Ramkrishna Forgings Limited vs State of Jharkhand

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(Jhk) 134

IN THE HIGH COURT OF JHARKHAND AT RANCHI
H.C. Mishra, Deepak Roshan, JJ.
M/s. Ramkrishna Forgings Limited - Petitioner
Versus
The State of Jharkhand & Ors. - Respondents
W.P.(T) No. 134, 1101, 1227, 1228, I.A. No.1630, 1243, I.A. No.1631, 1318, 1965, 3948, 424, 425, 4264, 4265, 4268, 4269, 428, I.A. No.1441, 4288, 429, 4292, 4401, 4402, 577, I.A. No.1464, 6165, 6537, 6739, 7317, 7337, 7341, 7385, 7455, 7465, 7467, 7469, 7486, 755 of 2016 with I.A. Nos.1452, 1463, 267, 757, I.A. Nos.1461, 2396, 834 of 2016, I.A. Nos.1465, 2397, I.A. No.1462, 4820, of 2016 861, 2053, 2130, 2134, 2136, 2641, 2660, 2661, 2739, 2740, 2743, 2754, 2759, 2935, 2977, I.A. No.4520, 2980, I.A. No.4521, 298, 3008, I.A. No.4530, 3084, I.A. No.4564, 3085, 3086, 3087, 3089, 3093, I.A. No.4559, 3094, 3100, 3129 of 2017 , 3159, 3307, I.A. No.4861, 3310 of 2017 I.A. No.4873, 3323, 3389, 3391, 3536, 3576, I.A. No.5192, 3643, I.A. No.5276, 3659, I.A. No.5301, 3755, I.A. No.5428, 3950, 3983, 4013 of 2018, 4020 of 2018 , 4132, 4133, 4149, 4150, I.A. No.5863, 4203, 4294, 4312, 435, 436, 455, 4684, 471, 5119, 5948, 948 of 2017, 6551, 5064 of 2019
Decided On : 29-01-2020

Advocates Appeared:
For the Petitioners:Mr. Biren Poddar, Sr. Advocate Mrs. Darshana Poddar Mishra, Advocate Mr. Piyush Poddar, Advocate Mr. Manav Poddar, Advocate Ms. Rakhi Sharma, Advocate, Mr. Sumeet Gadodia, Advocate Ms. Shilpi Sandil, Advocate Mr. Ranjeet Kushwaha, Advocate, Mr. Nitin Kr. Pasari, Advocate Ms. Vishakha Gupta Mr. Sidhi Jalan, Advocate Mr. Vaibhav Vishal, Advocate, Ms. Amrita Sinha, Advocate Mr. Aditya Khandwal, Advocate
For the Respondents:Mr. Ajit Kumar, A.G. Mr. Atanu Banerjee. Sr. S.C-III Ms. Shristi Sinha, Advocate Ms. Aushi Sarangi, Advocate Ms. Ranjana Mukherjee, Advocate Ms. Richa Sanchita, G.A.-V Mr. Anmol Deepak, Advocate Mr. Diwakar Jha, AC to SC IV

Headnote:
(A) Jharkhand Value Added Tax Act,2005 - Section 18 - Challenge to amendments brought in Section 18 of JVAT Act, 2005 which lays down eligibility towards claim of Input Tax Credit - Amendment carried out under sub-section 8 of section-18 of JVAT Act is not violative of Article 14 of Constitution of India as it is based on reasonable classification and intelligible differentia - By insertion of substituted proviso for first time under JVAT Act, a provision has been inserted for forfeiture of amount of Rs.200/- which is not available for adjustment from amount of any tax , penalty or interest payable - Said amendment has effect of curtailing vested right which has accrued upon dealer and cannot be said to be merely clarificatory in nature - However, provisions which are made for first time to detriment of a dealer cannot be given retrospective effect when vested right accrued in favour of dealer is sought to be taken away - Such amendment cannot be given retrospective effect. (Paras 31, 32, 33 and 36)
(B) Jharkhand Value Added Tax Act,2005 - Section 94 - Jharkhand Value Added Tax Rules, 2006 - Rule 26 - Provision of Section 94 of JVAT Act, 2005 does not confer any power to State Government to frame any Rule with retrospective effect - State Government cannot make subordinate legislation by giving it retrospective effect unless parent statutes expressly or by necessary implications authorises it to do so. (Paras 41 and 44)

JUDGMENT :

Deepak Roshan, J.

