Ms Simplex Infrastructures LTD Through Its Vice President Sri S B Das vs. Finance

Held

The Court held that the issue raised in the instant writ application is squarely covered by the decision in Brahmaputra Metallics Limited (supra). The Court reiterated the finding from Brahmaputra Metallics Limited that Section 18(6) of the JVAT Act, 2005, does not contemplate the production of JVAT-404 Forms as a mandatory condition for availing ITC, and that Rule 35(2) of the JVAT Rules, 2006, to the extent it prescribes this condition, is inconsistent with the Act and therefore directory, not mandatory. The Court directed the respondent-State to re-examine the petitioner's claim of ITC amounting to Rs. 4,40,79,456.86, for which JVAT-404 Forms were not submitted. This re-examination is to be done by verifying the claim from original tax invoices showing particulars of sale and evidencing the amount of input tax paid. If satisfied that the petitioner had paid input tax, the benefit of ITC is to be extended. The assessment order dated 31.03.2015, the demand notice dated 31.03.2015, and the revision order dated 25.10.2016 were set aside.

Facts

The petitioner, M/s Simplex Infrastructures Limited, challenged an assessment order dated 31.03.2015 and a demand notice dated 31.03.2015, as well as a revision order dated 25.10.2016 passed by the Commissioner of Commercial Taxes, Jharkhand. The petitioner claimed Input Tax Credit (ITC) of Rs. 13,13,18,734.38. The assessing officer allowed ITC of Rs. 8,72,39,277.52, denying the balance of Rs. 4,40,79,456.86 on the grounds that JVAT Form 404 was not submitted for this amount. The petitioner contended that it possessed original tax invoices for these purchases and that Section 18(6) of the Jharkhand Value Added Tax (JVAT) Act, 2005, only required production of original tax invoices, not JVAT Form 404.

Key Issues

1. Whether the petitioner is entitled to claim Input Tax Credit (ITC) solely on the basis of original tax invoices, in view of Section 18(6) of the JVAT Act, 2005, read with Section 18(8) of the said Act, despite non-submission of JVAT Form 404? The petitioner argued that Section 18(6) of the JVAT Act, 2005, mandates consideration of ITC claims based on original tax invoices showing tax payment, and that the requirement of JVAT Form 404 under Rule 35(2) of the JVAT Rules, 2006, is directory, not mandatory, as it is inconsistent with the Act. The petitioner relied on the decision in Brahmaputra Metallics Limited vs. The State of Jharkhand. The respondent-State contended that while the issue of Form 404 was decided in Brahmaputra Metallics Limited, the facts of that case were different, particularly regarding the petitioner having availed alternative remedies. The State argued that the petitioner had not availed the alternative remedy of revision before the Tribunal in the instant case.