M/S Om Metals Auto 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 a previous decision in M/s Anupam Motors Vs. Union of India, which relied on the Gujarat High Court's judgment 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 for submitting GST TRAN-1 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 avail 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 Form TRAN-1 and for the respondents to give effect to manually submitted forms. In some petitions, Rule 117 of the CGST Rules was also challenged.

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 manually submitted forms should be given effect to? (Question of law and fact, concerning Section 140 of the CGST Act and Rule 117 of the CGST Rules). Petitioner's arguments: The petitioners argued that they were unable to file Form TRAN-1 within the prescribed timelines and sought directions for the respondents to allow them to file it, or to give effect to manually submitted forms, to avail legitimate input tax credit. Some petitioners also challenged the validity of Rule 117 of the CGST Rules. Revenue's arguments: The Revenue brought to the Court's notice a previous judgment by a co-ordinate bench in Obelisk Composite Technology LLP Vs. Union of India & Others, which had disposed of similar writ petitions. The Revenue also pointed out that the Union of India had extended the last date for submitting GST TRAN-1 up to December 31, 2019, and that Sub-rule (1A) of Rule 117 required an application through the GST council for recommendation.