Mcc Entertainment vs. Union Of INDIA & Ors.

Held

The Delhi High Court disposed of the writ petition by directing that the petitioner's case would be examined in light of the Supreme Court's judgment dated 22.07.2022 in Union of India and Anr. vs. Filco Trade Centre (P.) Ltd and Ors. The Court held that the directions issued by the Supreme Court in the Filco Trade Centre case would apply mutatis mutandis to the petitioner. The substantive prayers of the petitioner concerning the constitutionality of Section 140 of the CGST Act and the allowance of transitional credit were thus to be considered within the framework established by the Supreme Court's ruling. The Court did not independently rule on the constitutionality of the section or the specific claim for ITC but deferred to the Supreme Court's pronouncement. The next date of hearing was cancelled.

Facts

The petitioner, MCC Entertainment, filed a writ petition challenging Section 140 of the Central Goods and Services Tax Act, 2017, as amended by the Finance Act, 2020, arguing it was unconstitutional. The petitioner sought to claim accumulated CENVAT credit. Additionally, the petitioner prayed for a direction to accept their manually filed GST TRAN-1 and to allow the Input Tax Credit (ITC) of Rs. 11,37,408/- claimed therein as per Section 140(3) of the CGST Act, 2017, to be credited to their electronic credit ledger for payment of output liability. The respondents, Union of India and GNCTD, stated that the prayers would be examined in light of a Supreme Court judgment.

Key Issues

1. Whether Section 140 of the Central Goods and Services Tax Act, 2017, as amended by the Finance Act, 2020, is unconstitutional for depriving the petitioner of accumulated CENVAT credit on the due date, as it pertains to the petitioner's right to claim transitional credit under Section 140(3) of the CGST Act, 2017. Petitioner's Contention: The petitioner argued that Section 140 of the CGST Act, 2017, as amended, is unconstitutional because it prevents them from taking credit of accumulated CENVAT credit on the due date. They sought a writ of certiorari for this declaration and a writ of mandamus to accept their manually filed GST TRAN-1 and allow the ITC of Rs. 11,37,408/-. Revenue's Contention: The respondents (Union of India and GNCTD) stated that the prayers in the writ petition would be examined in light of the directions issued by the Supreme Court in Union of India and Anr. vs. Filco Trade Centre (P.) Ltd and Ors.