Hotline CPT Ltd. vs State of M.P.

Heard. The petitioner has filed this petition for refund of amount of Rs. 25,34,173 recovered from the petitioner as commercial tax on account of purchase of high speed diesel.

As per the petitioner, it had an exemption from payment of tax. The petitioner-company is a public limited company incorporated under the Indian Companies Act. It had installed a factory at Malanpur, District Bhind. The company was registered under the provisions of the Madhya Pradesh Commercial Tax Act, 1994 and also under the Central Sales Tax Act, 1956. It was granted exemption from payment of commercial tax and Central sales tax under the provisions of Madhya Pradesh Commercial Tax Act and Central Sales Tax Act for a period with effect from March 28, 1997 to March 27, 2008. An eligibility certificate was issued in favour of the petitioner-company on January 21, 2001. The petitioner had been getting high speed diesel without payment of tax from respondent Nos. 5 and 6. However, the Commercial Tax Department, State of Madhya Pradesh issued a direction to respondent Nos. 5 and 6 that it shall not sell the high speed diesel to the companies on the basis of exemption certificate without payment of tax. Thereafter, respondent Nos. 5 and 6 charged tax from the petitioner-company of Rs. 25,34,173 on a total value of diesel of Rs. 1,26,70,869 for the period with effect from June 5, 2000 to July 6, 2000. After the aforesaid period, the respondent Nos. 5 and 6 did not charge tax in accordance with the order passed by the High Court.

The petitioner-company submitted an application to Bharat Petroleum Corporation Limited in regard to refund of tax. The corporation informed the petitioner that the petitioner shall contact the Sales Tax Department and confirm the status of set off. Thereafter, the petitioner submitted a representation to the Commissioner, Commercial Tax, M. P., that representation has been rejected vide order dated December 3, 2004 (annexure P/1) filed along with the petition.

It is an admitted fact that the petitioner was granted exemption of tax under the provisions of the Madhya Pradesh Commercial Tax Act and Central Sales Tax Act for the period with effect from March 28, 1997 to March 27, 2008 in accordance with the circular issued by the State Government. The petitioner had paid tax of diesel which was purchased by the petitioner from respondent Nos. 5 and 6 as raw material and respondent Nos. 5 and 6 paid the tax to the State of Madhya Pradesh because they had collected the tax from the petitioner.

Respondent Nos. 5 and 6 in their return pleaded that the charge of rate of diesel from the petitioner including the tax is in accordance with the instructions issued by respondent No. 2 and at per the rate fixed by respondent No. 2. Because the tax has been paid by respondent Nos. 5 and 6 to the State, hence, respondent Nos. 5 and 6 are not liable to refund the tax.

This court in Writ Petition No. 312 of 1998 (SRF Limited v. State of Madhya Pradesh) vide order dated May 9, 2000 has held that in accordance with the eligibility certificate, the company is entitled to exemption from payment of tax on petrol, light diesel oil and high speed diesel oil if it was used for in-house consumption. The appeal, i.e., Writ Appeal No. 194 of 2006 filed by the State of M. P. was also dismissed vide order dated July 20, 2011 by the Division Bench of this court.

In the present case, the petitioner had paid the tax to respondent Nos. 5 and 6 on account of purchase of diesel for its in-house consumption and respondent Nos. 5 and 6 had paid the aforesaid tax to the State Government. The tax was paid in accordance with instructions issued by the Commercial Tax Department to respondent Nos. 5 and 6.

In such circumstances, the petitioner is entitled for the refund of amount from the State. Hence, the petition of the petitioner is allowed. The authorities-respondent Nos. 1 to 4 are directed to refund the amount of Rs. 25,34,173 (rupees twenty five lacs thirty four thousand one hundred seventy three) to the petitioner within a period of three months from the date of receipt of copy of this order. No order as to costs.