CST Act | After 20 Yrs, Gujarat High Court Permits PSU To Claim Branch Transfer Exemption Denied For Non-Production Of Original 'Form-F'

After almost 20 year litigation, the Gujarat High Court permitted a public sector energy enterprise to claim branch transfer exemption of over Rs 6 crore under the Central Sales Tax Act, which was denied earlier on non-production of the original Form-F. 

Form F is a document used for branch transfer of goods in the course of inter-state trade, which permits claiming of exemption from Central Sales Tax (CST) on such transactions. 

A division bench of Justice AS Supehia and Justice Pranav Trivedi observed that matter pertains to Assessment Year 2003-04, and the litigation had been going on for "almost 20 years partially for non-production of Form 'F'".

The court said, "It is settled law that the assessee is eligible in reduction rate tax under the Central Sales Tax Act, 1956 on production of Form 'C' for inter state sale and Nil rate of tax on production of Form 'F' for branch transfer. The authority has not disputed the fact that the transaction was a branch transfer and Form 'F' was duly certified and issued by the authority. The only issue is the production of Form 'F' on piecemeal basis.The petitioner has produced certain Form 'F' before the First Appellate Authority and certain portion of Form 'F' before the Tribunal and now the last Form 'F' is produced before this Court. The transactions of Rs.6,29,59,345/- were not considered due to non-production of the original Form. Now the original Form is produced and verified by the authority".

The court noted the petitioner's counsel's assurance that the claim of the amounts for which Form 'F' has not been produced, would not be contested by the petitioner afterwards and the dues subsequent to non-production of the remaining Form 'F' will be paid by the petitioner in accordance with law.

The court said:

"As the controversy in the petitioner is in very narrow compass and relates only to production of Form 'F' and claim of legitimate right of the petitioner, this Court is inclined to accept the prayer of the petitioner to the aforesaid extent. Hence, Form 'F' being Form No. 158386 dated 22.03.2008 to the tune of Rs.6,29,59,345/- are allowed to be considered in view of the averments made by the respondents in the affidavit-in-reply...In view of the above, the present writ petition is allowed to the extent of considering of Form 'F' produced by the petitioner and as verified by the respondent. The respondent shall ascertain the remaining transactions and the same would be payable by the petitioner within a period of twelve weeks from the date of passing of this order". 

The petitioner company is an oil marketing Company as well as a public sector undertaking, and had obtained a valid certificate registered under The Gujarat Value Added Tax Act (GVAT) and Central Sales Tax Act.

For the Assessment Year 2003-04, the assessment was made under GVAT Act. The petitioner was required to furnish Form 'F' for its branch transfer for the year under consideration. As the petitioner failed to do so, the Assessing Officer calculated demand to the tune of Rs.108,59,07,018 and passed the assessment order on 26.03.2008.

The petitioner filed an appeal under GVAT Act which was dismissed on ground of non-payment of pre deposit before the First Appellate Authority. However, the Tribunal directed the petitioner to pay Rs.3,00,000 as pre deposit and remanded the matter to the authority. 

After the remand, the petitioner appeared before the First Appellate Authority and submitted certain portion of statutory Form 'F'. However, the Authority did not consider such production leading to second round of litigation before the Tribunal through a Second Appeal. The Tribunal again remanded the matter to the First Appellate Authority for consideration of partial production of Form 'F'.

The petitioner approached the authority and claimed an amount of Rs.63,99,41,576/- as branch transfer on production of Form 'F'. The authority in its 14.10.2016 order accepted partial production of Form 'F' and branch transfer amounting to Rs.63,99,41,576 was allowed and transactions to the tune of Rs.89,42,56,896 were disallowed for non-production of Form 'F'.

The petitioner again filed a Second Appeal before Tribunal and again produced Form F. The Tribunal was pleased to allow sales of Rs.25,43,15,300 as branch transfer on production of Form 'F'. However, out of the same one branch transfer of Rs.6,29,59,345 was not considered despite production of Form 'F'.

The Tribunal in the third round of litigation dismissed the claim of the petitioner to the tune of Rs.6,29,59,345 as the relevant Form 'F' was in "duplicate and not original". The petitioner argued that it was shifting premises and hence could not produce the original form; this was not accepted and the petitioner's claim was rejected. 

The petitioner moved an application before the tribunal for submitting the form F however this was rejected. Against this the petitioner moved the high court. 

The petitioner's counsel said that claim of Rs.6,29,59,345 would be the last claim for Assessment Year 2003-04. It was assured that whatever claim remains on non-production of remaining Form 'F' would not be contested in future. Before the high court the petitioner has produced original Form 'F' to the tune of Rs.6,29,59,345 and requested that the same may be allowed. 

Counsel for respondent submitted that Assessing Officer has verified the veracity of the original Form 'F', which is in accordance with law adding that appropriate order may be passed.

The plea was disposed. 

Case title: M/S HINDUSTAN PETROLEUM CORPORATION LIMITED v/s  THE DEPUTY COMMISSIONER OF STATE TAX & ANR.

R/SPECIAL CIVIL APPLICATION NO. 8843 of 2025

Counsel for petitioner: Advocate Apurva Mehta

Counsel for respondent: Advocate Shrunjal T. Shah

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