TaxTMI 
TaxTMI 
2023 (10) TMI 724
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....and denial of the same to it is contrary to amended provisions of Section 18(8)(ix) of the Jharkhand Value Added Tax Act, 2005 (for short 'JVAT Act')"? 3. For the sake of ready reference, facts of individual cases are enumerated hereunder in short:- (i) W.P.(T) No. 786 of 2013 pertains to the period 2010-11 in respect of Unit-II of the Petitioner-company. The Petitioner is primarily engaged in manufacturing and selling of Auto Parts and Leaf Spring assembly. Petitioner has two Units/Plants being Unit No. I and Unit No. II bearing TIN No. 20310900926 and TIN No. 2044 0905643 respectively and both the Units are situated at Adityapur Industrial Area, Jamshedpur. It is the case of the Petitioner that during normal course of its business, Petitioner makes Intrastate stock transfer of goods from its Unit-II to Unit-I and vice versa. An inspection was conducted in the premises of the Petitioner by a team of officials of Commercial Taxes Department and for the Period 2010-11 it was alleged that the Petitioner claimed Input Tax Credit (for short 'ITC') for Rs. 52,28,783.68 on Intrastate stock transfer of its goods and it was contended in the Inspection Report that ITC on the goo....
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....2008 passed in W.P.(T) No. 6285 of 2007. Petitioner, being aggrieved by the Assessment Order, preferred an appeal before Joint Commissioner of Commercial Taxes (Appeals), Jamshedpur Division, Jamshedpur, which was registered as AP- VAT-A-93/2004-05. However, the Appellate Court, vide order dated 30.01.2016, by relying upon un-amended provisions of Section 18(8)(ix) of the JVAT Act, upheld the Assessment Order. Petitioner, thereafter, preferred statutory revision before Commercial Taxes Tribunal, Jharkhand, Ranchi against the Appellate Order, which was registered as Revision Case No. JR-74 of 2016. However, the revisional court, vide its order dated 10.08.2021, was pleased to dismiss the revision petition of the Petitioner and held that Petitioner is not entitled to claim ITC on the goods which were stock transferred by it within the State. (v) W.P.(T) No. 4509 of 2021 also pertains to Unit-I of the Petitioner- company for the period 2010-11, wherein Petitioner claimed total ITC of Rs. 57,07,648.79. The Assessing Officer, while relying upon the decision of this Court in the case of Tata Steel Ltd. (supra) held that since Petitioner made Intrastate stock transfer of approxim....
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....and, like the Petitioner's Units, for example, Tata Steel Ltd., Tata Motors Ltd., Tata Cummins, Tinplate India Ltd., etc. which were engaged in manufacture of goods, filed representations before the State Government pleading hardships due to denial of the benefit of ITC in respect of the goods consumed for manufacture of goods for Intrastate stock transfer of goods for sale. It is the case of the Petitioner that there are several manufacturing Units situated within the State of Jharkhand and it is not possible for the said Units to sell its product in the market from its Industrial Unit itself and they are required to establish Branches, Stock-yards and Dealers across the State from where the goods are sold. In order to sell the goods, through their Branches/Stockyards, the companies, like Petitioner, have to transfer the goods by way of Intrastate stock transfer which are intended for sale. However, in view of un-amended provision of Section 18(8)(ix), proportionate ITC on the goods used for manufacture of goods, which were Intrastate stock transferred for sale, was being denied. It was pursuant to the said representations being made by various Units situated within the State o....
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....lable. By placing reliance upon the decisions of the Hon'ble Apex Court in the case of JCIT Vs. Saheli Leasing and Industries Ltd., (20010) 6 CC 384, it has been submitted that the doctrine of "aspect legislation" must be kept in mind while interpreting the provisions of Section 18(8)(ix) of the JVAT Act. 9. Further reliance has been made to the decision of Hon'ble Apex Court in the case of 'Ald Automotives Ltd. vs. The Commercial Tax Officer, reported in (2019) 13 SCC 255' and in the case of 'TVS Motor Company Ltd. vs. The state of Tamil Nadu, reported in (2019) 13 SCC 403', to contend that benefit of ITC is in the nature of 'benefit/concession' and is not a vested right and/or indefeasible right. It was vehemently argued that benefit of ITC conferred under the Act is subject to certain contingencies and condition prescribed in the statutory Scheme and unless an assessee fulfills said contingencies and/or satisfies the conditions, benefit of ITC cannot be extended to the said assessee. 10. On the strength of the above, it was contended that benefit of ITC has been rightly denied to the respective Petitioners. 11. Having heard learned counsel for the parties and after goin....
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....s Input Tax, for the purpose of resellers, when reselling medicines or drugs, specified in the Drugs (Prices Control) Order 1995. (IV) Section-16 Input Tax - Input tax in relation to a registered dealer means the tax charged under this Act by the selling dealer to such dealer on the sale to him of any goods for resale or for use in manufacturing or processing of goods for sale or for directly use in mining or use as containers or packing materials or for the execution of works contract. It shall also include the tax paid on entry of goods as mentioned in schedule III by a registered dealer. (V) Section-17 Tax Payable - (1) The tax payable by a registered dealer for any tax period shall be the difference between the output tax payable plus purchase tax, if any, and the input tax paid, which can be determined, from the following formula: Tax payable = (O+P)-I Where 'O' denotes the output tax payable for any tax period as determined under Section 15, 'P' denotes the purchase tax paid by a registered dealer for any tax period as determined under Section 10 and 'I' denotes the input tax paid or payable and includes tax paid on Entry of Goods, for the ....
