Ms Shri Enterprises Through Its Proprietor Shri Rajnikant Sharma vs. The Goods And Services Tax Network Through Its Chairman

Facts

M/s Shri Enterprises, a proprietary concern, filed a writ petition before the Jharkhand High Court challenging the rejection of its manually filed Form GST TRAN-1 by the Deputy Commissioner of State Tax. The rejection was based on the ground that the form was not filed online and there was no directive from the GST Council to accept offline submissions. The petitioner had previously applied for the opening of the GST portal to file TRAN-1 due to technical difficulties. The petitioner sought a declaration that Rule 117 of the Jharkhand Goods and Services Tax Rules, 2017, prescribing a limitation period for claiming Input Tax Credit (ITC) in Form GST TRAN-1, was ultra vires Section 140 of the Act. The petitioner also sought to quash the rejection order and requested directions to accept and decide its claim on merits. Subsequently, the petitioner withdrew the prayer challenging the vires of Rule 117.

Held

The Court noted that the petitioner had withdrawn the prayer challenging the vires of Rule 117. The Court then referred to the Supreme Court's order dated 22.07.2022 in the case of Union of India and Another Versus Filco Trade Centre Pvt. Ltd. & Another. This order directed the GST Network to open the common portal for filing Forms TRAN-1 and TRAN-2 for two months, from 01.09.2022 to 31.10.2022. It further directed that any aggrieved registered assessee could file or revise the relevant form irrespective of whether they had filed a writ petition or if their case was decided by the ITGRC. The concerned officers were given 90 days thereafter to verify the claims and pass appropriate orders on merits after granting an opportunity to the parties. The Court held that the petitioner's case would also abide by these directions. Therefore, the writ petition was disposed of to allow the petitioner to file the requisite Form TRAN-1 during the specified window period. The issue regarding the limitation period and the validity of the rejection order were effectively addressed by the Supreme Court's directive, allowing the petitioner an opportunity to file the form.

Key Issues

1. Whether 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, is ultra vires Section 140 of the Jharkhand Goods and Services Tax Act, 2017, as Section 140 does not authorize the rule-making authority to prescribe such a time limit? (This issue was later withdrawn by the petitioner). 2. Whether the due date contemplated under Rule 117 for claiming transitional credit is merely directory and not mandatory, given the absence of a time limit in Section 140 of the JGST Act, 2017? 3. Whether the petitioner's claim in Form GST TRAN-1 can be filed within three years from the date of the Act coming into force, as per Article 137 of the Limitation Act, 1963, in the absence of any time limit in Section 140? 4. Whether the rejection of the petitioner's manually filed Form GST TRAN-1 by the Deputy Commissioner of State Tax was justified, given the alleged technical difficulties faced by the petitioner in filing it online and the subsequent application for portal opening? Petitioner's arguments: The petitioner argued that Section 140 of the JGST Act, 2017, does not empower the rule-making authority to prescribe a time limit for filing Form GST TRAN-1. They contended that the due date for transitional credit is procedural and directory, not mandatory. In the absence of a statutory time limit, the claim should be permissible within three years as per the Limitation Act. They also argued that the rejection was erroneous as they faced technical glitches and had sought to rectify the situation. The petitioner relied on the Supreme Court's decision in Union of India and Another Versus Filco Trade Centre Pvt. Ltd. & Another. Revenue/State's arguments: The respondents submitted that the directions issued by the Apex Court in the case of Filco Trade Centre Pvt. Ltd. and Another would govern the case.