TMI Blog2019 (11) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... s of claim of Petitioners but nobody shall be denied to carry forward legitimate claim of CENVAT / ITC on the ground of non-filing of TRAN-I by 27.12.2017. Petition allowed. - CWP No. 30949 of 2018(O&M) - - - Dated:- 4-11-2019 - JUSTICE JASWANT SINGH AND JUSTICE LALIT BATRA, JJ. For The Petitioners (s) : Mr. Jagmohan Bansal, Advocate, Mr. Sandeep Goyal, Advocate, Mr. Rishabh Singla, Advocate, Mr. Sanjay Bansal, Senior Advocate, Mr. Amit Parsad, Advocate, Mr. Surjeet Badhu, Advocate, Mr. Veer Singh, Advocate, Mr. Alok Mittal, Advocate, Mr. Suresh Kumar Yadav, Advocate, Mr. Amar Pratap Singh, Advocate, Mr. Rohit Gupta, Advocate, Mr. Mavpreet Singh, Advocate, Mr. Aman Bansal, Advocate, Mr. Rajiv Sharma, Advocate with Mr. Nikhil Sharma, Advocate, Ms. Anita Kumari, Advocate for Mr. Rose Gupta, Advocate, Mr. J.S. Bedi, Advocate. Mr. Balwinder Singh, Advocate, Ms. Pridhi Jaswinder Sandhu, Advocate and Ms. Niharika Gupta, Advocate , Ms. Rimika Khera, Advocate, Mr. Rakesh Sobti, Advocate, Mr. Dixit Garg, Advocate, Mr. Shashank Shekhar, Advocate with Mr. Arjyajeep Roy, Advocate Mr. Arjun Sheoran, Advocate, Mr. Monish Panda, Advocate and Mr. Mrinal Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit, however under Rule 117 of the CGST Rules, 2017 period of 90 days from appointed day i.e. 1.7.2017 was prescribed which was extended from time to time and ultimately last date was fixed 27.12.2017. Due to one or another reason, Petitioners either could not load prescribed form electronically or incorrect form was loaded which could not be corrected within prescribed time. In this backdrop all the Petitions have come up for consideration before us. 3 . To sum up, on the introduction of GST w.e.f. 1.7.2017, Petitioners migrated from VAT regime to GST regime. As per Section 140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017, every registered person was required to file electronically FORM GST TRAN-1 with respect to unutilized input tax credit of duties and taxes paid under erstwhile tax regime. As per Rule 120A of the CGST Rules, 2017 registered person may revise his declaration once and submit revised declaration within the time period specified in Rule 117, 118, 119 and 120 of CGST Rules, 2017. 4 . From the perusal of record and arguments of counsel for both sides, we find that there are two types ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rry forward less amount of credit. The Petitioners in alternative contended that no Section or Rule of CGST Act, 2017 provides that unutilized ITC would lapse, if TRAN-I is not filed by due date thus, refund in cash may be sanctioned in terms of proviso to Section 142(3) of CGST Act, 2017 if it is held that Petitioners are not entitled to carry forward ITC because they failed to file TRAN-I by 27.12.2017. 6 . Counsel for the Respondent contended that Government time to time extended period to load TRAN-I and it was mistake on the part of Petitioners who did not attempt to load by 27.12.2017. Government has permitted all those registered persons to file TRAN-I by 31.03.2019 who furnished evidence of attempt to load TRAN-I upto 27.12.2017. There would be no end if Petitioners are permitted to load TRAN-I at this stage. The Petitioners cannot take excuse of technical glitches because they did not attempt to load TRAN-I by 27.12.2019. Hon ble Gujrat High Court in the case of Willowood Chemicals Pvt. Ltd. Vs. Union of India 2018(19) G.S.T.L. 228 (Guj. ) has upheld vires of Rule 117 of CGST Rules, 2017 and present Petitioners are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this sub-section, the expression unavailed CENVAT credit means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law. ( 3) A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No. 26/2012-Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely: ( i) such inputs or goods are used or intended to be used for making taxable supplies under this Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the same was recorded in the books of account of such person within a period of thirty days from the appointed day: Provided that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days: Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub-section. ( 6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely: ( i) such inputs or goods are used or intended to be used for making taxable supplies under this Act; ( ii) the said registered person is not paying tax under section 10; ( iii) the said registered person is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted day. ( 10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in such manner as may be prescribed. Explanation 1.- For the purposes of sub-sections (3), (4) and (6), the expression eligible duties 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 sub-section (1) of section 3 of the Customs Tariff Act, 1975 (58 of 1957); ( iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975); ( iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978); ( v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); ( vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985 ( 5 of 1986); and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ( 2) (a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act; ( b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act: Provided that the registered person shall be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of subsection (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act: Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act; ( b) every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act. ( 7) (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble or any amount of CENVAT credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act; ( b) where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said law other than the provisions of subsection (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act. ( 10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit , first stage dealer , second stage dealer , or manufacture shall have the same meaning as respectively assigned to them in the Central Excise Act, 1944 or the rules made thereunder. SECTION 16. Eligibility and conditions for taking input tax credit. - ( 1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person. ( 2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, - ( a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; ( b) he has received the goods or services or both. