M/S Pawan Steel Tubes vs. The Union Of INDIA

Held

The Court held that the controversy in the present writ petitions was similar to that in Obelisk Composite Technology LLP (supra). The Court noted that the challenge to the constitutional validity of Rule 117 was no longer res integra, referencing the 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 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 hand over the application to the jurisdictional officer for forwarding to the GST Council. The GST Council was directed to issue a requisite certificate of recommendation, along with necessary particulars and evidence, if the petitioners' assertion was found to be correct. This would enable the petitioners to get the benefit of 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 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, and the associated rules. Petitioners sought directions to permit filing of Form TRAN-1 and to give effect to manually submitted forms. 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 avail transitional credit under the Central Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Rules, 2017? (Question of law) 2. Whether Rule 117 of the CGST Rules, which prescribes a last date for filing Form TRAN-1, is constitutionally valid? (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 prayed for the respondents to give effect to manually submitted Form GST TRAN-1 to avail legitimate input tax credit. In some petitions, the validity of Rule 117 of the CGST Rules was challenged. Revenue's arguments: The Revenue, through the Additional Solicitor General, submitted that a similar writ petition, Obelisk Composite Technology LLP Vs. Union of India & Others, had been disposed of by a Co-ordinate Division Bench of the Court. The Revenue also brought to the Court's notice a judgment in M/s Anupam Motors Vs. Union of India, which held that challenges to Rule 117 were no longer res integra in view of a Gujarat High Court decision in Willowood Chemicals Pvt. Ltd. Vs. Union of India. The Revenue further stated 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 counsel.