2022 (3) TMI 226 - SC - VAT and Sales Tax

Maintainability of petition - Input tax credit - juristic person - HELD THAT - The writ petition preferred by Tata Steel Ltd., which is a juristic person, could not have been dismissed as not maintainable when it had challenged the denial of input tax credit to the unit at Naomundi, in respect of the purchases made and utilised in the said unit. Interpretation of statue - Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005 - HELD THAT - The period involved in the present appeal are the financial years 2006-07 and 2007-08. These aspects have to be considered. Learned senior counsel for the appellant has stated that the appellant may consider challenging these amendments and notification, if required and necessary. 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, is set aside - appeal allowed.

Summary

Issues:
1. Locus standi of the appellant in challenging denial of input tax credit.
2. Interpretation of Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005.

Analysis:
1. The first issue addressed in the judgment pertains to the locus standi of the appellant, a registered company, challenging the denial of input tax credit. The High Court's reasoning on the appellant's locus standi was deemed unjustified. The appellant, Tata Steel Ltd., being a juristic person, had the right to challenge the denial of input tax credit for purchases made at the Naomundi unit. The High Court erred in dismissing the writ petition as not maintainable, considering the separate treatment of units for taxation purposes under the Jharkhand Value Added Tax Act, 2005.

2. The second issue examined was the interpretation of Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005. The High Court's analysis was criticized for being cryptic and lacking a thorough examination of the relevant issues and contentions. The Court acknowledged the amendment to Clause (ix) through the Jharkhand Value Added Tax (Amendment) Ordinance, 2011, with retrospective effect from April 1, 2006. The financial years 2006-07 and 2007-08 were under consideration. The appellant was given the option to challenge the amendments and notification if deemed necessary. Consequently, the appeal was allowed, the impugned order was set aside, and the case was remanded to the High Court for a fresh decision, allowing both parties to submit additional filings based on the amended clause.

In conclusion, the Supreme Court refrained from expressing any opinion on the pre and post-amendment interpretation of Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005, or the validity of the retrospective notification. Any pending applications were disposed of accordingly.