M/S Elements Techno Fab PVT LTD Through Director Umesh Ramesh Dhoot vs. The Union Of INDIA And Others

Held

The Court acknowledged that the challenge to the validity of Section 140 and Rule 117 was negatived by this Court in the case of *Nelco Limited*. While not agreeing with the petitioners' submission that the *Heritage Lifestyles and Developers* judgment held Section 140 and Rule 117 to be directory, the Court found that the interest of justice would be served by allowing the petitioner in WP No. 1690/2019 to correct Form TRAN-1 and file Form TRAN-2. The respondents were directed to consider the entertainability of these forms 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 the merits and the effect of the *Heritage Lifestyles* and *Nelco Limited* judgments, and take an appropriate decision within four weeks. If the petitioner's case is accepted, the reliefs sought would be granted within four weeks thereafter. The Court made the rule absolute in these terms.

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 WP No. 1690/2019, 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. Other petitioners had not filed any forms for claiming credit.

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? 2. Whether the petitioners, who inadvertently missed claiming transitional input tax credit in Form TRAN-1 or failed to file it, should be permitted to file or revise the form to claim the credit? Petitioner's arguments: The petitioner, through their counsel Mr. Patkar, argued that the time prescribed under Rule 117(1) is directory, not mandatory, relying on the judgment in *Nelco Limited Vs. Union of India* and Section 140. They also cited an unreported judgment in *Heritage Lifestyles and Developers and Private Limited Vs. The Union of India*, where the Court directed the respondents to accept the TRAN-1 form and grant credit. The petitioner sought liberty to correct Form TRAN-1 and file Form TRAN-2 for consideration on merits. Revenue's arguments: The learned Assistant Solicitor General, Mr. Talhar, and Mr. P.P. Dawalkar for the respondents 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, implying the time limits are mandatory.