M/S Sukh Suvidha Enterprises 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, referring to previous judgments, including one by the Gujarat High Court in Willowood Chemicals Pvt. Ltd. Vs. Union of India, which had dismissed challenges to the constitutional validity of Section 140(3) of the CGST Act and the proviso to Rule 117. Consequently, the Court rejected the prayer to declare Rule 117 unconstitutional or to read it down as if there were no last date for filing TRANS-1. However, considering that the Union of India had extended the period contemplated under Rule 1A of Rule 117 until December 31, 2019, the Court granted liberty to the petitioners to make an application before the GST Council through the Standing Counsel. The Standing Counsel was requested to forward the application to the jurisdictional officer for submission to the GST Council, which would then issue a requisite certificate of recommendation to the Commissioner. If the petitioners' assertion was found correct, the GST Council would issue the necessary recommendation to enable the petitioners to get the benefit of CENVAT credit within the stipulated time.

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 all 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 Central Goods and Services Tax Act, 2017, read with the Central Goods and Services Tax Rules, 2017, and whether the respondents should give effect to manually submitted forms for availing input tax credit? (Question of law and mixed fact and law, concerning Section 140 of the CGST Act and Rule 117 of the CGST Rules). Petitioner's arguments: The petitioners contended that they were unable to file Form TRAN-1 on the common portal and sought directions for its acceptance, either electronically or manually, to avail transitional credit. They also prayed for the revival of the filing facility for Form TRAN-1. Revenue's arguments: The Revenue brought to the Court's notice a previous judgment by a Co-ordinate Division Bench in Obelisk Composite Technology LLP Vs. Union of India & Others, which had disposed of similar writ petitions. The Revenue also highlighted that the Union of India had extended the last date for submitting GST TRAN-1 up to December 31, 2019, and referred to the procedure stipulated under Sub-rule 1(A) of Rule 117.