Khushi Doshi
Published On: March 1, 2022 at 12:29 IST
The Supreme Court Bench comprised of Justices Sanjiv Khanna and Bela M. Trivedi resentenced a case to the Jharkhand High Court for a new ruling on Tata Steel’s Writ Petition challenging the denial of input tax credit to its Naomundi unit.
The Court ruled that the High Court erred in ruling that Tata Steel lacked Locus Standi to file a Writ Petition challenging the denial of input tax credit to its Naomundi unit for purchases made and used by it.
Because Tata Steel is a Registered Company and thus a Juristic Person, the Court ruled that its Writ Petition could not be quashed as unconstitutional, even though its units are treated as separate assesses under the Jharkhand Value Added Tax Act, 2005.
Furthermore, the Court held that the High Court’s justification in Analysing the provisions of Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005 was ambiguous and that it did not examine the relevant issues while interpreting the said provision of the Act.
The Court observed that the High Court should have considered the aspect of the said provision that was amended concerning matters by the Jharkhand Value Added Tax (Amendment) Ordinance, 2011, in the context of the following financial years considered in the current Case.
Allowing Tata Steel’s plea against the Jharkhand High Court’s judgment, the Court set aside the High Court’s order interpreting Clause (ix) to sub-section (8) of Section 18 of the Jharkhand Value Added Tax Act, 2005 as it existed before the amendment and remanded the case to the High Court for a new decision.
The Court ruled that it had not voiced an opinion on the analysis of the aforementioned clause or the Legality of the notification making the Amendment retroactive and that Tata Steel could challenge it.
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