Trivedi Ventures LLP 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 prior decision by a coordinate bench of the same High Court in Obelisk Composite Technology LLP Vs. Union of India & Others. Consequently, the Court rejected the prayer to declare Rule 117 unconstitutional or to read it down to remove the last date. However, considering that the Union of India 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 submit it to the GST Council for issuing a requisite certificate of recommendation, along with necessary particulars and evidence. If the petitioners' assertions were found to be correct, the GST Council was to issue the necessary recommendation to the Commissioner to enable the petitioners to avail CENVAT credit within the stipulated time of 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 inability of the petitioners to file Form TRAN-1 to claim transitional credit under the Central Goods and Services Tax Act, 2017, and the associated Rules. The petitioners sought permission to file Form TRAN-1 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 claim transitional credit under the Central Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Rules, 2017, in order to avail transitional credit in their Electronic Credit Ledger? (Question of law turning on Section 140 of the CGST Act and Rule 117 of the CGST Rules). 2. Whether the respondents should give effect to Form GST TRAN-1 that had been manually submitted by the petitioners to avail relevant legitimate Input Tax Credit? (Question of mixed law and fact). 3. In some petitions, 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 contended that they were unable to file Form TRAN-1 within the prescribed timelines due to technical glitches or other procedural issues and sought directions to allow them to file it. They also argued for the validity of manually submitted forms and, in some instances, challenged the constitutional validity of Rule 117, seeking it to be read down or declared invalid to remove the time bar. Revenue's arguments: The Revenue referred to a coordinate bench's decision in Obelisk Composite Technology LLP Vs. Union of India & Others, which held that the challenge to the constitutional validity of Rule 117 was no longer res integra. They 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 the procedure stipulated under Sub-rule 1(A) of Rule 117 required an application through the GST counsel for recommendation to the Commissioner.