TMI Blog2019 (7) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... R J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Petitioner (s) : MR NARESH THACKER, SENIOR ADVOCATE WITH MR HARDIK P MODH (5344) For The Respondent (s) : None ORAL ORDER ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1 The subject matter of challenge in this writ application is to the constitutional validity of the amendment brought about in Section 140 of the Central Goods and Services Tax Act, 2017 by way of the Central Goods and Services Tax (Amendment) Act, 2018 with effect from the 1st day of July, 2017. The unamended Section 140 of the Act reads as under: Section 140 : Transitional Arrangements for Input Tax Credit. ( 1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed: Provided that the registered person shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used for making taxable supplies under this Act; ( ii) the said registered person is eligible for input tax credit on such inputs under this Act; ( iii) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of such inputs; ( iv) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day; and ( v) the supplier of services is not eligible for any abatement under this Act: Provided that where a registered person, other than a manufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing payment of duty in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed. ( 4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson is eligible for input tax credit on such inputs under this Act; ( iv) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of inputs; and ( v) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day. ( 7) Notwithstanding anything to the contrary contained in this Act, the input tax credit on account of any services received prior to the appointed day by an Input Service Distributor shall be eligible for distribution as credit under this Act even if the invoices relating to such services are received on or after the appointed day. ( 8) Where a registered person having centralised registration under the existing law has obtained a registration under this Act, such person shall be allowed to take, in his electronic credit ledger, credit of the amount of CENVAT credit carried forward in a return, furnished under the existing law by him, in respect of the period ending with the day immediately preceding the appointed day i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y leviable under section 136 of the Finance Act, 2001, in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock on the appointed day. Explanation 2. - For the purposes of subsection (5), the expression eligible duties and taxes means ( i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957; ( ii) the additional duty leviable under subsection (1) of section 3 of the Customs Tariff Act, 1975; ( iii) the additional duty leviable under subsection (5) of section 3 of the Customs Tariff Act, 1975; ( iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise Textile and Textile Articles) Act, 1978; ( v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985; ( vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985; ( vii) the National Calamity Conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of excisable products, which were cleared on the payment of the Central Excise duty under the CGST Act. 4 Mr. Thacker, the learned senior counsel appearing for the writ applicants gave us more than a fair idea about the entire scheme of the Act, more particularly, the availability of the CENVAT credit. Mr. Thacker pointed out that prior to the impugned amendment, the transitional mechanism under Section 140(1) of the CGST Act, inter alia, allowed transition of the CENVAT credit of taxes, duties and cesses levied on the inputs, capital goods and inputs services, which were duly reflected and carried forward in the last return pertaining to the preGST regime. Mr. Thacker pointed out something very relevant and important by showing that the EC and SHEC qualified as CENVAT credit under the credit rules. He further pointed out that since Section 140(1) (prePage amended) referred to CENVAT credit in accordance with the credit rules, the writ applicants were eligible to transition of such credit into the GST regime. Section 140(1), as it stood prior to its amendment, allowed unhindered operation to avail the CENVAT credit until the amendment came into force o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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