Mangla Hoist P. LTD vs. Union Of INDIA And Ors

Held

The Court held that the judgment in Brand Equity Treaties Limited vs. Union of India, which declared the time limit in Rule 117 of the CGST Rules, 2017, as directory and not mandatory, had not been stayed. Therefore, the respondents were under an obligation to comply with its directions. This included publicizing the judgment, uploading it on their website, and opening the common portal to enable the petitioner and similarly placed assessees to upload Form GST Trans-1 for claiming CENVAT tax credit. The Court directed the respondents to ensure compliance with the Brand Equity Treaties Limited judgment by June 19, 2020, given the June 30, 2020, cut-off date stipulated in that judgment. The Court did not expressly decide on the vires of Rule 117 itself, but rather directed compliance with the existing judgment that interpreted its nature.

Facts

The petitioner, Mangla Hoist P. Ltd., sought directions to open the GST portal to file its claim for CENVAT tax credit as of June 30, 2017, in Form Trans-1. The petitioner also sought to declare Rule 117 of the CGST Rules, 2017, ultra vires. The petitioner contended that it could not upload the form due to system errors and technical difficulties, and the respondents refused to extend the deadline. The petitioner relied on a recent Division Bench judgment in Brand Equity Treaties Limited vs. Union of India, which held the time limit in Rule 117 to be directory and directed the portal to be opened until June 30, 2020. The petitioner argued that despite this order, the respondents had not complied, compelling them to approach the court again.

Key Issues

1. Whether Rule 117 of the CGST Rules, 2017, prescribing a time limit for filing claims in Form GST Trans-1, is mandatory or directory? 2. Whether the respondents are obligated to open the GST portal to allow the petitioner to file its claim for CENVAT tax credit in Form GST Trans-1, in light of the judgment in Brand Equity Treaties Limited vs. Union of India? Petitioner's Arguments: The petitioner argued that the time limit in Rule 117 is directory, not mandatory, and that the respondents' failure to comply with the directions in Brand Equity Treaties Limited vs. Union of India necessitates the court's intervention. They relied on the Brand Equity Treaties Limited judgment itself. Respondents' Arguments: The respondents acknowledged the Brand Equity Treaties Limited judgment but stated they intended to challenge it by filing an appeal before the Supreme Court. They also pointed out that the petitioner had erroneously impleaded the Commissioner, Central Goods and Service Tax, Delhi South, instead of Delhi East.