Jharkhand High Court
M/S. Soni Auto And Allied ... vs The State Of Jharkhand Through Its ... on 23 February, 2022
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(T) No. 4508 of 2021
With
W.P.(T) No. 4509 of 2021
M/s. Soni Auto and Allied Industries Ltd., Adityapur Industrial
Area, Saraikela-Kharsawan through its Executive Director,
Rajib Kumar Lalwani, R/o Adityapur, Saraikela-Kharsawan
---------- Petitioner (in both Cases)
Versus
1. The State of Jharkhand through its Secretary and Commissioner,
Commercial Taxes Dept., Jharkhand, Ranchi
2. Joint Commissioner of Commercial Taxes (Administration),
Jamshedpur Division, Jamshedpur.
3. Joint Commissioner of Commercial Taxes (Appeal),
Jamshedpur Division, Jamshedpur
4. Deputy Commissioner of Commercial Taxes, Adityapur Circle,
Jamshedpur, East Singhbhum
---------- Respondents(in both Cases)
.......
CORAM: HON'BLE MR. JUSTICE APARESH KUMAR SINGH
HON'BLE MR. JUSTICE DEEPAK ROSHAN
Through Video Conferencing
For the Petitioner : Ms. Sumeet Gadodia, Ranjeet Kushwaha, Advocates
For the Respondents : M/s Sachin Kumar, A.A.G.-II (in WPT No.4508/21)
: Mr. Anish Mishra, A.C to G.A.-I (In WPT No. 4509/21)
05/23.02.2022 Heard learned counsel for the parties.
Both the writ petitions relate to the assessment order 2010-11 and
2011-12. Input Tax Credit (I.T.C.) on intra-state stock transfer has been
denied to the petitioner. The Assessing Officer in both the cases has
relied upon judgment rendered by this Court in the case of Tata Steel
Limited in W.P.T. No. 6285 of 2007 dated 24.04.2008. The judgment in
the case of Tata Steel Limited was rendered in respect of the un-amended
Section 18(8)(ix) of the Jharkhand Value Added Tax Act, 2005 (JVAT
Act). The un-amended section 18(8)(ix) is quoted hereunder:
"18(8) No input tax credit under Sub Section (1)
shall be claimed or be allowed to a registered dealer.
xxx xxx xxx
(ix) " In respect of goods used for manufacture of goods
for transfer of stock, or other than by way of sale or for
sale outside the State of Jharkhand.
Provided that in respect of transactions falling
under this clause, input tax credit may be allowed on the
tax paid in excess of 4% on such materials used in
manufacture of the finished goods."
Legislature effected an amendment in 18(8)(ix), which was
initially through an ordinance vide notification dated 07.05.2011. Section
18(8)(ix) was amended w.e.f 01.04.2006. The amended provision reads
as under:
"18(8) No input tax credit under Sub-section (i)
shall be claimed or be allowed to a registered dealer.
xxx xxx xxx
(ix) In respect of goods consumed for manufacture of
goods for interstate transfer of stock or for sale outside
the State.
Provided that in respect of transactions falling under
this clause, input tax credit may be allowed on the tax
paid in excess of 4% of the finished products."
The matter went up to the Commercial Taxes Tribunal. That the
petitioner is covered under Section 18(4) is not disputed. Learned
Tribunal has however interpreted the amended Section of 18(8)(ix) of
the JVAT Act in the manner that I.T.C. won't be available to the assessee
for the reason that in the case of an intra-state transfer of stock if I.T.C is
claimed and allowed, the other unit of the petitioner will have full liberty
to subsequently make an inter-state transfer of stock with no requirement
to claim I.T.C. as he has already availed the same through its unit-II
which would be undoing the mandate of law in terms of Section
18(8)(ix) of the JVAT Act, 2005. That would defeat the legislative
purpose in protecting the interest of State in recovering taxes. Further, it
was observed that there is nothing on record to show that subsequent to
intra-state transfer of stock the goods were to be consumed for
manufacturing purposes and /or were to be sold within the State of
Jharkhand.
