M/S. Universal Cylinders Limited vs. The 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 of the Court and the Gujarat High Court. Therefore, the Court could not entertain the prayer to declare Rule 117 unconstitutional or to read it down to remove the last date. 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 was requested to forward it to the jurisdictional officer. This officer would then forward it to the GST Council for issuing a requisite certificate of recommendation. If the petitioners' assertions were found correct, the GST Council was to issue a necessary recommendation to the Commissioner to enable the petitioners to get the benefit of CENVAT credit within the stipulated time, i.e., on or before December 31, 2019. 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 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, GST Council, 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 claim transitional credit under the CGST Act, 2017, and CGST Rules, 2017? (Question of law) 2. Whether Rule 117 of the CGST Rules, 2017, which prescribes a last date for filing Form TRAN-1, is unconstitutional or liable to be read down to remove the last date? (Question of law) Petitioner's arguments: The petitioners contended that they should be allowed to file Form TRAN-1 to avail transitional credit. They also argued that Rule 117 of the CGST Rules, which imposed a deadline for filing this form, was unconstitutional and should be struck down or interpreted to allow filing without a time limit. Some petitioners also sought directions for the respondents to give effect to manually submitted TRAN-1 forms. Revenue's arguments: The revenue, citing a coordinate bench's decision in Obelisk Composite Technology LLP Vs. Union of India & Others, argued that similar writ petitions had been disposed of in terms of that order. The revenue 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, and that constitutional validity of Section 140(3) of CGST Act and the proviso to Rule 117 were dismissed.