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

Held

The Court held that the issue in the present 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. While Rule 35(2) of the JVAT Rules, 2006, stipulates this condition, it is inconsistent with Section 18(6) and therefore held to be directory, not mandatory. The Court directed the respondent-State to re-examine the petitioner's claim for ITC amounting to Rs. 1,53,54,395.74, for which JVAT-404 Forms were not submitted. This re-examination is to be done by verifying the claim from original tax invoices containing particulars of sale evidencing the amount of input tax paid. If satisfied that the petitioner had paid the input tax, the benefit of ITC is to be extended. Consequently, the assessment order and demand notice were set aside, and the Assessing Authority was directed to give effect to the Court's order within eight weeks.

Facts

The petitioner, M/s Simplex Infrastructures Limited, challenged an assessment order dated March 17, 2016, and a demand notice dated March 19, 2016, passed by the Deputy Commissioner of Commercial Taxes, Ranchi. The petitioner had claimed Input Tax Credit (ITC) of Rs. 5,66,64,654.16. The assessing officer allowed ITC of Rs. 4,13,10,258.42 but denied the balance of Rs. 1,53,54,395.74 on the grounds that the petitioner failed to submit JVAT Form 404 for this amount. The petitioner argued that it possessed original tax invoices for these purchases and that Section 18(6) of the Jharkhand Value Added Tax (JVAT) Act, 2005, allowed ITC claims based on original tax invoices, not mandating JVAT Form 404. The respondent-State contended that the petitioner had not availed the alternative remedy of a revision application before the Tribunal, unlike in a cited precedent.

Key Issues

1. Whether Rule 35(2) of the JVAT Rules, 2006, which requires the production of JVAT Form 404 for claiming Input Tax Credit (ITC), is mandatory or directory, in light of Section 18(6) of the JVAT Act, 2005, which permits ITC claims based on original tax invoices. The petitioner argued that Section 18(6) of the JVAT Act, 2005, does not mandate the production of JVAT Form 404 for ITC claims, only requiring original tax invoices evidencing tax payment. They contended that Rule 35(2) of the JVAT Rules, 2006, imposing the JVAT 404 requirement, is inconsistent with the Act and should be treated as directory. The petitioner relied on the case of Brahmaputra Metallics Limited. The respondent-State argued that the facts of the instant case are different from Brahmaputra Metallics Limited, specifically noting that the petitioner had not availed the alternative remedy of revision before the Tribunal, whereas the petitioner in the cited case had exhausted all remedies before approaching the High Court.