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2020 (3) TMI 1087 - HC - GSTFiling of Form GST TRAN-1 - time limit for filing of the form - Petitioner has challenged the Rule 117 of the Central Goods and Services Tax Rules, 2017 as ultra-vires Sections 140(1), 140(2), 140(3) and 140(5) of the Central Goods and Services Act, 2017 to the extent that it prescribes a time limit for filing of TRAN-1 Form. Challenge to the impugned Rule on the ground of it being ultravires of the parent statute - HELD THAT:- The time limit in Rule 117(1) is traceable to the rule-making power conferred in Section 164(2). The credit envisaged under Section 140(1) being a concession, it can be regulated by placing a time limit. Therefore, the time limit under Rule 117(1) is not ultra-vires of the Act - In view of the finding that the rule-making power exists for Rule 117 and traceable to Section 164, laying the Rule before the Parliament strengthen the case of the Respondents for supporting its validity. Challenge on the ground of the Rule being unreasonable and violative of Article 14 of the Constitution on India - HELD THAT:- The GST Act deals with the generation and distribution of the revenue. The collected revenue is expended on various functions for which budgetary allocations are made and time limits are stipulated for the execution of various schemes. For fiscal planning, certainty regarding receipt and distribution of revenue is necessary. If relief is to be granted to the individual Petitioner overriding the time limit on equity, the perception of what is equitable will differ from authority to authority. This would lead to uncertainty. The operation of this complicated tax system will become unworkable. The time limit placed under the impugned rule being rooted in need to have certainty in fiscal management, we are of the opinion that equity jurisdiction ought not to be exercised - the time limit stipulated under Rule 117 is neither unreasonable or arbitrary nor violative of Article 14. This rule is in accordance with the purpose laid down in the Act. Meaning of the phrase ‘technical difficulties’ under Rule 117(1A) and the role of the IT Redressal Cell and whether by creating categories discretion is being fettered - HELD THAT:- The categorization made by the Cell is not fettering the discretion but involving rules of evidence to determine whether a registered user encountered difficulties while submitting forms on the common portal. It is only if the registered user encountered technical difficulties on the common portal, that Rule 117(1A) comes into play - The input tax credit in the transitional provision is a concession to be utilised in a time-bound manner, and further extension is given if the GST Council finds that there was a technical difficulty at its end. If there is no technical difficulty on the common portal for the registered user, this additional concession is not extended. Whether to grant further concession as Rule 117(1A) will be determined from examination the system logs from the portal. Exercise of equity jurisdiction in some cases and not in other cases would cause an anomalous situation, particularly when a time limit has been placed in a taxing statute for achieving certainty and finality. Relief to the petitioner - HELD THAT:- The time limit stipulated under Rule 117 of the Rules is not ultra vires of the Act. This Rule is traceable to the power conferred under section 164(2) of the Act. The time limit stipulated in Rule 117 is in consonance with the transitional nature of the enactment, and it is neither arbitrary nor unreasonable. Availment of input tax credit under section 140(1) is a concession attached with conditions of its exercise within the time limit. The IT Grievance Redressal Cell is set up by the GST Council to examine the existence of technical difficulties on the common portal. Sufficient guidance is provided in the definition of technical difficulty in Rule 117(1A). Examining the system log to ascertain the existence of technical difficulties on the common portal for registered persons, is not arbitrary, nor does it lead to a fettering of discretion by the authorities - Those registered persons who could not submit the declaration by the due date because of technical difficulties on the common portal as can be evidenced from the system logs are given an extension on the recommendation of the Council. Where no such evidence is forthcoming, no recommendation is made. In the Petitioner’s case, no such proof emerges and, therefore, no direction as sought for can be issued. Petition dismissed.
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