{W.P.(T)No.133/2016} 2025:CGHC:11991-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 133 of 2016 Order reserved on: 27-2-2025 Order delivered on: 11-3- 2025 M/s Godawari Power and Ispat Ltd., A Company incorporated under the Companies Act, 1956 having its Registered Office at Plot No. 428/2, Phase I, Industrial Area, Siltara-493111, Raipur, Chhattisgarh, through its Authorized Signatory, Shri N.U. Bhaskar, S/o Late Shri N. Gowresikra, Aged about 56 years, R/o Quarter No.C-45, Ekta Nagar, Sector-I, Gudiyari, Raipur, Chhattisgarh ... Petitioner versus 1. State of Chhattisgarh, through Secretary, Department of Commercial Taxes, Mahandi Bhavan, Naya Raipur, Raipur, Chhattisgarh 2. Commissioner of Commercial Tax, Vanijyik Kar Bhavan, Civil Lines, Raipur, Chhattisgarh 3. Assistant Commissioner, Commercial Tax, Vanijyik Kar Bhavan, Raipur, Chhattisgarh ... Respondents For Petitioner : Mr. Neelabh Dubey, Advocate. For Respondents/State : Mr. Rahul Tamaskar, Government Advocate. Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Sanjay Kumar Jaiswal, JJ. C.A.V. Order Sanjay K. Agrawal, J. 1. Petitioner M/s. Godawari Power and Ispat Ltd. has filed this writ petition only for clarification of notification No.F-10/101/2006/CT/V/(94) dated 31-10-2006 (Annexure P-4) issued by the State of Chhattisgarh in SISTA SOMAYAJULU Digitally signed by SISTA SOMAYAJULU Date: 2025.03.12 17:49:56 +0530 {W.P.(T)No.133/2016} exercise of the powers conferred by Section 15-B & 72(i)(b) of the Chhattisgarh Value Added Tax Act, 2005 (for short, 'the Chhattisgarh VAT Act') read with sub-section (5) of Section 8 of the Central Sales Tax Act, 1956 (for short, 'the CST Act') incorporating the amended provisions of Section 8(5) of the CST Act. 2. It is the case of the petitioner that the petitioner Company is engaged in the business of manufacture and sale of iron and steel products and was registered with the Commercial Tax Department. The petitioner Company was exempted from payment of taxes including Central Sales Tax under the notification dated 07-11-1997 from 07-11-1997 till 18-04- 2001, however, the benefit of exemption was later extended till 17-04- 2013. It is the further case of the petitioner that sub-section (5) of Section 8 of the CST Act was amended on 10-5-2002 with effect from 11-5-2002 mandating the assessee to fulfill the requirement of Section 8(4) of the CST Act and consequently, after the amendment, the assessee was required to furnish declaration in Form C to avail the benefit of exemption. Consequently, the State Government issued notification dated 31-10-2006 incorporating the requirement as mentioned in the amended provisions contained in Section 8(5) of the CST Act 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. The petitioner was denied the benefit of exemption in absence of Form C for the relevant assessment year and assessment order was passed by the Assessing Officer which was unsuccessfully assailed in first appeal and {W.P.(T)No.133/2016} thereafter in second appeal leading to filing of the instant writ petition seeking clarification of notification No.F-10/101/2006/CT/ V/(94) dated 31-10-2006 (Annexure P-4). It is also the case of the petitioner that the petitioner Company was granted the benefit of exemption by notification dated 07-11-1997 in the year 1996 for a period of 14 years and the benefit of exemption so granted was the vested right as on 1996 which has been extended up to 17-04-2013 and vested right cannot be taken away from the petitioner Company by issuing subsequent notification with retrospective effect. It is also the case of petitioner that the notification would not apply to the petitioner Company so far as the tax exemption and acting on the concession granted by the State Government, the petitioner Company has made huge investment of more than 550 crores and thus entitled for exemption applicable up to 17-04- ₹ 2013, which cannot be taken away on the principle of promissory estoppel and which has been sought to be quashed. 3. Return has been filed by the State / respondents stating inter alia that though the benefit of exemption from payment of taxes including Central Sales Tax was granted to the petitioner Company under the notification dated 07-11-1997 which was applicable up to 18-4-2001 and extended till 17-04-2010, but by virtue of notification dated 31-10-2006, exemption would be applicable only upon fulfillment of conditions prescribed under Section 8(4) of the CST Act. It has been further stated that the decision of the Bombay High Court in the matter of Prism Cement Limited and another v. State of Maharashtra and others1 on 1 [2012] 54 VST 104 (Bom) {W.P.(T)No.133/2016} which reliance has been placed by the petitioner Company, is not applicable to the facts of the present case and it has no force and statutory power has been exercised by the Government which is strictly in accordance with law. As such, both the writ petitions deserve to be dismissed. 4. Mr. Neelabh Dubey, learned counsel appearing for the petitioner Company, would submit that the issue involved in the writ petition now stands conclusively decided by their Lordships of the Supreme Court in the matter of The State of Maharashtra and others v. Prism Cement Limited and another2, as such, the writ petition deserves to be allowed. 5. Mr. Rahul Tamaskar, learned Government Advocate appearing for the State/respondents, would submit that no ground is made out for questioning the constitutional validity of notification dated 31-10-2006 (Annexure P-4), as legal position with respect to the applicability of Section 8(5) of the CST Act and consequent notification has been clarified by the Supreme Court in Prism Cement Limited's case (supra). He would further submit that the petitioner Company has challenged the notification dated 31-10-2006 after almost ten years and as such, the writ petition deserves to be dismissed. 6. We have heard learned counsel for the parties and considered their rival submissions made herein-above and also went through the record with utmost circumspection. 2 2025 SCC OnLine SC 298 {W.P.(T)No.133/2016} 7. It is not in dispute that pursuant to the notification dated 07-11-1997, the petitioner Company was granted exemption as the petitioner Company is said to have invested more than 550 crores in Integrated Steel Plant ₹ and the benefit of exemption started from 07-11-1997, 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 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 {W.P.(T)No.133/2016} 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 exemption/partial exemption of tax in connection with inter-State sale, trade or commerce with the amendment 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.” 8. 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 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 without 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 {W.P.(T)No.133/2016} 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. 30. In view of the above facts and circumstances, on the above short point, the State Government was not competent to issue 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.” 9. 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 07-11-1997 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 {W.P.(T)No.133/2016} 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 07-11-1997, as the exemption was available up to 17-04-2013. 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 07-11-1997 up to 17-04-2013. The petitioner Company would be entitled for the benefit of exemption without submission of C-Form. 10.The writ petition is allowed to the extent indicated herein-above. No order as to cost(s). sd/- sd/- (Sanjay K. Agrawal) (Sanjay Kumar Jaiswal) JUDGE JUDGE Soma