M/S Kabel Tradelink PVT LTD 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, referencing previous judgments by the High Court and the Gujarat High Court. Therefore, the Court could not entertain the prayer to declare Rule 117 unconstitutional or to read it down as if there were no last date for filing TRAN-1. 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 to be correct, the GST Council was to issue a necessary recommendation to the Commissioner, enabling the petitioners to avail 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 avail 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, or in some cases, 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 turning on Section 140 and Rule 117 of the CGST Act and Rules). 2. Whether Rule 117 of the CGST Rules, which prescribes a last date 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. In some petitions, they challenged the validity of Rule 117 of the CGST Rules, contending it violates constitutional provisions by imposing a restrictive deadline. They also prayed for the revival of the filing facility on the common portal. 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 already been disposed of by a coordinate bench of the High Court. 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) and the proviso to Rule 117.