Facts of the Case

Kamala Biri Manufacturing Co. Pvt. Ltd., a West Bengal-based registered company, purchased Kendu leaves from the Odisha Forest Development Corporation (OFDC) against five invoices (Bill Nos. 48/2389 to 48/2393) and had submitted Form 'C' declarations for the concessional inter-state tax rate. Despite a 2001 judgment of this Court (confirmed by the Supreme Court in 2007) fixing Central Sales Tax (CST) on such purchases at 4% instead of 20%, OFDC allegedly continued collecting CST at the higher 20% rate, leaving a differential of Rs.1,27,948/- and Rs.1,20,576/- to be refunded, along with interest claimed at 16% per annum. The petitioner filed W.P.(C) No.19068 of 2023 seeking a direction to OFDC for this refund. During the hearing, counsel for the Commercial Tax & GST department (Opposite Party No.2) informed the Court that the excess CST amount had already been refunded to OFDC, and OFDC had in turn asked the petitioner for an indemnity bond and bank details to release the money. The only live dispute was whether interest was payable on the delay.

Issues Involved

  1. Whether the petitioner was entitled to refund of the differential CST amount collected in excess of 4%.
  2. Whether the petitioner was entitled to interest on the delayed refund.
  3. Whether the writ court was the appropriate forum to decide the interest question.

Petitioner's Arguments

  • OFDC continued to charge CST at 20% despite binding precedent fixing the rate at 4% for Kendu leaves purchased against Form 'C'.
  • The differential amounts of Rs.1,27,948/- and Rs.1,20,576/-, along with interest at 16% per annum, ought to be refunded.

Respondent's Arguments

  • The Commercial Tax & GST department confirmed it had already refunded the excess CST to OFDC.
  • OFDC had already asked the petitioner for an indemnity bond and bank details to release the principal amount -- there was no dispute on refund of the principal.
  • The question of interest on the delayed amount was a matter for the appellate forum, not the writ court.

Court Order / Findings

  • The Court recorded that there was no dispute regarding release of the principal differential amount.
  • On the interest component, the Court declined to decide the issue itself and directed the petitioner to approach the appropriate appellate forum.
  • The writ petition was disposed of in these terms, without a finding on the interest claim.

Important Clarification

This is not a GST case; it concerns the pre-GST Central Sales Tax Act, 1956, and the concessional Form 'C' rate applicable to inter-state purchases of Kendu leaves by a biri manufacturer. The order contains no findings on GST law and should not be cited as a GST precedent.

Sections Involved

  • Central Sales Tax Act, 1956 (rate on inter-state sale/purchase against Form 'C')

Decision – In Favour of

The order is largely favourable to the petitioner insofar as it records the department's own confirmation that the excess CST is being refunded; however, the specific claim for interest was not adjudicated by the High Court and was left open for the appellate forum, so the petition was disposed of without a final decision on that part of the claim.

Case Details

Court: High Court of Orissa at Cuttack
Case Number: W.P.(C) No. 19068 of 2023
Coram: Dr. Justice S.K. Panigrahi and Justice G. Satapathy
Date of Order: 13 September 2023

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