M/S Indus Tower LTD Through Its Authorised Signatory Shri Nikhil Kumar vs. The State Of Jharkhand Through Its Secretary Department Of State Tax

Held

The Court allowed the writ petition and set aside the impugned order dated April 29, 2024, passed by the 3rd respondent. The matter was remitted back to the 3rd respondent for fresh consideration in light of the Supreme Court's decision in M/s. Bharti Airtel Ltd. vs. The Commissioner of Central Excise, Pune and the Delhi High Court's decision in Indus Towers Limited vs. Union of India & Ors. The Court reasoned that the adjudicating authority had passed the order without the benefit of these subsequent judgments, which clarified that mobile towers are not immovable properties and input tax credit should not be denied. The 3rd respondent is directed to reconsider the issue after hearing both parties and pass a fresh order within three months from the date of receipt of a copy of this order. The ratio decidendi is that where a tax authority passes an order without considering binding judicial precedents that were not available at the time of adjudication, the matter should be remitted for reconsideration.

Facts

The petitioner, M/s Indus Tower Limited, assailed an adjudication order dated April 29, 2024, issued by the Deputy Commissioner of State Tax (3rd respondent) under Section 73 of the CGST Act, 2017, read with the Jharkhand GST Act, 2017, for the financial year 2018-2019. The impugned order denied the petitioner the benefit of input tax credit. The petitioner argued that this denial was contrary to Supreme Court and Delhi High Court judgments concerning mobile towers not being immovable property and thus eligible for input tax credit. The petitioner requested the matter be remitted for reconsideration in light of these judgments, as the adjudicating authority did not have the benefit of these decisions when passing the original order.

Key Issues

1. Whether the denial of input tax credit for mobile towers, which are considered "goods" and "inputs" for telecommunication services and not "immovable property" under Section 17(5)(d) of the CGST Act, is legally sustainable? Petitioner's Contention: The petitioner argued that the impugned order denying input tax credit was contrary to the Supreme Court's decision in M/s. Bharti Airtel Ltd. vs. The Commissioner of Central Excise, Pune and the Delhi High Court's decision in Indus Towers Limited vs. Union of India & Ors. These judgments held that mobile towers are not immovable properties, can be treated as "goods" and "inputs" for output services, and therefore, input tax credit cannot be denied under Section 17(5)(d) of the CGST Act. The petitioner further contended that the adjudicating authority passed the order without the benefit of these pronouncements and sought a remand for reconsideration. Respondents' Contention: The respondents (State) stated they had no objection to the impugned order being set aside and the matter being remitted back to the 3rd respondent for fresh consideration in light of the aforementioned judgments.