TaxTMI 
TaxTMI 
2025 (10) TMI 870
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.... appeals also raise identical issues, they are being heard analogously and are disposed of by this common judgment. 3. The present intra-Court appeals have been preferred against the common order dated 31.07.2025 passed by the learned Single Judge in Writ Petition (T) Nos. 14/2021, 15/2021, 16/2021, 17/2021 and 18/2021 (Bharat Aluminium Company Limited v. State of Chhattisgarh and others), whereby the writ petitions preferred by the appellants/writ petitioners came to be dismissed. The said writ petitions, having arisen out of identical facts and involving common questions of law, were decided together by the learned Single Judge by a common order. Being aggrieved by the said dismissal, the appellants have preferred the present writ appeals seeking interference with the impugned order. 4. Brief facts of the cases projected before the learned Single Judge, in nutshell, were that the appellant/writ petitioner - Bharat Aluminium Company Limited was engaged in the manufacture, sale and export of aluminium products and had its factory premises situated at Korba, Chhattisgarh. For carrying out its industrial operations, the appellant/writ petitioner had established two captive powe....
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....dated 17.09.2020 (Annexure P-8), affirmed the order of the Assistant Commissioner. The appellate authority held that (a) supply of electricity to the township was not intrinsically connected with the business activity of the appellant/writ petitioner, (b) sale of Duty Credit Scrips (DCS) was an exempt supply warranting reversal of ITC, and (c) an amount of Rs. 40,14,605/- was recoverable from the appellant/writ petitioner. 9. Questioning the aforesaid appellate order, the appellant/writ petitioner had preferred writ petitions being Writ Petition (T) Nos. 14/2021, 15/2021, 16/2021, 17/2021 and 18/2021 contending, inter alia, that maintenance of the township and supply of electricity thereto were activities "in the course or furtherance of business" within the meaning of Section 2(17) read with Section 16(1) of the CGST Act, and therefore, eligible for Input Tax Credit. 10. The appellant/writ petitioner had further placed reliance upon the insertion of Explanation 1(d) to Rule 43 of the Central Goods and Services Tax Rules, 2017, vide Notification No. 14/2022 - Central Tax dated 05.07.2022, contending that the same had retrospective applicability and ....
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....xplanation added in the present case merely expands the scope of exempt supplies and is therefore not clarificatory. It further held that since Section 164(3) of the CGST Act was not invoked, the amendment cannot be said to be retrospective, particularly as ITC provisions are a concession under the statute. 14. It is submitted by Mr. Raichandani that the learned Single Judge frames the issue as whether maintenance of the township is in the course or furtherance of business under Section 2(17) read with Section 16(1) of the CGST Act. However, the conclusion reached pertains to denial of Input Tax Credit (ITC) for electricity supplied to the township, without recording any observation on whether maintenance of the township constitutes a business activity. There is no discussion on the core statutory provisions and the issue as framed. Several judicial precedents have been relied upon to establish that maintenance of township is an integral part of business operations. While the impugned order mentions these cases, it fails to discuss their applicability or distinguish them from the facts of the present case. This cursory treatment renders the order arbitrary and non-speaking. The ....
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....liable to be quashed and set aside, and the matter may be remitted to the appropriate authority or considered afresh in accordance with law. 17. On the other hand, Mr. Rahul Tamaskar, learned counsel for the State/respondents opposed the submissions of learned counsel for the appellant/writ petitioner and submits that the impugned common order dated 31.07.2025 is legally valid, reasoned, and does not suffer from any infirmity. The learned Single Judge has carefully considered the statutory provisions, judicial precedents, and the submissions advanced by both parties before dismissing the writ petitions. The impugned judgment is speaking, detailed, and correctly applies the law to the facts of the case. It is submitted that the issue of Input Tax Credit (ITC) is governed by Sections 2(17) and 16(1) of the CGST Act, 2017. The impugned order correctly holds that ITC is not admissible for electricity supplied to the township since such consumption is not directly in the course or furtherance of business. The High Court's reliance on the Hon'ble Supreme Court judgments in Maruti Suzuki Limited (supra) and Gujarat Narmada Fertilizers Company Limited (supra) is correct, as those cases ....
