Input tax credit on intrastate stock transfer confirmed after retrospective amendment removed the earlier statutory bar.

Retrospective amendment to the Jharkhand VAT input tax credit provision removed the earlier bar on credit for intrastate stock transfers, and a manufacturer using locally purchased goods as raw materials for goods intended for sale remained entitled to full credit. Denial of credit based on the unamended provision and the earlier Tata Steel decision could not stand once that decision had been set aside and the statutory embargo ceased to operate. The Act did not require the assessee to defer credit until final sale by the same unit where the goods were otherwise purchased from registered dealers and used in manufacturing for sale.

---

---

Issues: Whether the petitioner was entitled to full input tax credit on intrastate stock transfer of goods under the amended Section 18(8)(ix) of the Jharkhand Value Added Tax Act, 2005, and whether denial of such credit by relying on the unamended provision and the earlier decision in Tata Steel Ltd. was valid.

Analysis: The petitioner satisfied the statutory conditions for input tax credit under the Act, as the goods were purchased within the State from registered dealers and were used as raw materials in manufacturing goods intended for sale. The earlier embargo in the unamended Section 18(8)(ix), which denied credit on stock transfer, was relaxed by the amendment with retrospective effect so far as intrastate stock transfer was concerned. The earlier judgment relied upon by the assessing authorities had already been set aside, and the basis for denial of credit therefore ceased to survive. The scheme of the Act did not require a manufacturer to wait until final sale by the same unit before claiming credit where the goods were otherwise intended for sale.

Conclusion: The petitioner was entitled to claim full input tax credit on intrastate stock transfer of goods, and the denial of such credit in the impugned orders was and unsustainable.

---