2016 (12) TMI 958 - HC - VAT and Sales Tax

Carry forward of Input Tax Credit - Held that - originally because of Explanation (1) to section 19 of the Act,2005, this petitioner was not permitted to carry forward Input Tax Credit from the month of January, 2015 to February, 2015. By now, an amendment has been carried out in Explanation (1) to Section 19 of the Act, 2005 by Amendment Notification dated 4th November, 2016, which is made effective from 7th May, 2011. Hence, we, hereby direct the respondents to allow this petitioner to carry forward Input Tax Credit for the month of January, 2015 to February, 2015 and for subsequent months, as per the amended version of Explanation (1) to Section 19 of the Jharkhand Value Added Tax Act, 2005 and the assessment will be carried out of this petitioner by the Assessing Officer, in accordance with law - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Interpretation of Explanation (1) to Section 19 of the Jharkhand Value Added Tax Act, 2005.
2. Allowance of Input Tax Credit for the months of January 2015 to February 2015.
3. Assessment of the petitioner in accordance with law.

Analysis:

1. The writ petition was filed due to the insertion of Explanation (1) to Section 19 of the Jharkhand Value Added Tax Act, 2005 by the State of Jharkhand. The original Explanation (1) restricted the petitioner from carrying forward Input Tax Credit for the months of January 2015 to February 2015. However, an amendment was made to this Explanation through a Government Notification dated 4th November 2016, effective from 7th May 2011. The court noted this amendment and directed that the Input Tax Credit be allowed to be carried forward as per the amended version of Explanation (1) to Section 19 of the Act. The assessment of the petitioner was also to be conducted by the Assessing Officer in compliance with the law.

2. After hearing both parties, the court acknowledged that due to the original Explanation (1) to Section 19 of the Act, the petitioner was initially unable to carry forward Input Tax Credit for the specified months. The subsequent amendment to Explanation (1) by the Notification dated 4th November 2016 rectified this issue, allowing the petitioner to now carry forward the Input Tax Credit for January 2015 to February 2015 and the following months. The court directed the respondents to permit the petitioner to avail of this credit and instructed that the assessment of the petitioner be conducted by the Assessing Officer in adherence to legal provisions.

3. The judgment concluded by disposing of the writ petition with the aforementioned directions and observations. The court's decision focused on the amendment to Explanation (1) to Section 19 of the Jharkhand Value Added Tax Act, 2005, ensuring that the petitioner could carry forward Input Tax Credit and undergo assessment in accordance with the law.