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. Provided that the registered person shall be entitled to take input tax credit after the due date of furnishing of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019. Rule 117. Tax or duty credit forward under any existing law or on goods held in stock on the appointed day. ( 1) Every registered person entitled to take credit of input ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the invoice by the supplier or any document on the basis of which credit of input tax was admissible under the existing law; ( ii) the description and value of the goods or services; ( iii) the quantity in case of goods and the unit or unit quantity code thereof; ( iv) the amount of eligible taxes and duties or, as the case may be, the value added tax or entry tax charged by the supplier in respect of the goods or services; and ( v) the date on which the receipt of goods or services is entered in the books of account of the recipient. ( 3) The amount of credit specified in the application in FORM GST TRAN-1 shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the common portal. (4)(a)(i) A registered person who was not registered under the existing law shall, in accordance with the proviso to sub-section (3) of section 140, be allowed to avail of input tax credit on goods (on which the duty of central excise or, as the case may be, additional duties of customs under sub-section (1) of section 3 of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vised declaration in FORM GST TRAN- 1electronically on the common portal within the time period specified in the said rules or such further period as may be extended by the Commissioner in this behalf . Emphasis Supplied 8 . From the conjoint reading of above quoted provisions, we find that: i) A registered person to carry forward or avail credit of duty / tax paid on inputs and capital goods under old taxation statutes was required to file TRAN-I; ii) Certain restrictions are prescribed in proviso to Section 140(1) but restriction in terms of time frame is prescribed under Rule 117 (1) of the Rules; iii) As per Rule 117 (1), TRAN-1 was required to be filed by due date which was declared 27.12.2017. There is no power under Rule 117 (1) to extend last date beyond 27.12.2017, however Rule 117(1A) was inserted w.e.f. 10.9.2018 by which last date was extended upto 31.12.2019. iv) The last date i.e. 27.12.2017 prescribed under Rule 117(1) was extended upto 31.12.2019 where TRAN-I could not be filed due to technical glitches. In other words a registered person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Officer 2019-TIOL-2068-HC-AHM-GST has dealt with issue involved at length. It has been held that denial of credit of tax/duty paid under existing Acts would amount to violation of Article 14 and 300A of Constitution of India. Unutilized credit has been recognized as vested right and property in terms of Article 300A of the Constitution of India. We deem it appropriate to reproduce relevant extracts as below: 33. In our opinion, it is arbitrary, irrational and unreasonable to discriminate in terms of the time-limit to allow the availment of the input tax credit with respect to the purchase of goods and services made in the pre-GST regime and post-GST regime and, therefore, it is violative of Article 14 of the Constitution. 34. Section 16 of the CGST Act allows the entitlement to take input tax credit in respect of the post-GST purchase of goods or services within return to be filed under Section 39 for the month of September following the end of financial year to such purchase or furnishing of the relevant annual return, whichever is earlier. Whereas, Rule 117 allows time-limit only up to 27th December 2017 to claim transitional cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) that that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action. It was for the first time in E. P. Ayyappa v. State of Tamil Nadu, (1974) 2 SCR 348 : (AIR 1974 SC 555), that this Court laid bare a new dimension of Article 14 and pointed out that that Article has highly activist magnitude and it embodies a guarantee against arbitrariness. This Court speaking through one of us (Bhatgwati, J.) said: The basic principle which therefore informs both Articles 14 and 16 is equality and inhibition against discrimination. Now what is the content and reach of this great equalising principle? It is a founding faith, to use the words of Bose, J., a way of life , and it must not be subjected to a narrow pedantic or lexicographic approach. We cannot countenance any attempt to truncate its all-embracing scope and meaning, for to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be cribbed, cabined and confined within traditional and doctrinaire limits. From a positivistic point of view equality is antithetic to arbitr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... phrase of Article 14 nor is it the objective and end of that Article. It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and therefore constituting denial of equality. If the classification is not reasonable and does not satisfy the two conditions referred to above, the impugned legislative or executive action would plainly be arbitrary and the guarantee of equality under Article 14 would be breached. Wherever therefore there is arbitrariness in State action whether it be of the legislature or of the executive or of an authority under Article 12, Art. 14 immediately springs into action and strikes down such State action. In fact, the concept of reasonableness and non-arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution. 36. It is legitimate for a going concern to expect that it will be allowed to carry forward and utilise the CENVAT credit after satisfying all the conditions as mentioned in the Central Excise Law and, therefore, disallowing such vested right is offensive against Article 14 of the Constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation is not fulfilled by taking a particular decision then the decisionmaker should justify the denial of such expectation by showing some overriding public interest. (See : Union of India and Ors. v. Hindustan Development Corporation and Ors., AIR 1994 SC 988) 9. While the discretion to change the policy in exercise of the executive power, when not trammeled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heartbeat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for discernible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son. other than manufacturer or service provider, may have a duty paid goods in his stock on 1st July 2017. GST would be payable on all supplies of goods or services made after the appointed day. It is not the intention of the Government to collect tax twice on the same goods. Hence, in such cases, it has been provided that the credit of the duty/tax paid earlier would be admissible as credit. 42. Article 300A provides that no person shall be deprived of property saved by authority of law. While right to the property is no longer a fundamental right but it is still a constitutional right. CENVAT credit earned under the erstwhile Central Excise Law is the property of the writapplicants and it cannot be appropriated for merely failing to file a declaration in the absence of Law in this respect. It could have been appropriated by the government by providing for the same in the CGST Act but it cannot be taken away by virtue of merely framing Rules in this regard. 43. In the result, all the four writ-applications succeed and are hereby allowed. The respondents are directed to permit the writ applicants to allow filing of declaration in form GST TRAN ..... X X X X Extracts X X X X X X X X Extracts X X X X
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