Learned counsel for the petitioner, in the aforesaid background
facts placed from the pleadings on record and observations of the learned
Tribunal, submitted that the learned Tribunal has read something in the
amended Section 18(8)(ix), which is not there and denied the claim of
I.T.C. in favour of the petitioner on a presumption that the assessee may
at the end through its second unit possibly make an inter-state sale.
Learned counsel for the petitioner has submitted that this interpretation
by the learned Tribunal does not fit into the scheme of the Act under the
amended provision. The revisional authority in the case of M/s Usha
Martin Limited (Annexure-11) Revision Case No. CC(S) 477/2019 and
on remand, assessment order at Annexure-12 allowed such benefit of
I.T.C. to M/s Usha Martin Ltd. In respect of the other registered dealers
like Tata Steel Ltd. and Tata Motors Ltd. the Revenue have understood
and followed the provision on the correct lines. It is submitted that
petitioner has paid the differential tax pursuant to the assessment orders
but in case the impugned order of the learned tribunal is not stayed, the
sale may have wide cascading effect as under Section 42 of the JVAT
Act, 2005, since the prescribed authority may proceed to re-assess tax
payable by any dealer, even if such orders have become final.
On the same issue the petitioner had approached this Court in
three writ petitions W.P.(T) No. 786 of 2013, W.P.(T). No. 788 of 2013
and W.P.(T) No. 790 of 2013 directed against the assessment order in
which the respondents have been restrained from taking any coercive
steps vide order dated 07.02.2013. It is prayed that the impugned order
of the learned Tribunal be stayed pending final disposal of the writ
petitions.
Learned A.A.G-II Mr. Sachin Kumar and Mr. Anish Mishra, A.C.
to Mr. Ashok Kumar Yadav, G.A.-I representing the State in respective
writ petitions have submitted that the counter affidavit have been filed
yesterday only. Let it be placed on record. It is not disputed by them that
the differential tax has been paid by the petitioner.
On consideration of the submissions of learned counsel for the
parties, we are of the prima facie view that the impugned orders of the
learned Tribunal deserves to be stayed as the learned Tribunal has
proceeded to read something, which is not there in Section 18(8)(ix) of
the amended JVAT Act, 2005. The Assessing Officer and the Appellate
Authority have relied upon the judgment of this Court in the case of Tata
Steel Limited at Annexure-3, which was rendered under the un-amended
provision of section 18(8)(ix) where no I.T.C. would be allowed to a
registered dealer in respect of goods used for manufacture of goods for
transfer of stock or other than by way of sale or for sale outside the State
of Jharkhand, provided that in respect of transaction falling under this
clause, I.T.C. may be allowed on the tax paid in excess of 4% on such
material used in the manufacture of the finished product.
The amended section 18(8)(ix) has been quoted above, which
restricts eligibility to claim I.T.C to a registered dealer in respect of
goods consumed for manufacture of goods for inter-state transfer of
stock or for sale outside the State. It is not the case of the Revenue that
there has been an inter -state transfer of stock or sale outside the State. It
is the case of the Revenue also that it is an intra-state transfer of stock.
As such the impugned judgment dated 10.08.2021 passed in Revision
Application No. JR 74 of 2016 [in W.P.(T) No. 4508 of 2021] and the
impugned judgment dated 10.08.2021 passed in Revision Application
No. JR 206 of 2015 [in W.P.(T) No.4509 of 2021] by the learned
Commercial Taxes Tribunal, Jharkhand, Ranchi are stayed. I.A. No.
6336 of 2021 in W.P.(T) No. 4508 of 2021 and I.A. No. 6337 of 2021 in
W.P.(T) No. 4509 of 2021 are disposed of.
Let the matter be tagged along with W.P.(T) No. 786 of 2013,
W.P.(T). No. 788 of 2013 and W.P.(T) No. 790 of 2013 and listed under
appropriate heading in the 1st week of April, 2022. Parties may exchange
their pleadings in the meantime.
(Aparesh Kumar Singh, J.)
(Deepak Roshan, J.)
A.Mohanty
