Ms Budhia Agencies Private Limited Through Its Director Sri Rahul Budhia vs. Union Of INDIA Through The Secretary Ministry Of Finance Department Of Revenue

Facts

The petitioner, M/s Budhia Agencies Private Limited, filed a writ petition before the Jharkhand High Court challenging the constitutional validity of Rule 117(1) of the Central Goods and Services Tax Rules, 2017. The petitioner sought to declare the provision ultra vires Section 140(3) read with Section 164 of the CGST Act, 2017, and also challenged the retrospective amendment of Section 140(3) of the CGST Act, 2017, by Section 128(c) of the Finance Act, 2020. The petitioner sought to avail transitional credit of eligible duties amounting to Rs. 1,09,80,215.38, which was paid under existing laws on inputs held in stock as of July 1, 2017. The petitioner had filed a manual declaration in FORM GST TRAN-1 on June 26, 2020.

Held

The petitioner, on instructions, sought to withdraw the writ petition. The reason for withdrawal was that the petitioner had filed its revised TRAN-1. The respondents' counsel submitted that the case was covered by the Apex Court's decision in Union of India and another versus Filco Trade Centre Pvt. Ltd. and another [2022 VIL 38 SC]. In light of the petitioner's submission to withdraw the petition, the High Court dismissed the writ petition as withdrawn. No specific finding was given by the Court on the constitutional validity of Rule 117(1) or the retrospective amendment of Section 140(3) as the matter was withdrawn.

Key Issues

1. Whether sub-Rule (1) of Rule 117 of the Central Goods and Services Tax Rules, 2017, is ultra vires Section 140(3) read with Section 164 of the Central Goods and Service Tax Act, 2017, to the extent it prescribes time and manner for availment of transitional credit? 2. Whether the retrospective amendment of sub-Section (3) of Section 140 of the CGST Act, 2017, by Section 128(c) of the Finance Act, 2020, validates the impugned sub-Rule (1) of Rule 117 of the CGST Rules, 2017, in the absence of a validation clause? 3. Whether sub-Rule (1) of Rule 117 of the CGST Rules, 2017, is unconstitutional and violative of Articles 14, 19(1)(g), 265, and 300A of the Constitution of India? The petitioner argued that Rule 117(1) prescribing time limits for transitional credit was ultra vires the parent Act and unconstitutional. They contended that the retrospective amendment of Section 140(3) did not validate the rule without a specific validation clause. The respondents, through their counsel, referred to the Apex Court's decision in Union of India and another versus Filco Trade Centre Pvt. Ltd. and another.