Ms Jagdhatri Trade Private Limited Through Its Authorized Signatory Shri Ramesh Chandra Sharma vs. The Goods And Services Tax Network Through Its Chairman

Facts

M/s Jagdhatri Trade Private Limited (the petitioner) filed a writ petition before the Jharkhand High Court challenging Rule 117 of the Jharkhand Goods and Services Tax Rules, 2017, which prescribes a period of limitation for claiming Input Tax Credit (ITC) in Form GST TRAN-1. The petitioner argued that Section 140 of the Jharkhand GST Act, 2017, does not authorize the rule-making authority to prescribe such a time limit. The petitioner also sought to quash an order dated June 12, 2020, passed by the Assistant Commissioner of State Tax, Dhanbad, rejecting their manually filed Form GST TRAN-1 due to non-filing online and lack of information from the GST Council. The petitioner had previously applied to open the portal for filing TRAN-1 due to technical difficulties, but no action was taken. The respondents included the Goods and Services Tax Network and various state tax authorities.

Held

The Court noted that the petitioner had filed a revised TRAN-I during the window period granted by the Hon'ble Supreme Court in the case of Union of India and another versus Filco Trade Centre Pvt. Ltd. and another [2022 VIL 38 SC]. The learned counsel for the respondent also submitted that the writ petition had become infructuous. In light of the fact that the grievance of the petitioner had already been redressed in view of the judgment rendered by the Apex Court in Filco Trade Centre Pvt. Ltd. and another (supra), the writ petition was disposed of. The Court did not delve into the merits of the legal challenges to Rule 117 or Section 140, nor did it decide on the validity of the rejection order, as the matter was rendered infructuous by subsequent events and Supreme Court pronouncements.

Key Issues

1. Whether Rule 117 of the Jharkhand Goods and Services Tax Rules, 2017, to the extent it prescribes a period of limitation for claiming Input Tax Credit (ITC) in Form GST TRAN-1, is ultra vires to Section 140 of the Jharkhand Goods and Services Tax Act, 2017, as Section 140 does not authorize the rule-making authority to prescribe a time limit for filing Form GST TRAN-1 to claim ITC? 2. Whether the due date contemplated under Rule 117 of the Jharkhand Goods and Services Tax Rules, 2017, for claiming transitional credit is procedural and therefore directory, not mandatory? 3. In the absence of any time limit provided in Section 140 of the JGST Act, 2017, can such a claim in Form GST TRAN-1 be filed within three years from the date of coming into force of the JGST Act, 2017 (July 1, 2017), as per Article 137 of the Limitation Act, 1963? 4. Whether the order dated June 12, 2020, rejecting the petitioner's manually filed Form GST TRAN-1, is liable to be quashed? Petitioner's Arguments: The petitioner argued that Rule 117 is ultra vires Section 140 as the latter does not grant power to prescribe a time limit. They contended that the due date under Rule 117 is procedural and directory. In the absence of a statutory time limit, the claim should be permissible within three years under Article 137 of the Limitation Act. They also sought to quash the rejection order, highlighting their prior attempts to file due to technical issues and the inaction of the authorities. Respondent's Arguments: The judgment records no specific arguments from the respondents regarding the legal challenges to Rule 117 or Section 140. However, both parties later agreed that the writ petition had become infructuous.