M/S. Anusika Industries LTD 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 prior judgments, including the Gujarat High Court's decision in Willowood Chemicals Pvt. Ltd. Vs. Union of India and a co-ordinate bench's decision in M/s Anupam Motors Vs. Union of India. Therefore, the Court could not entertain the prayer to declare Rule 117 unconstitutional or read it down to remove the last date. However, considering that the Union of India had extended the period for submitting Form TRAN-1 until December 31, 2019, and referencing the directions in Obelisk Composite Technology LLP (supra), 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. 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 all petitions was the inability to file Form TRAN-1 to claim transitional credit under the Central Goods and Services Tax Act, 2017, and the CGST Rules, 2017. Petitioners 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 CGST Act and Rules, and whether the respondents should give effect to manually submitted forms (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 were unable to file Form TRAN-1 within the stipulated timelines, preventing them from availing legitimate transitional credit. They sought directions for the respondents to allow filing of the form, either electronically or by accepting manually submitted declarations, and to give effect to such filings. Some petitioners also challenged the constitutional validity of Rule 117, contending it violates their right to claim credit. 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. They 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. The Revenue also noted that the last date for submitting GST TRAN-1 had been extended to December 31, 2019.