M/S Jalan Carbon & Chemicals Pvt. ... vs State Of Jharkhand
2023 Latest Caselaw 31 Jhar

             IN THE HIGH COURT OF JHARKHAND AT RANCHI
                                     W.P (T) No. 3845 of 2017

             M/s Jalan Carbon & Chemicals Pvt. Ltd., Saraikela-Kharswan through
             Its various signatory Ashok Kumar Sharma ---       ---   Petitioner
                                            Versus
             1. State of Jharkhand
             2. Secretary-cum-Commissioner, Commercial Taxes Department, Ranchi
             3. Joint Commissioner of Commercial Taxes (Administration),
                 Jamshedpur Division, Jamshedpur, East Singhbhum
             4. Deputy Commissioner of Commercial Taxes (Adityapur Circle),
                 Jamshedpur, East Singhbhum
             5. Assistant Commissioner of Commercial Taxes (Singhbhum Circle),
                 Jamshedpur, East Singhbhum               ---   ---  Respondents

                                                   With
                                         W.P (T) No. 2786 of 2017
             M/s Sai Cylinders Pvt. Ltd., Singhbhum East through its one of the Directors
             Sri Gagan Agarwal                            ---   ---    Petitioner
                                              Versus
             1.     State of Jharkhand
             2. Secretary-cum-Commissioner, Commercial Taxes Department, Ranchi
             3. Joint Commissioner of Commercial Taxes (Administration),
                 Jamshedpur Division, Jamshedpur, East Singhbhum
             4. Deputy Commissioner of Commercial Taxes (Singhbhum Circle),
                 Jamshedpur, East Singhbhum
             5. Assistant Commissioner of Commercial Taxes (Singhbhum Circle),
                 Jamshedpur, East Singhbhum               ---   ---    Respondents

                                                      ---

CORAM: Hon'ble The Acting Chief Justice Hon'ble Mr. Justice Deepak Roshan

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For the Petitioner: M/s Rahul Lamba, Naveen Kumar, Advocates For the Resp.-State: M/s Md. Shahabuddin, S.C-VII Suraj Prakash, A.C to S.C-VII

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05 / 03.01.2023 Both the writ petitions sought a declaration that proviso inserted to Clause-(iii) of Sub-Section (4) of Section 18 of JVAT Act, 2005 by virtue of the Jharkhand Value Added Tax (Amendment) Act, 2015 vide Notification dated 08.02.2016, is ultra-vires the Constitution of India and volative of Article 14 and 301 thereof. One of the challenge was also to the retrospective application of the impugned provisions with effect from 01.04.2015. Petitioners also prayed that the Notification dated 17.02.2017, whereby Rule 26 of Jharkhand Value Added Tax Rules, 2006 have been amended, cannot be given effect to with retrospective effect i.e. from 01.04.2015.

2. However, the issue is no longer res-integra as has also been brought to the court's notice by the learned counsel for the petitioners. A Coordinate

Bench of this Court, of which one of us (Deepak Roshan, J) was also a Member, has by judgement dated 29.01.2020 passed in W.P (T) No. 134/2016 (M/s. Ramkrishna Forgings Limited versus The State of Jharkhand & others) and other analogous cases, decided the issue in the following manner.

"54. In view of cumulative facts and circumstances mentioned hereinabove, we summarise our judgment as follows:- (I) The challenge to the proviso inserted to clause (ii) and 61 Clause (iii) of sub-section 4 of Section 18 of the JVAT Act, fails in view of the fact that the petitioners have not pressed the same during the course of their arguments.

(II) Retrospective effect given to the proviso inserted to clause(ii) and Clause(iii) of sub-section 4 of Section 18 of the JVAT Act, vide Amendment Act contained in Notification dated 8.2.2016, is hereby, set aside and struck down and it is declared that said provision shall have prospective effect with effect from 8.2.2016 only.

(III) The challenge to the provision contained in clause (xviii) of sub-Section 8 of Section 18 of the JVAT Act, fails and the said provision is declared intra vires and within the legislative competence of the State Government.

(IV) It is declared that the State Government has no power to frame rules with retrospective effect, and accordingly, the retrospective effect given to Rule 26(11A) of the JVAT Rules vide amending notification dated 17.2.2017 with effect from 1.4.2015, is hereby quashed and set aside, and it is declared that Rule 26(11A) shall have only prospective operation w.e.f. 17.2.2017 and onwards.

(V) In view of fact that Rule 26 (11A) has been declared to be prospective in operation i.e. w.e.f. 17.2.2017, it is hereby declared that for the period 23.09.2015 to 16.2.2017 proviso inserted to clause(ii) and Clause (iii) of sub-section 4 of Section 18 of the JVAT Act cannot be given effect to in absence of any machinery provision and no forfeiture of ITC shall be given effect to during the period 23.09.2015 to 16.2.2017, and any scrutiny order/assessment order and/or any order having effect of forfeiture of ITC for the aforesaid period are hereby quashed and set aside."

3. Learned counsel for the petitioners submits that the State had gone in appeal against the decision at Para-54 (V) of the judgment in Special Leave to Appeal (C) No (s). 1982/2021 (The State of Jharkhand & Ors. Versus M/s Ramkrishna Forgings Limited) and other analogous cases. The Apex Court has, by judgment dated 07.09.2021, refused to entertain the challenge to the direction given in Clause-(V) of Para-54 of the impugned judgment. However, the Special Leave Petitions were disposed of with certain observations which are quoted hereunder:

"As regards the conclusion reached by the High Court, the amended provision can be given prospective effect only, that needs no further consideration as we agree with the said view. The direction given in clause (v) is founded on the stated conclusion reached by the High Court.

Learned counsel for the petitioners, however, contends that without reference to the amended provision, the department can still continue with the assessment and reached at the same conclusion on the basis of unamended rules. No such argument was canvassed before the High Court. In any case, if there is any provision enabling the department to complete the assessment on the basis of unamended rules, the department is free to do so. That can be questioned by the concerned assessee before the appropriate Forum. We are not expressing any view one way or the other about the correctness of the stand taken by the State. All contentions available to both sides in that regard are left open. It was pointed out to us that the State is under statutory obligation to conclude the assessment process for the period prior to 01.07.2017 on the basis of unamended rules; and commence the assessment for the subsequent period as per the new regime which has come into force from 01.07.2017.

As aforesaid, the department is free to proceed with the assessment on the basis of unamended rules which, however, will be subject to challenge as may be available in law to the assessees before the appropriate Forum.

The special leave petitions are disposed of accordingly. Pending applications, if any, stand disposed of."

4. Learned counsel for the parties therefore submit that the issue is no longer res-integra, writ petitions may be disposed of on the same lines.

5. Accordingly, writ petitions are disposed of in the same lines as rendered in W.P (T) No. 134/2016 and analogous cases, operative part whereof has been quoted hereinabove.

(Aparesh Kumar Singh, A.C.J)

(Deepak Roshan, J) Ranjeet/