M/S Malwa Traders vs. Union Of INDIA And Others

Held

The Court disposed of the writ petitions in terms of its decision in CWP No. 33742 of 2019, titled M/s Triveni Needles Pvt. Ltd. Vs. Union of India and others, decided on January 28, 2020. Although the specific findings and reasoning of the earlier judgment are not detailed in this extract, the disposal in terms of that decision implies that the Court likely followed the precedent set in the Triveni Needles case. This suggests that the Court may have found in favor of the petitioners, or at least granted some form of relief, by directing the respondents to take a specific action regarding the uploading of Form TRAN-01, possibly by reopening the portal or allowing manual filing, as is common in such cases where procedural hurdles prevent the availing of transitional credit. The ratio decidendi would be that procedural rules should not defeat substantive statutory rights, and where a portal mechanism fails or creates an impediment, alternative remedies or directions may be necessary. The operative direction was to dispose of the petitions in terms of the previous order.

Facts

Multiple petitioners, including M/s Malwa Traders, M/s G.G. Metal Works, and M/s A.S. Industries, filed writ petitions before the Punjab and Haryana High Court. They sought a writ in the nature of Certiorari to declare Rule 117 of the CGST Rules, 2017, and HGST Rules, 2017, as ultra vires Section 140 of the CGST Act, 2017. The petitioners also prayed for directions to the respondents to open the portal for them to upload Form TRAN-01. The respondents, Union of India and others, were represented by various advocates who accepted notice. The court noted that the issue involved was similar to a previous case, CWP No. 33742 of 2019, titled M/s Triveni Needles Pvt. Ltd. Vs. Union of India and others, decided on January 28, 2020.

Key Issues

1. Whether Rule 117 of the CGST Rules, 2017, and HGST Rules, 2017, are ultra vires Section 140 of the CGST Act, 2017, concerning the eligibility and procedure for claiming transitional credit through Form TRAN-01? The petitioners argued that the rules, by imposing procedural limitations or deadlines not explicitly provided for in the parent Act, render Section 140 ineffective and deny them their legitimate transitional credit. They contended that the portal closure for uploading Form TRAN-01, as mandated by the rules, is arbitrary and deprives them of their statutory right. The revenue or State did not record any specific arguments in the judgment, but their implicit stance would be that the rules are validly framed and within the scope of the Act, and that the petitioners failed to comply with the prescribed procedures. The court was asked to decide if the rules, in their application, create an unreasonable restriction on the right to claim transitional credit.