SC remands matter back to Jharkhand HC for fresh decision on Tata Steel’s writ petition against the denial of ITC to its Naomundi unit

The Supreme Court remanded the matter back to Jharkhand High Court for fresh decision on Tata Steel’s writ petition against the denial of ITC to its Naomundi unit.

Court observation 

The division bench of Justice Sanjiv Khanna and Justice Bela M. Trivedi noted that the senior counsel agreed that the reasoning given by the High Court in the impugned judgment on the locus standi of the appellant is not justified and correct. The appellant is a registered company, albeit for taxation purposes the units at Naomundi and Jamshedpur have been treated as separate assessees under the Jharkhand Value Added Tax Act, 2005.  

The court stated that the writ petition preferred by Tata Steel Ltd., which is a juristic person, could not have been dismissed as not maintainable when it had challenged the denial of input tax credit to the unit at Naomundi, in respect of the purchases made and utilised in the said unit.

The court found that the reasoning given by the High Court in paragraph 7 of the impugned order is rather cryptic and does not examine the issues and contentions which arise and should have been considered for interpreting the clause. 

The court further noted that the period involved in the present appeal are the financial years 2006-07 and 2007-08. 

Court Order 

The court allowed the appeal and set aside the impugned order interpreting Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005, as it existed before the Jharkhand Value Added Tax (Amendment) Ordinance, 2011, with an order of remand to the High Court for a fresh decision.

The court clarified that it has not expressed any opinion on interpretation of Clause (ix) to subsection (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005, pre and post the amendment or validity of the notification granting retrospective effect to the amendment.

Case title: TATA Steel ltd. v/s The State of Jharkhand and Ors.

Citation: CIVIL APPEAL NO(S). 7398 OF 2008 

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