Steel Authority of India Limited Vs State of Jharkhand. (Jharkhand High Court)
Steel Authority of India Limited (SAIL) filed a writ petition challenging the order passed by the Joint Commissioner of State Tax (Appeals), which rejected the carry forward of disputed credit under the Goods and Services Tax (GST) regime. SAIL had transitioned input tax credit from the earlier Value Added Tax (VAT) regime to the GST regime as per Section 140(1) of the Jharkhand Goods and Services Tax (JGST) Act. However, the State Tax authorities issued a show cause notice, stating that certain credits, including those for consumables and capital goods, were inadmissible under the JVAT Act and thus could not be transitioned to the GST regime. The authorities demanded a payment of over Rs. 37 crore, including interest and penalties, which was further confirmed by the Appellate Authority.
SAIL appealed the decision, arguing that the transitioning of credits was in compliance with the law, referencing a similar case involving Usha Martin Limited. The High Court of Jharkhand, after considering the case, ruled that the authorities’ actions were improper. It held that the transition of CENVAT credit under the GST regime could not be denied solely because the credit was inadmissible under the previous law. The court quashed the orders passed by both the Assessing Officer and the Appellate Authority, noting that the GST authorities had overstepped their jurisdiction. The court also directed the restoration of the Rs. 30.29 crore amount in SAIL’s electronic credit ledger and granted statutory interest. The authorities were, however, allowed to pursue proceedings under the repealed VAT Act, if deemed necessary, for the relevant periods.
