JAI BAJRANG ENTERPRISES Vs. STATE OF JHARKHAND

JUDGEMENT

(1.) Heard learned counsel for the parties.

(2.) This writ petition has been filed by 25 (twenty five) petitioners, who are registered traders of coke and/or are dealing with the coal purchased from the subsidiaries of Coal India Ltd. and from other coal dealers/units. Petitioners are registered dealers under Central Sales Tax Act, 1956 and also are registered dealers under Bihar Finance Act (Act of 5 of 1981) and then also registered dealers under the Jharkhand Value Added Tax Act, 2005. Petitioners are paying the tax as collected under Central Sales Tax Act, 1956 to the State of Jharkhand upon every transaction for the inter -State trade and are also paying tax to the State of Jharkhand under the provisions of Jharkhand Value Added Tax Act, 2005. The coal/coke is a declared goods under Section 14 of the C.S.T. Act and as such the petitioners make payment to the State Government at the time of purchase of Run of Mines (R.O.M.) coal from the subsidiaries of Coal India Ltd. or from other coal dealers/ units. According to the petitioners, as per provisions of Central Sales Tax Act, 1956 there is no restriction imposed upon registered dealers to trade with unregistered dealers by other State, only the rate of tax leviable is higher in course of inter- State trade falling under Sub Section 1 of Section 8 of the C.S.T. Act. The petitioners also submitted that under the Jharkhand Value Added Tax Act, 2005, by Section 18, in-put tax credit has been given and earlier as per the Sub Clause (ii) of Sub Section 4 of Section 14, the in-put tax credit was allowable on the purchase of goods made within the State of Jharkhand from the registered dealers holding a valid certificate of registration and which are intended for the purpose of sale in course of inter State trade and commerce. However, the State of Jharkhand has imposed tax by substituting new clause in place of original Clause II of Sub Section 4 of Section 18 by inserting :

(3.) According to the learned counsel for the petitioners, by insertion of "falling under Sub Section 1 of Section 8 of the C.S.T. Act, 1956", the State has put restrictions against the inter-State sales which is a subject falling under Entry -42 of the Schedule 7 th of the Constitution of India and also is falling under List I (Union List). According to the learned counsel for the petitioners, the Parliament has exclusive power to make laws with respect to any of the matter enumerated in List I of the 7 th Schedule which is a Union List. Therefore, in view of the Entry 42 read with Article 246(i), the tax can be imposed only by the Parliament and not by the State legislation. Therefore, the State Government exceeded in its jurisdiction and has illegally imposed tax on the subject covered under Article 246(i) read with List I of Schedule 7th.