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2023 (10) TMI 724 - HC - VAT and Sales TaxInput Tax Credit - Intrastate stock transfer of goods - denial of credit is contrary to amended provisions of Section 18(8)(ix) of the Jharkhand Value Added Tax Act, 2005 or not - HELD THAT:- By bare perusal of the provisions of the JVAT Act, 2005 it would transpire that said provisions are in consonance with the scheme of Value Added Tax Regime introduced in the Country. From the scheme of JVAT, 2005 it would be evident that output tax liability of a dealer was required to be determined after subtracting therein the input tax paid by the dealer. ITC is claimed by a manufacturer on its input which is, admittedly, used for manufacture of goods, which is intended for sale. If the reasoning given by the Tribunal is accepted, then a manufacturer would get ITC on input if the goods are manufactured by it and sold by it itself. Whereas, the manufacturer would not be entitled to ITC if the goods are manufactured but not sold by manufacturer itself and stock transferred to its branch/stockyard/other units etc. up to the stage when the final product is sold - This is clearly not the intent of the Scheme of JVAT Act and the manufacturer is not required to wait for availment of ITC to a stage of ultimate sale of goods but it is entitled for ITC if the goods are merely ‘intended for sale’. Almost identical issue came up for consideration before the Hon’ble Apex Court by interpreting almost pari materia provisions contained under Section 8(3)(b) of the Central Sales Tax Act, 1956 in the case of ASSESSING AUTHORITY-CUM-EXCISE AND TAXATION OFFICER, GURGAON AND ANOTHER VERSUS EAST INDIA COTTON MFG. CO. LTD. [1981 (7) TMI 205 - SUPREME COURT] - In the said Judgment, Hon’ble Apex Court in categorical term has held that the words ‘for sale’ following the word ‘goods’ in Section 8(3)(b) of the Central Sales Tax Act 1956 clearly indicate that the goods manufactured or processed must be goods ‘for sale’; in other words, they must be ‘intended for sale’ either by registered dealer himself or by anyone else. Thus, Petitioner is entitled to claim full ITC on Intrastate stock transfer of goods and, consequentially, the impugned orders being the orders dated 05.12.2012, impugned Judgment and order dated 10th August, 2021 passed by Commercial Taxes Tribunal, Jharkhand and impugned Judgment and Order passed by Commercial Taxes Tribunal, Jharkhand are hereby quashed and set aside. Application allowed.
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