Punjab & Haryana HC in the case of Amba Industrial Corporation Versus Union of India

Case Covered:

Amba Industrial Corporation

Versus

Union of India

Facts of the case:

The Petitioner through instant petition is challenging vires of Rule 117(1A) of Central Goods and Service Tax Act, 2017 (for short ‘Rules’) and seeking direction to Respondent to permit Petitioner to electronically upload form TRAN-I or avail input tax credit (for short ‘ITC’) in monthly return GSTR-3B.

The Petitioner-a partnership firm, engaged in the business of trading of S.S. Flats, is registered with Respondent-GST Authorities under Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’). The Petitioner prior to 01.07.2017 i.e. date of introduction of GST was registered under the Central Excise Act, 1944 as a dealer/trader.

The Petitioner purchased S.S. Flats and Scrap on payment of Excise Duty amounting to Rs.10,36,201/-. The Petitioner to carry forward unutilized CENVAT Credit, in terms of Section 140 of the CGST Act read with Rule 117 (1) was required to upload TRAN-I on the official portal of Respondent, however, Petitioner failed to upload TRAN-I by the last date i.e. 27.12.2017.

As per sub-Rule (1A) of Rule 117 of the Rules, the Commissioner on the recommendation of the Council may extend the date for submitting the declaration, in respect of registered persons who could not submit a declaration by the due date on account of technical difficulties.

The Respondents in the exercise of the power conferred by sub-Rule (1A) of Rule 117 of the Rules, by order dated 07.02.2020 (Annexure P-3) has extended date for filing TRAN-I till 31.03.2020.

Observations of the court:

The Petitioner has challenged vires of Rule 117 (1A) of Rules, however, we do not think it appropriate to declare it invalid as we are of the considered opinion that Petitioner is entitled to carry forward Cenvat Credit accrued under Central Excise Act, 1944.

The Respondents have repeatedly extended the date to file TRAN-I where there was a technical glitch as per their understanding. Repeated extensions of the last date to file TRAN-I in case of technical glitches as understood by Respondent vindicate the claim of the Petitioner, that denial of unutilized credit to those dealers who are unable to furnish evidence of an attempt to upload TRAN-I would amount to a violation of Article 14 as well Article 300A of the Constitution of India.

The judgement of the court:

In view of the decision of this Court in the case of Adfert Technologies Pvt. Ltd. (Supra) and Delhi High Court in the case of Brand Equity Treaties Ltd. (Supra) present petition deserves to be allowed and accordingly allowed.

The Respondents are directed to permit Petitioner to upload TRAN-I on or before 30.06.2020 and in case Respondent fails to do so, the Petitioner would be at liberty to avail ITC in question in GSTR-3B of July 2020.

No doubt, the respondents would be at liberty to verify the genuineness of claim(s) made by the Petitioner.

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