M/S Modern Motor Works vs. Union Of INDIA And Others

Held

The Court held that while it would not declare Rule 117(1A) invalid, the petitioner was entitled to carry forward the CENVAT credit accrued under the Central Excise Act, 1944. The repeated extensions granted by the respondents for filing TRAN-I in cases of technical glitches, as per their understanding, vindicated the petitioner's claim. The Court found that denying unutilized credit to dealers unable to furnish evidence of attempting to upload TRAN-I would amount to a violation of Articles 14 and 300A of the Constitution. Relying on the judgments in Adfert Technologies Pvt. Ltd. and Brand Equity Treaties Ltd., the Court allowed the petition. The respondents were directed to permit the petitioner to upload TRAN-I on or before June 30, 2020. If the respondents failed to do so, the petitioner was permitted to avail the ITC in question in GSTR-3B of July 2020. The respondents were granted liberty to verify the genuineness of the petitioner's claims. The Court did not expressly leave any issue undecided.

Facts

The petitioner, M/s Modern Motor Works, a partnership firm engaged in automobile spare parts trading, challenged the vires of Rule 117(1A) of the Haryana GST Rules, 2017. They sought permission to electronically upload Form TRAN-I to claim credit for excess VAT reflected in their pre-GST returns. The petitioner failed to file TRAN-I by the original due date of December 31, 2017, due to alleged technical glitches on the GST portal. The respondents had extended the date for filing TRAN-I to March 31, 2020, under Rule 117(1A) for persons facing technical difficulties. The petitioner argued that the issue was covered by previous High Court judgments, including their own in Adfert Technologies Pvt. Ltd. and the Delhi High Court's decision in Brand Equity Treaties Ltd.

Key Issues

1. Whether Rule 117(1A) of the Haryana GST Rules, 2017, is ultra vires the Constitution, specifically Articles 14 and 300A, by arbitrarily restricting the extension of time for filing Form TRAN-I only to cases of technical difficulties on the common portal? 2. Whether the Petitioner is entitled to avail credit of excess VAT reflected in their pre-GST returns by filing Form TRAN-I, despite missing the original deadline, due to technical difficulties? Petitioner's Arguments: The petitioner contended that the issue was squarely covered by the Punjab & Haryana High Court's judgment in Adfert Technologies Pvt. Ltd. (SLP dismissed by the Supreme Court) and the Delhi High Court's decisions in Brand Equity Treaties Ltd. and SKH Sheet Metals Components. These judgments allowed similarly situated taxpayers to file TRAN-I beyond the prescribed due date, holding that the government cannot adopt different standards for itself and taxpayers and that vested credit is a property right under Article 300A. Respondents' Arguments: The respondents, through their counsel, were unable to controvert the fact that the issue was covered by the cited judgments.