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....2021, 15/2021, 16/2021, 17/2021, and 18/2021, as well as the judicial precedents cited by the respective learned counsel for the parties. 20. After considering the submissions of learned counsel for the parties and the materials on record, the learned Single Judge framed the following two questions for the disposal of the writ petitions:- (i) Whether the maintenance of township and supply of electrical energy thereof is in the course or furtherance of business in terms of Section 2(17) read with Section 16(1) of the CGST Act entitles the petitioner for Input Tax Credit? (ii) Whether the Input Tax Credit (ITC) will be available on effecting exempt supplies that is supply of DCS on or before 05.07.2022? 21. While deciding the Question No. (i), the learned Single Judge while relying upon the judgments rendered by the Hon'ble Supreme Court in Godrej & Boyce Mfg. Co. Pvt. Ltd. And others v. Commissioner of Sales Tax and others, (1992) 3 SCC 624, State of Karnataka v. M.K. Agro Tech. Private Limited, (2017) 16 SCC 210, Jayam & Co. v. Commr., (2016) 15 SCC 125, Maruti Suzuki Limited (supra) and Gujarat Narmada Fertilizers Company Limited (supra) has held as under :....
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.... of production for manufacture of final products or for any other purpose. The important point to be noted is that, in the present case, excess electricity has been cleared by the assessee at the agreed rate from time to time in favour of its joint ventures, vendors, etc. for a price and has also cleared such electricity in favour of the grid for distribution. To that extent, in our view, the assessee was not entitled to CENVAT credit. 46. In short, the assessee is entitled to credit on the eligible inputs utilised in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to Cenvat credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors, etc., which is sold at a price." 26. In Maruti Suzuki Limited (supra), their Lordships have clearly held that the assessee would be entitled to credit on the eligible inputs utilised in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption) and they would not be entitled to CENVAT ....
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....he Single Judge has correctly noted that ITC is a concessional benefit and is available only in accordance with the scheme of the statute. The electricity consumed for township purposes is neither used within the factory for manufacturing nor for captive consumption related to production of goods; it is supplied externally for residential consumption. The Supreme Court in Maruti Suzuki Limited (supra) and Gujarat Narmada Fertilizers Company Limited (supra) has clearly held that ITC is not admissible for electricity wheeled out or supplied externally, even if the excess electricity is used by related parties or for ancillary purposes. 24. The appellant's/writ petitioner's reliance on decisions such as Commissioner of Customs & Central Excise, Hyderabad-III v. ITC Limited, 2013 (32) STR 288 (AP), Commissioner of Central Excise, Nagpur v. Ultratech Cement Ltd., 2010 (260) ELT 369 (Bom.), Cinemax India Limited v. Union of India, 2011 (24) STR 3 (Guj.), and S.A. Builders Ltd. v. Commissioner of Income Tax (Appeals) Chandigarh and another, (2007) 1 SCC 781 is misplaced, as the facts and scope of ITC in those cases differ from the present case, particularly regarding the nature of supp....
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....nd question is also answered against the petitioner and in favour of the State/ respondents. 41. The judgment relied upon by the petitioner in Ascent Meditech Ltd. (supra) delivered by the High Court of Gujarat is completely distinguishable as in that case amendment to Rule 89(5) of the Central/Gujarat Goods and Services Tax Rules, 2017 was brought after direction of the Supreme Court in the matter of Union of India and others v. VKC Footsteps India Private Limited, (2022) 2 SCC 603 wherein after noticing the anomalies in the formula it was specifically directed by their Lordships of the Supreme Court to remove the anomalies and to take decision in accordance with law. Similarly, the decision relied upon in Mysore Rolling Mills (P) Ltd. (supra) and other decisions, are clearly not applicable to the facts of the present case and are distinguishable. 42. In that view of the matter, the benefit of amendment in shape of Explanation 1(d) to Rule 43 of the CGST Rules would be available for the period after 5-7-2022 and no case for interference in the order impugned passed by the Joint Commissioner (Appeals) deciding both the issues against the petitioner, would be made ....