The INDIA Cements Limited vs. The Union Of INDIA

Held

The Court held that the issue of allowing amendments to Form TRAN-1, even with delays and mistakes, is no longer res integra, having been affirmed by various High Courts and ultimately by the Supreme Court in the case of Adfert Technologies Pvt. Ltd. The Court found that the petitioner had taken necessary steps by filling Form GST TRAN-1 before the initial deadline of 27.12.2017. The Court agreed with the settled view that unavailed credit is a vested right and that procedural or technical grounds should not deny this right. Therefore, the Court allowed the petition, granting the petitioner liberty to make an application before the GST Council (through the Standing Counsel and jurisdictional officer) for a recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit. This exercise was to be completed within six months from the date of the order, strictly in accordance with law. The Court did not expressly leave any issue undecided.

Facts

The petitioner, The India Cements Limited, sought to revise/correct its GST Form TRAN-1 to claim transitional credit of eligible duties amounting to Rs. 7,89,421/- on unavailed credit on capital goods as of the appointed day. The petitioner filed TRAN-1 on 13.12.2017 but later realized it had entered incorrect details regarding the unavailed CENVAT credit. The petitioner approached the respondents in April 2019 to rectify this mistake. The respondents contended that the petitioner's delay in approaching them, after the initial deadline of 27.12.2017 for filing TRAN-1, constituted a non-curable default.

Key Issues

1. Whether the time limit specified in Rule 117(1) & 1(A) & Rule 120A of the CGST Rules, 2017, for filing Form TRAN-1 is ultra vires Section 140(2) of the CGST Act, 2017, and also arbitrary, unreasonable, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India? 2. Whether the due date contemplated under Rule 117 of the CGST Rules for claiming transitional credit is procedural and therefore directory, not mandatory? Petitioner's arguments: The petitioner argued that the time limit for filing TRAN-1 is procedural and directory, not mandatory, and that unavailed credit is a vested right that cannot be denied on technical grounds. They relied on judgments from the Rajasthan High Court (Obelisk Composite Technology LLP), Punjab & Haryana High Court (Adfert Technologies Pvt. Ltd.), and Delhi High Court (M/s. Blue Bird Pure Pvt. Ltd.), highlighting that mistakes in filing TRAN-1 should be rectifiable. They also pointed out that the Supreme Court affirmed the Punjab & Haryana High Court's decision in Adfert Technologies Pvt. Ltd. Respondents' arguments: The respondents argued that the petitioner's delay in rectifying the mistake (approaching in April 2019 for a mistake made in a form filed on 13.12.2017, with the initial deadline being 27.12.2017) was a non-curable default. They distinguished the cited precedents by stating that while flexibility was shown for technical glitches, the petitioner's situation was a mistake for which they should bear responsibility. They also referred to a Rajasthan High Court judgment (M/s. Shree Motors) that upheld the respondents' decision.