Myers Tyre Supply (INDIA) vs. The Assistant Commisioner (St)

Facts

The petitioner, Myers Tyre Supply (India) Limited, challenged the validity of Rule 117(1) of the Central Goods and Services Tax (CGST) Rules, 2017, and its proviso. The petitioner argued that the time prescription within this rule, limiting the entitlement to claim input tax credit, was ultra vires Section 140(3) and Section 164 of the CGST Act, 2017. The petitioner also contended that the rule created discrimination by treating different classes of assessees unequally regarding input tax credit benefits. The challenge was primarily against the time limit for transitioning existing tax credits under the previous regime to the GST regime. The court was informed about a proposed amendment to Section 140 of the CGST Act.

Held

The petitioner, through their counsel, informed the Court that they had instructions not to proceed with the challenge raised to the vires of the provisions involved in the two writ petitions. Consequently, the Court permitted the petitioner to withdraw the writ petitions. As the petitioner withdrew the petitions, the Court did not delve into the merits of the arguments regarding the ultra vires nature of Rule 117(1) or the alleged discrimination under Article 14. The Court's decision was solely based on the petitioner's request for withdrawal. No specific finding was made on the validity of the rule or the constitutional challenge. The Court did not decide the core legal questions presented.

Key Issues

1. Whether the time prescription within Rule 117(1) of the CGST Rules, 2017, which limits the period for claiming transitional input tax credit, is ultra vires Section 140(3) and Section 164 of the CGST Act, 2017, thereby violating the substantive right to claim such credit? - Petitioner's argument: The time limit imposed by the rule dilutes the substantive right to claim input tax credit preserved under Section 140 of the Act. Reliance was placed on judgments from the Gujarat High Court (M/s.Siddharth Enterprises) and Punjab and Haryana High Court (Adfert Technologies Pvt. Ltd.). - Revenue/State's argument: Not recorded in the judgment. 2. Whether Rule 117(1) of the CGST Rules, 2017, creates discrimination by extending benefits to certain assessees under the new regime while denying similar benefits to assessees like the petitioner who transitioned from the previous regime, thus violating Article 14 of the Constitution? - Petitioner's argument: The rule creates two different classes of assessees for the same benefit, leading to discrimination. Assessees coming into existence after the appointed date under the new regime are extended certain benefits, which should also be available to the petitioner. - Revenue/State's argument: Not recorded in the judgment.