Supreme Court Rejects Jharkhand's Plea Against SAIL, Upholds ₹30.29 Crore Input Tax Credit Relief
The Supreme Court of India dismissed State of Jharkhand's special leave petition against Steel Authority of India Ltd (SAIL) in a dispute concerning the transition of input tax credit (ITC) from the pre-GST regime, upholding the Jharkhand High Court's direction on January 30, 2025, to restore Rs. 30.29 crore with interest.
A Bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe found no ground to interfere with the high court's order and dismissed the appeal.
The dispute arose from the transition of input tax credit (ITC) from the pre-GST regime to GST. Steel Authority of India Ltd (SAIL), a PSU engaged in steel manufacturing, had unutilised VAT credit as on June 30, 2017, which it carried forward under Section 140 of the Jharkhand GST Act. A show cause notice dated December 21, 2023 alleged wrongful availment of ITC on consumables and capital goods under the earlier VAT law, making such a transition impermissible.
On January 8, 2018, the adjudicating authority denied the credit and raised a demand of about Rs. 37.03 crore, along with interest of about Rs. 4.18 crore and penalty of Rs. 3.70 crore. The appellate authority upheld this on December 13, 2019. SAIL's credit of about Rs. 30.29 crore was blocked in February 2020 and later adjusted on November 25, 2020 from the electronic credit ledger.
The Jharkhand High Court, by its order of January 30, 2025, held that eligibility of credit must be examined under the erstwhile law and not under GST proceedings. It quashed the impugned orders against SAIL and directed restoration of Rs. 30.29 crore with interest, while granting liberty to the tax authorities to proceed under the old law.
Finding no grounds to interfere with order, the supreme court dismissed the petition at the threshold.