M/S Haryana Mill Store vs. Union Of INDIA And Others

Held

The Court held that while it would not declare Rule 117(1A) ultra vires, 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 understood by them, 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 Article 14 and Article 300A of the Constitution. Relying on the decision in Adfert Technologies Pvt. Ltd. and the Delhi High Court's judgment in 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 granted liberty to avail the ITC in question in GSTR-3B of July 2020. The respondents were at liberty to verify the genuineness of the claims.

Facts

The petitioner, M/s Haryana Mill Store, challenged the vires of Rule 117(1A) of the Haryana GST Rules, 2017, and sought permission to electronically upload Form TRAN-I to claim credit of excess VAT reflected in their pre-GST returns. The petitioner, engaged in trading paint and allied goods, was registered under the Haryana VAT Act, 2003, prior to July 1, 2017. They were entitled to claim credit of duties paid on inputs and VAT on inputs held in stock by furnishing Form GST TRAN-1. However, the petitioner failed to upload TRAN-I by the due date of December 31, 2017. The respondents, in exercise of powers under Rule 117(1A), extended the last date for filing TRAN-I to March 31, 2020, for registered persons facing technical difficulties.

Key Issues

1. Whether Rule 117(1A) of the Haryana GST Rules, 2017, is ultra vires the Constitution of India, particularly 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? Petitioner's arguments: The petitioner contended that the issue is covered by the judgment in Adfert Technologies Pvt. Ltd. vs. Union of India, where the Supreme Court dismissed the SLP. They also relied on Delhi High Court judgments in Brand Equity Treaties Ltd. vs. Union of India and SKH Sheet Metals Components vs. Union of India, which permitted petitioners to file TRAN-I by June 30, 2020, and directed respondents to allow similarly situated taxpayers to do so. The petitioner argued that the phrase "technical difficulty" in Rule 117(1A) is too broad and should not be narrowly interpreted to mean only "technical glitches on the common portal." They asserted that the government cannot adopt different standards for itself and taxpayers and that denying unutilized credit due to technical issues violates Articles 14 and 300A. Revenue's arguments: The respondents were unable to controvert the fact that the issue was covered by the cited judgments of the Punjab & Haryana High Court and the Delhi High Court.