Jamshedpur Continuous Annealing And Processing Company Private LTD Thr Its Sr Manager F Anda Manoj vs. Comercial Taxes

Facts

The petitioner, Jamshedpur Continuous Annealing & Processing Company Private Limited, filed a writ petition challenging amendments to Section 18(4)(iii) of the Jharkhand Value Added Tax Act, 2005, and Rule 26(11A) of the Jharkhand Value Added Tax Rules, 2006. The petitioner sought to declare these amendments illegal, arbitrary, and ultra vires, particularly their retrospective effect. The petition also sought to quash orders dated May 9, 2017, and May 25, 2017, which forfeited the petitioner's Input Tax Credit (ITC) for the financial year 2015-16, and to direct the refund of Rs. 58,26,711.15 paid pursuant to a demand notice related to this forfeiture. The petitioner argued that the reliefs sought were already decided by a co-ordinate bench in W.P.(T) No.134 of 2016 and affirmed by the Supreme Court.

Held

The High Court held that the writ petition should be disposed of in terms of the order passed by a co-ordinate Division Bench in W.P.(T) No.134 of 2016 and other analogous cases, and also taking into consideration the observations made by the Hon'ble Supreme Court in Special Leave to Appeal (Civil) No.1982 of 2021. The Court noted that the Supreme Court had granted liberty to the department to complete the assessment on the basis of unamended rules, if any provision enabled it, stating that such assessments would be subject to challenge by the assessees before the appropriate forum. The Supreme Court had explicitly left all contentions available to both sides regarding the correctness of the State's stand open. Consequently, the writ petition was disposed of in line with the prior judicial pronouncements, while preserving the liberty granted to the respondent-State by the Supreme Court to proceed with assessments under unamended rules, subject to legal challenges. No specific finding was given on the individual issues raised by the petitioner regarding the legality of the amendments or the forfeiture of ITC, as the matter was disposed of based on prior judgments and the Supreme Court's liberty.

Key Issues

1. Whether the Proviso inserted to Clause (iii) of Sub-Section (4) of Section 18 of the Jharkhand Value Added Tax Act, 2005, by virtue of the Jharkhand Value Added Tax (Amendment) Act, 2015, and subsequent notifications, is illegal, arbitrary, discriminatory, oppressive, irrational, confiscatory, and unreasonable, violating Articles 14 and 19(1)(g) of the Constitution of India. 2. Whether Sub-rule (11A) inserted to Rule 26 of the Jharkhand Value Added Tax Rule, 2006, by notification dated February 14, 2017, is ultra vires and without jurisdiction, especially concerning its retrospective effect from April 1, 2015, and its validity post the 101st Constitutional Amendment Act, 2016. 3. Whether the amendments to Section 18(4)(iii) of the Jharkhand Value Added Tax Act, 2005, are unworkable and vague until corresponding rules were framed. 4. Whether the orders dated May 9, 2017/May 11, 2017, and May 25, 2017/May 26, 2017, forfeiting the petitioner's ITC for the financial year 2015-16, are liable to be quashed. Petitioner's Contention: The petitioner contended that the reliefs sought in the present writ petition have already been decided by a co-ordinate Division Bench of this Court in W.P.(T) No.134 of 2016 and other analogous cases, and this order has been affirmed by the Supreme Court in Special Leave to Appeal (Civil) No.1982 of 2021. Therefore, the instant petition should be disposed of in terms of the said order. Respondent's Contention: The respondent-State did not dispute the petitioner's submission regarding the prior decisions. However, they submitted that an appropriate order may be passed in view of the Supreme Court's observation, giving liberty to the department to continue with the assessment, if any, on the basis of unamended rules.