M/S Ds Techno Roll Forms LLP Through Partner Umesh Ramesh Dhoot vs. The Union Of INDIA And Others

Held

The Court, while not agreeing with the petitioners' submission that the judgment in *Heritage Lifestyles and Developers and Private Limited* held Section 140 and Rule 117 to be directory, found that 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. The Court directed the respondents to consider whether the corrected Form TRAN-1 and any subsequent forms filed by the petitioner could be entertained in accordance with Section 140 of the Central Goods and Services Tax Act, 2017, and Rule 117(1) of the Central Goods and Services Tax Rules, 2017. The Jurisdictional Assessing Authority was also instructed 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*, and to take an appropriate decision within four weeks. If the petitioner's case was accepted, the reliefs sought would be granted within four weeks thereafter.

Facts

The petitioners, including Ambica Fertilizers and Balaji Agro Agency, filed writ petitions challenging the rejection of their claims for transitional input tax credit under the Goods and Services Tax (GST) regime. The core issue was their inability to revise or correct Form TRAN-1 after the prescribed due date, leading to the loss of a claimed credit amount of approximately Rs. 13,17,956/- for one petitioner. The petitioners argued that the time limits prescribed under Rule 117 of the Central Goods and Services Tax Rules, 2017, were directory and not mandatory, and sought permission to correct their TRAN-1 forms. The respondents relied on previous judgments upholding the validity of the rules.

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 under Section 140(3) of the Central Goods and Services Tax Act, 2017. Petitioner's arguments: The petitioner contended that the time prescribed for filing Form TRAN-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 missed out on claiming credit due to inadvertent errors and sought liberty to correct Form TRAN-1 and file Form TRAN-2. They also submitted that the respondents had not entertained their application for correction. Revenue's arguments: The respondents, through the Assistant Solicitor General and AGP, 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.