Mahesh Agro Agencies Through Proprietor Jaikishore Rupchand Biyani vs. The Union Of INDIA And Others

Held

The Court acknowledged that the challenge to the validity of Section 140 and Rule 117 was previously negatived in the case of Nelco Limited. However, regarding the specific facts of Writ Petition No. 1690/2019, the Court found that the interest of justice would be served by allowing the petitioner to correct Form TRAN-1 and file Form TRAN-2. This was to be done without prejudice to the rights and contentions of both parties. The Court clarified that its decision in Heritage Lifestyles and Developers and Private Limited did not hold Section 140 and Rule 117 to be directory. Instead, the Court directed the respondents to consider whether the corrected/filed forms could be entertained in accordance with Section 140 and Rule 117(1). The Jurisdictional Assessing Authority was also directed to consider all issues raised by the petitioner, including merits, and the effect of the cited judgments, and take an appropriate decision within four weeks. If the petitioner's case was accepted, the reliefs would be granted within four weeks thereafter.

Facts

Several petitioners, including Ambica Fertilizers, Balaji Agro Agency, and others, filed writ petitions before the Bombay High Court. The core issue revolved around their inability to claim transitional input tax credit under the Goods and Services Tax (GST) regime. Specifically, petitioners like Ambica Fertilizers claimed to have inadvertently missed claiming an amount of approximately Rs. 13,17,956/- in their Form TRAN-1. They were unable to revise the form after the due date of December 27, 2017, and their subsequent representations for correction were not allowed. Other petitioners had not filed any forms for claiming credit at all. The petitioners challenged the validity of Rules 117 and 120A of the Central Goods and Services Tax Rules, 2017, and sought permission to correct their TRAN-1 forms and file TRAN-2.

Key Issues

1. Whether the time prescribed under Rule 117(1) of the Central Goods and Services Tax Rules, 2017, for filing Form TRAN-1 is directory or mandatory, concerning the claim of transitional input tax credit under Section 140 of the Act. Petitioner's arguments: The petitioners contended that the time prescribed under Rule 117(1) is directory, not mandatory. They relied on the judgment in Nelco Limited Vs. Union of India and Section 140. They further cited an unreported judgment in Heritage Lifestyles and Developers and Private Limited Vs. The Union of India, where the Court directed acceptance of TRAN-1 forms and granting of input tax credit. They sought liberty to correct their TRAN-1 forms and file TRAN-2. Revenue's arguments: The respondents, represented by the Assistant Solicitor General and AGP, strongly relied on the judgment in Nelco Limited V. Union of India, particularly paragraph 86, to argue that the constitutional validity of Rule 117 and Section 140(1) was upheld as intra vires, implying the time limits are mandatory.