TaxTMI 
TaxTMI 
2022 (1) TMI 861
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....ying Input Tax Credit on intra-state stock transfer made by the petitioner. It is stated that the Assessing Officer refused the claim of Input Tax Credit to the extent of stock transfer within the state of Jharkhand i.e. Intra-state Stock transfer from Unit-II to Unit-I of the Petitioner Company which was upheld by the Appellate Court and hence this Revision Application. 2. Short facts of the case is as hereunder:- The Petitioner is a company registered under the Indian Companies Act, 1956 and also registered under the Jharkhand Value Added Tax Act, 2005 (in short 'JVAT' Act) engaged in the business of manufacturing and selling of auto parts primarily engaged in the manufacturing of Leaf Spring assembly and has two units, Unit-I & Unit-II both situated at Adityapur having its TIN No. 20310900926.The present dispute relates to the assessment year 2010-11 of Unit-II. It is stated that the petitioner had claimed ITC for Rs. 57,07,648.99 but the assessing officer held that stock transfer of goods made by way of Intra-State stock transfer for Rs. 12,08,779.281= which was approximately 14.88 % of the total turnover which was not eligible for ITC particularly relying on the ....
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....adodia, appearing on behalf of the Petitioner submits that the factual aspect of the case is not in dispute. The fact that there was intra-state stock transfer from Unit-II to Unit-I is also not disputed. The only question and point for determination is whether the petitioner is entitled for ITC on intra-state stock transfer made from Unit-II to Unit-I or not. It has been very emphatically argued by the learned Counsel that the amendment incorporated in Section 18 (8) (ix) of the JVAT Act, 2005 has not been considered either by the Appellate Court or by the assessing officer. The un-amended provision as it existed prior to the amendment of Section 18 (8) (ix) of the JVAT Act, 2005 has been quoted and also the amended provision has been quoted which is also available in the Revision Application and also in the written notes of argument given by the Petitioner. 4. It is stated that if it is closely looked into the un-amended provision reads as hereunder:- "(ix) in respect of goods used as raw materials in manufacturing of goods for transfer of stock or other than by way of sale or for sale outside the State of Jharkhand" The amended Section 18 (8) (ix) of the JVA....
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....d has observed that the denial of ITC on stock transfer is not in accordance with law and has remitted back the matter to the assessing officer for passing fresh order, copy of the order passed by the learned Commissioner of Commercial Taxes is annexed along with the written notes of argument. Further, the revised assessment order passed by the Assessing officer is also annexed wherein the said company was allowed ITC on goods used for manufacture of finished products on intra-state stock transfer. In another case also similar order has been passed copy of which has been annexed. Further, Judgment passed by the Hon'ble Jharkhand High Court in Brahmaputra Metallics limited Vs State of Jharkhand has also been referred wherein the Hon'ble High Court has set aside the judgment passed by this Tribunal wherein a finding was given by this Tribunal that the ITC was available only in respect to such goods which generated output tax. Thus, Learned Counsel submits that the order impugned is fit to be set aside and the Revision Application is fit to be allowed and the Petitioner may be given the benefits of full claim of ITC on goods which was stock transferred from Unit II to Unit I. ....
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.... of the JVAT Act, 2005 is the governing provision which very categorically says that input tax credit is to be allowed at the time when output tax credit is generated and referring to this provision of law learned counsel submits that the statutory mandate is input tax credit as determined under this Section shall be allowed to such registered dealer for the tax paid or payable in respect of all taxable sales other than any other sales as may be prescribed, or purchases under Section 10 during that period. So, there should be a taxable sale for taking the benefit of input tax credit and apparently intra-state stock transfer is not a taxable sale. Further, learned Counsel submits that Section 18 covers cases were a person is entitled to input tax credit and section 18 (8) is a negative list wherein certain negative provisions has been drafted to exempt such claim of input tax credit for those who are falling under any of the provisos of Section 18.While replying to the argument advanced on behalf of the petitioner that the case of the Petitioner was covered u/s 18 (4) (iii), learned Counsel submits that if the provision of law is looked into it clearly specifies that input tax credi....
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....t question for determination before this Revisional Court i.e., the present Tribunal is whether the petitioner would be entitled to input tax credit on stock transfer made by Unit-II to Unit-I which is stated to be intra-state stock transfer and with the above question is an incidental question which relates to the effect of amendment incorporated in the year 2011 in Section 18 (8) (ix) of the JVAT Act, 2005 which now clearly mentions inter-state stock transfer. 11. Certain facts are not in dispute. The fact that that the stock transfer of goods was made from Unit-II to Unit-I is not disputed. From the perusal of the record, it also transpires that the TIN Number of the applicant is stated to be 20310900926 though in the Memo of Revision Application there is a mention of a wrong TIN number but the order impugned and also in the written notes of argument petitioner stated that there is a typographical error in recording the TIN number and the correct TIN number has also been stated in the said synopsis of argument provided by the Petitioner. Today one another matter of the present Petitioner is also fixed for order which is registered as Revision Case no. JR 74 of 2016 wherein Pe....
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....aw material in course of manufacturing of final product but only at the time of sale of the final product the taxes paid on such goods can be claimed as input tax credit. An exception was carved out in terms of Section 18 (8) (ix) of the JVAT Act, 2005 where inter-state stock transfer was held to be ineligible for input tax credit subject to the proviso that if tax is paid in excess of 4% such ITC can be claimed. A Composite reading of the proviso to Section 18 (8)(ix) of the JVAT Act, 2005 clearly shows that where stock transfer of goods are made from the State of Jharkhand to any other state then in terms of the proviso the interest of state of Jharkhand is protected and the consumer is not overloaded with excessive tax and therefore, proportionate input tax credit is allowed on inter-sate stock transfer of goods or inter-state sale of goods. This is not applicable when there is intra-sate transfer of stock. In case of intra-state transfer of stock if input tax credit is claimed and if input tax credit is allowed then the other unit of the Petitioner will be at full liberty to subsequently make an inter-state transfer of stock with no requirement to claim input tax credit as he h....