7) of the Central Sales Tax (Registration and Turnover) Regulations, 1957. The written applicant meets all the requirements to be eligible obtain the benefits of concessional tax rates, as can be seen from the stipulations and recorded by the studied warrant. Therefore, the position of the State of West Bengal and the Assessor Officer is that Form “C” is inadmissible without IOCL revising the return.

The Respondent is of the opinion that the written applicant or the purchaser has the right to receive the goods at a reduced tax rate. Similarly, there is a corresponding obligation on IOCL/the seller to sell at the concessional tax rate on receipt of Form “C,” and there is also an associated right on IOCL to be valued at the concessional tax rate.

The court ruled that the refusal to declare a Form “C” was erroneous, unsustainable and illegal.

According to the court, the written applicant is entitled to claim the tax refund directly from the State of West Bengal and is not required to do so through the sales dealer, IOCL.

The court ordered the State of West Bengal to effect a refund of the excess tax collected directly to the warrant applicant within 45 days, together with interest at the statutory rate as stipulated in the WBST Act, from the day after the date of the assessment of the order in the IOCL case is authorized until the date the refund was made.

Case Title: Commercial Tax Commissioner Versus Tata Steel Limited

Excerpt: FMA 857 YEAR 2022

Date: 23.11.2022

Counsel for Appeal: Advocate General SN Mookherjee, Senior Advocate Kavin Gulati, Advocate Anirban Ray, TM Siddique, Debasish Ghosh, Varun Kothari, Sumeet Gadodia, Avi Tandon, Avra ​​Mazumder, Shilpi Sandil Gadodia, Binayak Gupta, Sk. Md. Bilwal Hossain

Respondent’s Counsel: Advocates Jaweid Ahmed Khan, Bhaskar Sengupta, Talha Ahmed Khan

Click Here To Read Order

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