Purchasing Dealer Entitled to Claim CST Refund directly from State of West Bengal, not required to make the Claim through Selling Dealer: Calcutta High Court

CST Refund, dealer, TATA

The Calcutta High Court ruled that the purchasing dealer is entitled to claim CST refund directly from the State of West Bengal and not required to make the claim through the selling dealer.


The writ petitioner is a registered dealer under Section 7 of the Central Sales Tax Act, 1956, in the State of Jharkhand and is engaged in the business of manufacturing and mining. 

The writ petitioner purchased HSD from IOCL by way of interstate sales from the State of West Bengal to the State of Jharkhand. Prior to 01.07.2017, the writ petitioner was issued Form “C” declaration by the State of Jharkhand which was submitted to IOCL, who in turn submitted the same to the prescribed authority in the State of West Bengal to claim concessional rate of tax in terms of Section 8 of the CST Act. 

With effect from July 1, 2017 the definition of “goods” as defined under Section 2(d) was amended by Taxation Law (Amendment) Act, 2017. On October 11, 2017, the State of Jharkhand issued a circular stating that Form “C” declaration will no longer be issued to dealers if the final products manufactured by them do not fall within the amended definition of “goods” in Section 2(d) of the CST Act. 

By office memorandum, the Ministry of Finance, Department of Revenue, Government of India, issued a clarification with regard to the definition of “goods” in Subsection (3) (b) of Section 8 of the CST Act, clarifying that the term “goods” referred to in Section 8 (3) (b) of the CST Act will have the same meaning as defined and amended under Section 2(d) of the CST Act, however it will not affect the provisions of the Section 8(3) (b) of the CST Act relating to tele-communication network or mining or generation or distribution of electricity, or any other form of power.


The division bench of Justice T.S. Sivagnanam and Justice Supratim Bhattacharya on reading of the Section 44 of the Kerala General Sales Tax Act and Section 37(3) of the WBST Act, found that the language of both the Sections are different, this aspect of the matter was dealt with by the Single Bench elaborately to which it fully agree.

The bench observed that the court cannot overlook the mandate of the provisions of the Kerala General Sales Tax Act which clearly rules that only the dealer on whom the assessment has been made can claim for refund of tax and no one else.   

“Once the Form “C” declaration is issued all that the selling dealer can examine is whether the products have been registered in the certificate issued to the purchasing dealer. It is not for the selling dealer to examine as to what use the products were put to by the purchasing dealer and once the statutory form satisfies the basic requirement, nothing further can be done by the selling dealer who has to submit the same to his assessing officer for claiming concessional rate of tax” the court said. 

The court held that the writ petitioner/purchasing dealer has locus standi to maintain the claim for refund of the excess tax collected directly to them and the writ petition.

It was further held that to be entitled to concessional rate of tax filing of Form “C” declaration is mandatory. However, the time limit prescribed for filing such declarations is directory and not mandatory and in the case on hand the assessing officer having accepted the Form “C” declarations and considered the same, it is deemed that the assessing officer of IOCL was satisfied that there was sufficient cause which prevented the dealer from filing Form “C” declaration within the time stipulated under the Act and the rules framed thereunder. 

Case title: Commissioner of Commercial Taxes & Another v/s M/S. Tata Steel Limited & Others

Citation: F.M.A. 857 OF 2022

Date: 23.11.2022

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