M/S. Alchem International PVT. LTD. vs. Union Of INDIA

Held

The Court held that the controversy in the present writ petitions was similar to that in the case of Obelisk Composite Technology LLP Vs. Union of India & Others, which had been disposed of by a Co-ordinate Division Bench of the same Court. The Court noted that the challenge to the constitutional validity of Rule 117 of the CGST Rules was no longer considered res integra, referencing previous judgments. Therefore, the Court rejected the prayer to declare Rule 117 unconstitutional. However, considering that the Union of India had extended the period for filing TRAN-1, the Court granted liberty to the petitioners to make an application before the GST Council through the Standing Counsel. This application was to be forwarded to the jurisdictional officer for onward transmission to the GST Council, which would then issue a requisite certificate of recommendation to the Commissioner. If the petitioners' assertions were found correct, the Commissioner would be directed to enable the petitioners to avail the benefit of CENVAT credit within the stipulated time, which was on or before December 31, 2019, as extended by the Union of India. The writ petitions were disposed of in terms of these directions.

Facts

Multiple petitioners, including Trivedi Ventures LLP, M/s Ceramic Tableware Private Limited, SRF Limited, Biogenetic Drugs Private Limited, M/s Pyramid Abrasives Pvt. Ltd., Viraya Steels Pvt. Ltd., M/s. Anusika Industries Limited, M/s Rays Power Experts Private Limited, M/s Agarwal Brothers, M/s. SRK Solenergi Private Limited, and M/s. Universal Cylinders Limited, filed writ petitions before the Rajasthan High Court. The core issue in these petitions was the inability of the petitioners to file Form TRAN-1 to claim transitional credit under the Central Goods and Services Tax Act, 2017, and the associated Rules. They sought permission to file the form and for the respondents to give effect to manually submitted forms to avail input tax credit. Some petitions also challenged the validity of Rule 117 of the CGST Rules.

Key Issues

1. Whether the petitioners should be permitted to file Form TRAN-1 to claim transitional credit under the CGST Act, 2017, and CGST Rules, 2017? (Question of law and fact) 2. Whether the respondents should give effect to manually submitted Form GST TRAN-1 to enable petitioners to avail legitimate input tax credit? (Question of law and fact) 3. Whether Rule 117 of the CGST Rules, 2017, is valid, particularly concerning the time limit for filing Form TRAN-1? (Question of law) Petitioner's Arguments: The petitioners argued that they should be allowed to file Form TRAN-1 to claim transitional credit. They also contended that the respondents should acknowledge and give effect to the forms that were manually submitted to the department. In some cases, the validity of Rule 117 of the CGST Rules was challenged, arguing it violates constitutional provisions by imposing an unfeasible time limit for filing TRAN-1. Revenue's Arguments: The respondents, including the Union of India and various GST authorities, relied on a previous judgment by a Co-ordinate Division Bench of the same High Court in Obelisk Composite Technology LLP Vs. Union of India & Others. This judgment had already addressed similar challenges to Rule 117, holding that such challenges were no longer res integra in light of other High Court decisions. The respondents also pointed out that the Union of India had extended the last date for submitting GST TRAN-1.