All the aforesaid writ petitions involve a common question of law, as such, they were heard together and are being disposed of by this common judgment.

2. These batch of writ petitions have been filed by the dealers registered under the provision of the Jharkhand Value Added Tax Act, 2005 [hereinafter referred to as “JVAT Act” in short], primarily challenging the amendments brought in Section-18 of the JVAT Act, 2005 which lays down eligibility towards claim of Input Tax Credit [ hereinafter referred to as “ITC” in short]. Further challenge has been made in the writ applications to the amendment made in the Jharkhand Value Added Tax Rules, 2006 [hereinafter referred to as “JVAT Rules”] wherein amendment has been carried in Rule-26 of the said JVAT Rules,2006 with retrospective effect for giving effect to the amendment carried out under Section-18 of the JVAT Act, 2005 aforesaid.

3. The writ petitioners before this Hon’ble Court are either traders or manufacturers of goods. Since in the batch of the present writ applications the only issue for adjudication is the validity of the amendment carried out under the JVAT Act, and/or JVAT Rules, individual facts of the writ applications are not discussed as the same are not in dispute. However, for proper appreciation of the issues involved in the instant writ applications, it would be appropriate to notice the various amendments carried out under the provision of Section-18 of the JVAT Act, including the amendment carried out under Rule-26 of the JVAT Rules, which are as under:-

(i) Amendment No.1

Vide notification dated 23.09.2015 an Amendment was carried out in Clause-(ii) of sub-section-4 of Section-18 of the JVAT Act, 2005 and, Clause-(iii) of sub-section-4 of Section-18 of the JVAT Act, 2005, as under:-

Amendment in Section-18-

(b) In clause (ii) of sub-section (4), after the existing provision ‘Sale in course of inter-State trade and commerce falling under sub-section (1) of Section 8 of the Central Sales Tax Act, 1956 ( 74 of 1956)’, a proviso shall be added in the following manner:-

Provided that the Input Tax Credit on purchases when sold in course of inter State trade or commerce shall be allowed only to the extent of the Central Sales Tax payable under the Central Sales Tax Act, 1956 ( 74 of 1956).

(d) In clause (iii) of sub-section-4, a proviso shall be added in the following manner:-

The aforesaid amendments were initially given retrospective effect with effect from 01.04.2015.

(ii) Amendment No.2

In Section-18 of the JVAT Act, a new clause was inserted vide same gazette notification dated 23.09.2015 which reads as under:-

(f) In the existing sub-section (8), after the clause (xvii), a new clause (xviii), shall be added in the following manner:-

(xviii) ‘In respect of goods consumed or burnt up in course of manufacturing process and are not transferred into or existent in the finished product whether as goods or in any other form’

The said amendment was also initially given retrospective effect with effect from 01.04.2015.

(iii) Amendment No. 3

Vide notification dated 0 8.02.2016, Proviso inserte din (ii) Clause- and (iii) of sub-section (4) of Section-18 which was inserted vide notification dated 23.09.2015 was substituted in the following manner:-

Amendment in sub-section (4) of Section-18 The existing proviso in clause-(ii) of sub-Section (4) of Section-18 shall be substituted in the following manner:-

“Provided that the input tax credit on such purchases when sold in course of interstate trade and commerce shall be allowed only to the extent of Central Sales Tax payable on such sales made under sub-section (1) of Section 8 of The Centra

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2020 Supreme(Jhk) 134

Cases Referred (13)