Vijay Agro Center Through Sole Proprietor Vijaykumar Ramnath Somani vs. The Union Of INDIA And Others

Held

The Court acknowledged that the challenge to the validity of Section 140 and Rule 117 had been negatived in the case of Nelco Limited. However, considering the facts of the Heritage Lifestyles and Developers and Private Limited case, where the petitioner was allowed to make a claim if otherwise eligible, the Court found it in the interest of justice to allow the petitioner in Writ Petition No. 1690 of 2019 to correct Form TRAN-1 and file Form TRAN-2. The Court clarified that this did not mean Section 140 and Rule 117 were held to be directory. The respondents were directed 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 judgments in Heritage Lifestyles and Nelco Limited, and take a decision within four weeks. If the petitioner's case was accepted, reliefs would be granted within four weeks thereafter.

Facts

The petitioners, including Ambica Fertilizers and others, filed writ petitions challenging the rejection of their claims for transitional input tax credit under the Goods and Services Tax (GST) regime. Specifically, in Writ Petition No. 1690 of 2019, the petitioner (Ambica Fertilizers) claimed to have inadvertently missed claiming approximately Rs. 13,17,956/- in Form TRAN-1. They were unable to revise the form after the due date of December 27, 2017, as there was no provision for revision beyond the initial filing and a single revision within the due date. The petitioners sought permission to correct their TRAN-1 forms and claim the transitional credit, arguing that the prescribed time limits were directory, not mandatory. The respondents, Union of India and State of Maharashtra, relied on existing judgments upholding the validity of the relevant rules and sections.

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, in light of the petitioner's inadvertent omission to claim transitional credit. Petitioner's arguments: The petitioner contended that the time prescribed under Rule 117(1) is directory, citing the judgment in Nelco Limited Vs. Union of India and the unreported judgment in Heritage Lifestyles and Developers and Private Limited Vs. The Union of India. They argued that they were not allowed to correct their Form TRAN-1 and therefore sought liberty to do so, along with filing Form TRAN-2, for consideration on merits. Revenue's arguments: The respondents (Union of India and State of Maharashtra) strongly relied on the judgment in Nelco Limited V. Union of India, particularly paragraph 86, to support their submission that the constitutional validity of Rule 117 and Section 140(1) is intra vires and that the time prescribed is mandatory.