M/S Annapoorna Motors vs. The Union Of INDIA

Held

The Court held that the CGST provisions related to filing and uploading forms, particularly transitional provisions, should be treated with a beneficial approach to allow assessees to make their filings and claim entitled input credit. The Court referred to its previous decision in Asiad Paints Limited and the Division Bench's confirmation in Union of India Vs. Asiad Paints Limited. The Court found that the petitioner's right to carry forward unutilized credit of duty/tax already paid cannot be denied on technicalities like limitation, especially in the context of a new tax regime and transitional period. Section 172 of the Act allows for suitable orders to remove difficulties. Therefore, the request to extend the time prescribed under Rule 117 cannot be denied. The Court issued a writ of certiorari quashing the decision of respondent No. 3 for not granting the petitioner another opportunity to file TRAN-1. A mandamus was issued directing the respondent authorities to open the portal for the petitioner to upload the necessary forms or, if the portal cannot be opened, to permit the filing of hard copies and act upon them. The authorities retain the power to verify the uploaded details. The Court found no requirement for issuing certiorari to quash sub-rule 1A to Rule 117 of CGST or the impugned circulars as sought in prayers A, B, C, and D.

Facts

The petitioner, M/s. Annapoorna Motors, sought to file Form TRAN 1 to claim transitional credit for excise duty and NCCD paid on two-wheeler stock held as of June 30, 2017. The petitioner contended that they faced technical difficulties on the common portal while attempting to upload the form. They also challenged various rules and circulars that imposed conditions or restrictions on filing or revising Form TRAN 1, particularly concerning the extension of time limits and the requirement to provide evidence of bona fide attempts. The respondents argued that the system was working properly and the petitioner failed to provide proof of their attempts to upload the form.

Key Issues

1. Whether sub-rule (1A) to Rule 117 of CGST Rules, 2017, inserted by Notification No. 48/2018, is arbitrary and ultra vires Section 140(3) of the CGST Act, 2017, to the extent it restricts extension of time only to those registered persons for whom the Council has made a recommendation? The petitioner argued that the term 'technical difficulties on the common portal' is arbitrary and that the rule unlawfully restricts extensions. The revenue's contention is not explicitly recorded on this specific point, but their general stance is that the petitioner failed to comply with procedures. 2. Whether parts 2 and 5.3 of Circular No. 39/13/2018, imposing a condition to enclose evidence of a bona fide attempt to comply with the law, are illegal, arbitrary, and ultra vires Section 140 of the CGST Act, 2017, and Rule 117 of CGST Rules, 2017, as no such condition is mentioned in the Act or Rules? The petitioner argued that this condition is not provided for in the Act or Rules. The revenue's contention is not explicitly recorded. 3. Whether the proviso to Rule 117(1) of CGST Rules, 2017, inserted by Notification No. 10/17 CT dated 28.06.2017, is ultra vires Section 140(3) of the CGST Act, 2017? The petitioner argued it is ultra vires. The revenue's contention is not explicitly recorded. 4. Whether CBEC Order No. 9/17 GST dated 15.11.2017, issued by Respondent No. 4, is invalid on the ground that the issuing authority lacked the power to prescribe time limits for extensions? The petitioner argued the authority was not empowered to prescribe time limits for extensions. The revenue's contention is not explicitly recorded. 5. Whether the decision of respondent No. 3, communicated by respondent No. 5, not granting the petitioner another opportunity to file Form TRAN 1, is illegal, arbitrary, and ultra vires Section 140 of the CGST Act, 2017, and Rule 117 of CGST Rules, 2017? The petitioner argued the decision was illegal and arbitrary. The revenue's contention is not explicitly recorded.