M/S Ashiana Ispat 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 prior judgments of 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. 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, along with necessary particulars and evidence. If the petitioners' assertion was found to be correct, the GST Council was to issue a recommendation to the Commissioner to enable the petitioners to get the benefit of CENVAT credit within the stipulated time, i.e., on or before December 31, 2019. 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 petitioners' inability to file Form TRAN-1 to claim transitional credit under the Central Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Rules, 2017. Some petitioners also challenged the validity of Rule 117 of the CGST Rules. The petitions were consolidated as they involved common questions of law.

Key Issues

1. Whether the petitioners should be permitted to file Form TRAN-1 to avail transitional credit in their Electronic Credit Ledger, in compliance with the CGST Act and CGST Rules? 2. Whether the respondents should give effect to Form GST TRAN-1 that was manually submitted to avail legitimate Input Tax Credit? 3. Whether Rule 117 of the CGST Rules, which prescribes a last date for filing Form TRAN-1, is valid? The petitioners argued that they should be allowed to file Form TRAN-1 to claim transitional credit, and that manually submitted forms should be given effect. Some petitioners challenged the constitutional validity of Rule 117 of the CGST Rules, arguing it violates constitutional provisions and should be read down to remove the last date for filing. The revenue contended that a coordinate bench of the High Court in Obelisk Composite Technology LLP Vs. Union of India & Others had already dealt with similar issues, referencing a judgment in M/s Anupam Motors Vs. Union of India which held challenges to Rule 117 as 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 noted the extension of the last date for submitting GST TRAN-1 to December 31, 2019.