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TMI Blog2022 (1) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... consumer is not overburdened by paying double taxes and therefore VAT law was brought into force. When intra-state transfer of sock is made practically there is no sale and such goods may be used as raw material or consumed as raw 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. 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 has already ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 ₹ 57,07,648.99 but the assessing officer held that stock transfer of goods made by way of Intra-State stock transfer for ₹ 12,08,779.281= which was approximately 14.88 % of the total turnover which was not eligible for ITC particularly relying on the Judgment passed by the Hon'ble Jharkhand High Court in W.P.T No. 6285 of 2007 in the matter of M/s Tata Steel Limited vs the State of Jharkhand order dated 24.04.2008 and thus did not allow proportionate ITC to the tune of 14.88 % out of total claim allowed of ₹ 57,07,648.99. Same order was upheld by the appellate Court placing reliance on the judgment of the Hon'ble Jharkhand High Court in W.P.T No. 6285 of 2007 order dated 24.04.2008. The Respondent no. 2 while rejecting the claim of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 JVAT Act, 2005 reads as hereunder:- (ix) in respect of goods consumed for manufacture of goods for Inter-State transfer of stock or for sale outside the State 5. Learned Counsel submits that earlier the expression was goods used as raw materials the amended provision uses the expression goods consumed for manufacturing Further earlier there was no mention of inter-state transfer of stock which has been incorporated by 2011 amendment w.e.f. 01.04.2006.Thus Section 18 (8) (ix) of the JVAT Act, 2005 which is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. 6. On the other hand, Learned Advocate Sri Pradip Modi, appearing on behalf of the State submits that no error of law or fact has been committed by the Assessing officer or the Appellate Forum in refusing ITC on stock transfer of goods which were intra-state. Learned Counsel submits that much emphasis has been made on the amendment incorporated in Section 18 (8) (ix) of the JVAT Act, 2005.0n a scrutiny of the said amendment, it would transpire that no significant amendment was incorporated in the Act. Earlier the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 credit is given on use of raw materials for direct use in manufacturing or processing of goods for sale or for direct use in mining or for use as capital goods ... intended for sale in the State of Jharkhand or in course of inter-state trade and commerce. A composite reading of Section 18 (4) (iii) read with Section 18 (8) (ix) would clarify the position of law that this input tax credit could have been availed if sufficient documents was filed that the goods which was stock transferred from unit II to unit-I was intended for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Petitioner is represented by Sri Rajesh Mittal, Advocate and in the memorandum of Revision of the said case at paragraph 4 while stating the facts of the case it is stated that the case relates to Unit-I of the Petitioner Company and the TIN number as appearing in the order impugned is 20310900926 i.e., the same TIN number is there for Unit I as well, as it appears from the Revision application. 12 . Within these factual parameters, the issues raised and stated above is required to be considered by this Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 has already availed the same through its unit-11 which would be undoing the mandate of law in terms of Section 18 (8) (ix) of the JVAT Act, 2005. To the considered view of this Tribunal, such allowing of claim of ITC on intra-state transfer of stock would defeat the legislative purpose in protecting the interest of State in recovering taxes. Further, there is nothing on record to show that subsequent to intra-state transfer of stock the goods were to be consumed for manufacturing purposes and/or were sold within th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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