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2022 (7) TMI 182 - HC - GSTBenefits of transitional credit - delay in filing Form TRAN-1 - HELD THAT:- In the case of the High Court of Delhi in Brand Equity Treaties Ltd. & Ors. vs. Union of India [2020 (5) TMI 171 - DELHI HIGH COURT] ultimately held that Rule 117 of the CGST Rules is directory in nature in so far as it prescribes the time limit for transitioning of credit is concerned and at the same time the Court has held that the same would not result in the forfeiture of the rights, in case the credit is not availed within the period prescribed. Ultimately, the Court after considering the terms of residuary provisions of the Limitation Act held that the period of three years should be the guiding principle and thus, a period of three years from the appointed date would be the maximum period for availing of such credit. Even this Court had an occasion to deal with similar issue in the case of M/s Siddharth Enterprises through partner Mahesh Liladhar Tibdewal vs. The Nodal Officer, [2019 (9) TMI 319 - GUJARAT HIGH COURT]. This Court vide order dated 06.09.2019 has allowed the aforesaid batch of writ applications with a direction to the respondent authorities to permit the writ applicants filing of declaration Form GST TRAN-1 and GST TRAN – 2 to enable them to claim transitional credit of the eligible duties in respect of the inputs held in the stock as on the appointed date in terms of Section 140(3) of the Act. At the same time, this Court further held that the due date as contemplated under Rule 117 of the CGST Rules for the purposes of claiming transitional credit are held to be procedural in nature and should not be construed mandatory. Indisputably, the writ applicant company at relevant stage though, belatedly had applied for filing of Form TRAN – 1 to avail the Input Tax Credit of the accumulated CENVAT credit as of 30.06.2017 as reflected in their letter dated 05.04.2018. The reason explained by the writ applicant for the delayed uploading of the Form appears to be genuine as the bank account of the writ applicant company was declared Non Performing Account - It is not in dispute that substantial amount to the tune of Rs.2,41,33,827/- were lying in the account of erstwhile regime and pursuant to the Notification dated 10.09.2018, the writ applicant had immediately approached to the respondent authority namely the Commissioner of GST vide letter dated 12.09.2018 to give him an opportunity to upload Form TRAN-1 by reopening the portal. There are no hesitation in reiterating that Rule 117 of the CGST Rule being directory in nature, the prescribed time limit for transitioning of credit would in no manner result in forfeiture of the rights of the writ applicants even though, when the credit is not availed within the period prescribed - application allowed.
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