M/S Rama Ply And Timber 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 same High Court and the Gujarat High Court. Therefore, the Court could not entertain the prayer to declare Rule 117 unconstitutional or to remove the last date for filing. However, considering that the Union of India and the Finance Department had extended the period contemplated under Rule 1A of Rule 117 until December 31, 2019, the Court granted liberty to the petitioners. They were directed to make an application before the GST Council through the Standing Counsel, who would then forward it to the jurisdictional officer for submission to the GST Council. The GST Council was to issue a requisite certificate of recommendation to the Commissioner if the petitioners' assertions were found correct, enabling them to avail CENVAT credit within the stipulated time. The ratio decidendi is that while the validity of Rule 117 is settled, a procedural path for eligible taxpayers to seek relief exists through recommendations from the GST Council.

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 across these petitions was the inability of the petitioners to file Form TRAN-1 to avail transitional credit under the Central Goods and Services Tax Act, 2017 (CGST Act) and CGST Rules, 2017. Some petitioners also challenged the validity of Rule 117 of the CGST Rules. The respondents included the Union of India, the GST Council, the Goods and Services Tax Network (GSTN), and various GST Commissioners and officers.

Key Issues

1. Whether the petitioners should be permitted to file Form TRAN-1 to avail transitional credit under the CGST Act and CGST Rules, 2017? (Question of law and fact, concerning Section 140 of the CGST Act and Rule 117 of the CGST Rules). 2. Whether Rule 117 of the CGST Rules, which prescribes a last date for filing Form TRAN-1, is constitutionally valid? (Question of law, concerning Rule 117 of the CGST Rules). Petitioner's arguments: The petitioners contended that they should be allowed to file Form TRAN-1 to claim transitional credit. They also prayed for the respondents to give effect to manually submitted Forms GST TRAN-1. In some petitions, the validity of Rule 117 of the CGST Rules was challenged, arguing it violates constitutional provisions and should be read down to remove the last date for filing. Revenue's arguments: The revenue submitted that a similar writ petition, Obelisk Composite Technology LLP Vs. Union of India & Others, had been disposed of by a co-ordinate bench of the High Court. They also referred to a judgment in M/s Anupam Motors Vs. Union of India, which held that challenges to Rule 117 were no longer res integra in light of the Gujarat High Court's decision in Willowood Chemicals Pvt. Ltd. Vs. Union of India, dismissing challenges to the constitutional validity of Section 140(3) of the CGST Act and the proviso to Rule 117.