Srf Limited vs. Additional Commissioner

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 of the Rajasthan High Court in Obelisk Composite Technology LLP and M/s Anupam Motors, and the Gujarat High Court in Willowood Chemicals Pvt. Ltd. Therefore, the Court rejected the prayer to declare Rule 117 unconstitutional or to read it down to remove the last date for filing TRAN-1. However, considering that the Union of India had extended the period 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. If the petitioners' assertions were found correct, the GST Council was directed 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 of the petitioners to file Form TRAN-1 to claim transitional credit under the Central Goods and Services Tax Act, 2017 (CGST Act) and CGST Rules, 2017. 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 can be permitted to file Form TRAN-1 to claim transitional credit under the CGST Act and CGST Rules, and whether the respondents should give effect to manually submitted forms for availing input tax credit? (Question of law and mixed fact/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 manual filing or revival of the online facility. They argued for the necessity of availing transitional credit. Revenue's arguments: The Revenue brought to the Court's notice a previous judgment in Obelisk Composite Technology LLP Vs. Union of India & Others, which dealt with similar issues. They also 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. 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 that Sub-rule 1(A) of Rule 117 required an application through the GST council.