Ms Ceramic Tableware PVT LTD vs. Union Of INDIA And Ors

Held

The Court held that the challenge to the constitutional validity of Rule 117 of the CGST Rules was no longer res integra, referring to a previous decision in M/s Anupam Motors Vs. Union of India and Gujarat High Court's decision in Willowood Chemicals Pvt. Ltd. Vs. Union of India. Consequently, 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 until December 31, 2019, and referencing the procedure under Rule 1A of Rule 117, 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. The GST Council was to issue a requisite certificate of recommendation if the petitioners' assertions were found correct, enabling them to claim CENVAT credit within the stipulated time. 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 common prayer in these petitions was to permit them to file Form TRAN-1 under the Central Goods and Services Tax Act, 2017, and its rules, to avail transitional credit in their Electronic Credit Ledger. Some petitioners also sought to give effect to manually submitted Form GST TRAN-1 and 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 avail transitional credit under the CGST Act, 2017, and CGST Rules, 2017? (Question of law turning on Section 140 and Rule 117 of the CGST Act and Rules). 2. Whether Rule 117 of the CGST Rules, 2017, which prescribes a time limit for filing Form TRAN-1, is constitutionally valid? (Question of law turning on Rule 117 of the CGST Rules). Petitioner's arguments: The petitioners argued that they should be allowed to file Form TRAN-1 to claim transitional credit. They also contended that Rule 117 of the CGST Rules is unconstitutional and should be read down to remove the last date for filing TRAN-1, or that the facility to file TRAN-1 on the common portal should be revived. Some petitioners also sought to have their manually submitted TRAN-1 forms accepted. Revenue's arguments: The Revenue relied on a judgment of a co-ordinate bench in Obelisk Composite Technology LLP Vs. Union of India & Others, which had disposed of similar writ petitions. The Revenue also brought to the court's attention that the Union of India had extended the last date for submitting GST TRAN-1 up to December 31, 2019, and that Sub-rule 1(A) of Rule 117 requires an application through the GST council for recommendation.