In a major relief to Steel Authority of India (SAIL), the Jharkhand High Court has directed the department to restore the amount of Rs. 30.30 crores along with statutory interest in electronic credit ledger of SAIL.
The chief Justice M.S. Ramachandra Rao and Justice Deepak Roshan has relied on the decision of Usha Martin Limited Vs. Additional Commissioner, Central GST & Excise, Jamshedpur & Ors. in which it was held that the initiation of proceedings by respondent/department under section 73(1) of the C.G.S.T. Act, 2017 for alleged contravention of the C.E.A. and Finance Act, read with C.C.R. against the petitioner by filing TRAN 1 in terms of section 140 of the CGST. The Act for transition of CENVAT credit as being inadmissible under the existing law was beyond his jurisdiction.
The petitioner/assessee, SAIL is a Public Sector Undertaking (PSU), is engaged in manufacture of various steel products and was registered under the provisions of the Jharkhand Value Added Tax Act, 2005 (JVAT Act) and with the implementation of GST regime, petitioner has also obtained registration under the provisions of ‘Jharkhand Goods and Services Tax Act, 2017.
Under the VAT regime, the Petitioner Company was having an un-availed input tax credit which was transitioned by it under the GST regime in terms of Section 140(1) of JGST Act. However, vide Show Cause Notice dated 21.12.2023, proceeding under Sections 73,74, 122, 132(1)(d) of JGST Act was initiated against the petitioner
The petitioner filed a detailed reply and rebutted all the allegations made in the show cause notice. However, Assessing Officer i.e. Deputy Commissioner of State Tax, Bokaro, vide its order dated 08.01.2018, denied transitioning of the credit under GST regime and, accordingly, raised a demand of Rs. 37,03,90,184 upon the petitioner company along with interest amounting to Rs. 4,18,89,607.65 under Section 50 of JGST Act and even imposed penalty amounting to Rs. 3,70,39,018.40 under Section 73(9) of JGST Act on the ground that transitioning of inadmissible input tax credit under the GST Act was illegal.
The petitioner preferred an appeal before the Appellate Authority, but, the Appellate Authority, vide impugned Judgment and order, rejected the appeal filed by the petitioner and confirmed the adjudication order dated 08.01.2018.
Consequent upon confirmation of demand by Appellate Authority, Deputy Commissioner of State Tax blocked credit of SGST amounting to Rs. 30,29,99,999 and credit of Cess amounting to Rs. 13,76,62,229 in the month of February, 2020 in electronic Credit Ledger of the petitioner. The Deputy Commissioner of State Tax, unblocked the amount from electronic Credit Ledger of the petitioner, but adjusted the credit of SGST lying in electronic Credit Ledger of the petitioner amounting to Rs.30,29,99,999 against the demand raised in the adjudication order.
Thus, an amount of Rs. 30,29,99,999 was appropriated from the electronic Credit Ledger of the petitioner towards adjustment against the impugned demand.
The court held that since department have already recovered an amount of Rs.30,29,99,999/- against the impugned demand by reversing the credit available in electronic Credit Ledger of the petitioner company, the department is directed to restore the amount of Rs. 30,29,99,999/- along with statutory interest in electronic Credit Ledger of the petitioner within a period of four weeks from the date of the order.
The court directed that the department are at liberty to initiate proceeding under the provisions of the repealed Act i.e. VAT Act, 2005 against the petitioner for relevant tax periods for availment of alleged inadmissible input tax credit in accordance with law, if so advised.
Case Details
Case Title: M/s. Steel Authority of India Limited Versus The State of Jharkhand
Case No.: W.P. (T) No. 220 of 2021
Date: 30 /01/2025
Counsel For Petitioner: Sumeet Kumar Gadodia
Counsel For Respondent: Sachin Kumar
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