M/S. Sunil Kumar And Company Sri Ganganagar vs. Union Of INDIA

Held

The Court held that the challenge to the constitutional validity of Rule 117 of the CGST Rules was no longer res integra, referencing previous judgments by the High Court and the Gujarat High Court. Therefore, the Court could not entertain the prayer to declare Rule 117 unconstitutional or to read it down as if there were no last date for filing TRAN-1. However, considering that the Union of India had extended the period for submitting GST TRAN-1 until December 31, 2019, the Court granted liberty to the petitioner. The petitioner was directed to make an application before the GST Council through the Standing Counsel, who was requested to forward it to the jurisdictional officer for onward submission to the GST Council. The GST Council was to issue a requisite certificate of recommendation, along with particulars and evidence, and if the petitioner's assertion was found correct, the GST Council was to issue a necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit within the stipulated time. The writ petition was disposed of in terms of these directions.

Facts

The petitioner, M/s. Sunil Kumar & Company, filed a writ petition seeking permission to file Form TRAN-1 under the Central Goods and Services Tax Act, 2017 (CGST Act) and CGST Rules, 2017, to avail transitional credit. They also prayed for the respondent-department to give effect to a manually submitted Form GST TRAN-1. The petitioner challenged the validity of Rule 117 of the CGST Rules. The respondents submitted that a similar writ petition, Obelisk Composite Technology LLP Vs. Union of India & Others, had been disposed of by a coordinate bench of the High Court. The petitioner sought to claim transitional credit of eligible duties on the appointed day as per Section 140 of the CGST Act.

Key Issues

1. Whether Rule 117 of the CGST Rules, 2017, which prescribes the procedure and time limit for claiming transitional credit by filing Form GST TRAN-1, is constitutionally valid and does not violate the provisions of the CGST Act, 2017, specifically Section 140. Petitioner's Arguments: The petitioner argued that they should be permitted to file Form TRAN-1 to avail transitional credit and that the manually submitted form should be given effect. They also challenged the validity of Rule 117 of the CGST Rules. Revenue's Arguments: The respondent revenue submitted that the issue regarding the challenge to Rule 117 was no longer res integra, citing the Gujarat High Court's decision in Willowood Chemicals Pvt. Ltd. Vs. Union of India. They also noted that the Union of India had extended the last date for submitting GST TRAN-1 up to December 31, 2019, and referred to a previous judgment of the High Court in M/s Shree Motors Vs. Union of India & Ors. regarding the procedure under Rule 1A of Rule 117.