Balaji Krishi Sewa Kendra Through Proprietor Govind Shivprasad Chandak vs. The Union Of INDIA And Others

Held

The Court held that while the challenge to the validity of Section 140 and Rule 117 was negatived in the case of Nelco Limited, the interest of justice would be served by allowing the petitioner in Writ Petition No. 1690/2019 to correct Form TRAN-1 and file Form TRAN-2. This would be without prejudice to the rights and contentions of both parties. The respondents were directed to consider whether the corrected Form TRAN-1 and any other forms filed/corrected by the petitioner could be entertained in accordance with Section 140 of the CGST Act, 2017, and Rule 117(1) of the CGST Rules, 2017. The Jurisdictional Assessing Authority was also directed to consider all issues raised by the petitioner, including the merits, and the effect of the judgments in Heritage Lifestyles and Developers and Private Limited and Nelco Limited. A decision was to be taken within four weeks, with communication within one week. If the petitioner's case was accepted, reliefs were to be granted within four weeks thereafter; otherwise, the petitioner could file appropriate proceedings. The Court clarified that the Heritage Lifestyles judgment did not hold that Section 140 and Rule 117 were directory.

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 ₹13,17,956/- in Form TRAN-1. They were unable to revise the form after the due date of December 27, 2017, and their subsequent representations were not allowed. The petitioners argued that the time prescribed for filing and revising Form TRAN-1 was directory, not mandatory, and sought permission to correct their forms and claim the credit. The respondents, Union of India and State of Maharashtra, relied on previous 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, concerning the petitioner's claim for transitional input tax credit (Section 140 of the CGST Act, 2017 and Rule 117(1) of the CGST Rules, 2017). Petitioner's Arguments: - The time prescribed under Rule 117(1) is directory, not mandatory, as supported by the judgment in Nelco Limited Vs. Union of India and an unreported judgment in Heritage Lifestyles and Developers and Private Limited Vs. The Union of India. - The petitioner in WP No. 1690/2019 missed a claim due to inadvertence and was not allowed to correct Form TRAN-1. - The petitioner sought liberty to correct Form TRAN-1 and file Form TRAN-2 for consideration on merits. Revenue/State's Arguments: - The constitutional validity of Rule 117 and Section 140(1) has been held to be intra vires, relying on the judgment in Nelco Limited V. Union of India, particularly paragraph 86.