The Union Of INDIA vs. M/S Aravind Lifestyle Brands LTD

Held

The Court held that the omission by the first respondent in not mentioning the quantity of goods held in stock in Column 7B of Form GST TRAN-1 was a bona fide mistake committed during the initial phase of the GST regime. The Court noted that the appellants themselves acknowledged the existence of several High Court decisions taking a similar view as the learned Single Judge, and that the Apex Court had not interfered with such orders. The Court found no illegality in the learned Single Judge's order, particularly the observations in paragraph 7, and concluded that it was not contrary to the provisions of the CGST Act and CGST Rules. The Court concurred with the views taken by the Delhi High Court and the Punjab and Haryana High Court, and therefore, the decision in Union of India and Another v. Kirloskar Pneumatic Co. Ltd. was deemed inapplicable. The appeal was dismissed.

Facts

The first respondent, M/s. Aravind Lifestyle Brands Ltd., filed its Form GST TRAN-1 on November 30, 2017, and amended it the same day. However, it failed to mention the quantity of goods held in stock in Column 7B. Rule 117 of the CGST Rules, 2017, prescribed filing of Form GST TRAN-2. An amendment on March 7, 2018, permitted submission of TRAN-2 by March 31, 2018, or an extended period. The first respondent attempted to file TRAN-2 on March 28, 2018, but encountered an error due to the incomplete TRAN-1. Despite extensions and representations to tax authorities, the issue persisted. The first respondent filed a writ petition, and the Single Judge directed the Assistant Commissioner of Central Tax to redress the grievance, enabling the filing of TRAN-2. The appellants, Union of India and others, appealed this order.

Key Issues

1. Whether the High Court, in exercise of its writ jurisdiction under Article 226 of the Constitution of India, can issue directions contrary to statutory provisions, specifically regarding the filing of Form GST TRAN-2 after the prescribed time has expired? (Turns on Section 140 of the CGST Act, 2017 and Rule 117 of the CGST Rules, 2017). Petitioner's arguments: The appellants contended that the Single Judge's direction to enable the first respondent to file TRAN-2 was contrary to statutory provisions and thus impermissible under Article 226, citing Union of India v. Kirloskar Pneumatic Co. Ltd. They argued that the order enabling filing after the expiry of the statutory period was illegal. Respondent's arguments: The first respondent argued that various High Courts have consistently taken a view similar to the Single Judge's order, relying on decisions like M/s. Blue Bird Pure Pvt. Ltd. vs. Union of India and Others. They highlighted that the omission in TRAN-1 was a bona fide mistake made in the early days of the GST regime and that the issue of allowing such filings had not been interfered with by the Apex Court.