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....payment of tax paid on entry of goods, in original, the prescribed authority may allow, such input tax credit as prescribed. (VIII) Rule-35(2) of Jharkhand Value Added Tax Rules, 2006:- 35. Evidence in support of claims in respect of goods leviable to Output Tax at the First Point of Sale within the State of Jharkhand (2) Any VAT dealer, who claims Input Tax Credit under sub-section (4) of Section 18 of the Act and his Output Tax payable requires the Input Tax Credit, for the sales made at the stage(s) under sub-section (1) of Section 9 of the Act, shall substantiate for such claim before the authority prescribed, by producing a true Declaration in writing, issued by the preceding VAT selling dealer, in Form JVAT 404 evidencing that the goods in question have already been subjected to Tax at the preceding stage of their sale in the State of Jharkhand." 13. By bare perusal of the aforesaid provisions of the JVAT Act, 2005 it would transpire that said provisions are in consonance with the scheme of Value Added Tax Regime introduced in the Country. From the scheme of JVAT, 2005 it would be evident that output tax liability of a dealer was required to be determined....
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.... used in the manufacture of the finished Goods." Amended Section 18(8)(ix) of the JVAT Act. "18(8) No input tax credit under sub-section (i) shall be claimed or be allowed to a registered dealer- (i) ....... (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% on such materials used in the manufacture of the finished Products." 18. A bare perusal of the un-amended provision would reveal that if the goods manufactured for stock transfer, whether Intrastate or Interstate, ITC could not be availed subject to exceptions carved out in the proviso. The proviso enables availment of ITC in respect of tax paid in excess of 4% on such materials used in the manufacture of goods which were stock transferred, either within or outside the State. Thus, even prior to amendment carried out under Section 18(8)(ix), proportionate ITC in excess of 4% of the tax paid on input goods was available. Therefore, when the input tax paid was over and above 4% paid....
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....r manufacture of goods, which is intended for sale. If the reasoning given by the Tribunal is accepted, then a manufacturer would get ITC on input if the goods are manufactured by it and sold by it itself. Whereas, the manufacturer would not be entitled to ITC if the goods are manufactured but not sold by manufacturer itself and stock transferred to its branch/stockyard/other units etc. up to the stage when the final product is sold. This is clearly not the intent of the Scheme of JVAT Act and the manufacturer is not required to wait for availment of ITC to a stage of ultimate sale of goods but it is entitled for ITC if the goods are merely 'intended for sale'. Almost identical issue came up for consideration before the Hon'ble Apex Court by interpreting almost pari materia provisions contained under Section 8(3)(b) of the Central Sales Tax Act, 1956 in the case of Assessing Authority cum Excise and Taxation Officer, Gurugram and Anr. Vs. East Indian Cotton Manufacturing Company Ltd., Faridabad, reported in (1981) 3 SCC 531. In the said Judgment, Hon'ble Apex Court in categorical term has held that the words 'for sale' following the word 'goods' in Section 8(3)(b) of the Central....
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....arly indicate that the goods manufactured or processed by the registered dealer must be goods for sale or in other words, they must be goods intended for sale and it is immaterial whether they are intended for sale by the registered dealer himself or by anyone else. This sub-clause of Section 8(3)(b) would therefore clearly cover a case where a registered dealer manufactures or processes goods for a third party on a job contract and uses in the manufacture or processing of such goods, materials purchased by him against his Certificate of Registration and the declarations in Form C, so long as the manufactured or processed goods are intended for sale by such third party. It is of course, true that if proceedings are taken against the registered dealer under Section 10, clause (d) or Section 10-A, the question would arise whether the goods manufactured or processed by the registered dealer for a third party were intended for sale by such third party and that would have to be decided by the Court or the competent authority according to the appropriate and relevant rules of evidence, but merely because some difficulty may arise in the determination of this question by reason of the thi....
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....ble Apex Court in Civil Appeal No. 7398 of 2008. Recently, Hon'ble Apex Court, vide its Judgment and order dated 24th Feb. 2022, set aside the Judgment of this Court by holding as under:- "In view of the aforesaid, we allow the present appeal and set aside the impugned order interpreting Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005, as it existed before the Jharkhand Value Added Tax (Amendment) Ordinance, 2011, with an order of remand to the High Court for a fresh decision. The respondent will be entitled to file an amended/additional counter affidavit relying on the amended clause. Equally, it will be open to the appellant to file proceedings challenging the ordinance and the notification. It is clarified that we have not expressed any opinion on interpretation of Clause (ix) to subsection (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005, pre and post the amendment or validity of the notification granting retrospective effect to the amendment." 24. In view of the aforesaid facts, the very foundation, on the basis of which, claim of ITC of the Petitioner was denied i.e., the Judgment of Tata Steel Ltd. (supra) as we....