Covid-19 pandemic─Impact on Limitation on Transitional Credit

The Hon’ble Supreme Court took suo motu Cognizance for Extension of Limitation, in the wake of situation coupled with difficulties faced by the litigants across the country, looking to the onset of COVID-19 pandemic and various measures taken by the Govt. to curb COVID-19, from time to time. The theme of the Hon’ble Supreme Court directions issued in their order dated 8.3.2021 :  IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (3) TMI 497 - SC ORDER] centered around to ease the hardship being faced by the citizens of the country.

i) To the utter disregard of the COVID-19 pandemic & interim order passed by the Hon’ble Supreme Court on 23.3.2020, 6.5.2020 & on 10.7.2020: IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 418 - SC ORDER], IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 671 - SC ORDER], IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (1) TMI 261 - SC ORDER]

The Finance Act, 2020 was passed on 27.3.2020 during the lock down period prevailing all over the country.

ii) The CBIC Implemented on 18.5.2020, (during the lock down period) the restriction on time limit for taking Transitional Credit, u/s 140, CGST Act, 2017, the amendments of the Finance Act, 2020 retrospectively, just to plug/annul the relief given by various courts to the taxable persons and also filed SLP in the Supreme Court on 19.6.2020 : UNION OF INDIA VERSUS BRAND EQUITY TREATIES LIMITED AND ORS. ETC. ETC. [2020 (6) TMI 517 - SC ORDER] & obtained Stay against the High Court judgment in the case of BRAND EQUITY TREATIES LIMITED, MICROMAX INFORMATICS LTD., DEVELOPER GROUP INDIA PRIVATE LIMITED, RELIANCE ELEKTRIK WORKS VERSUS THE UNION OF INDIA AND ORS. [2020 (5) TMI 171 - DELHI HIGH COURT], which granted a great relief to various citizens of the country by prescribing the period of limitation of 3 years under the Limitation Act for filing Tran-1 so as to facilitate claiming Transitional Credit as on 30.6.2017, u/s 140, CGST Act, 2017. In the wake of directions issued by the Hon’ble Supreme Court, this period of limitation of 3 years stood extended up to 14.3.2021. 

Such type of non friendly approach of CBIC  & Govt. is deplorable & is against the Final Directions dated 8.3.2021, now issued by the Hon’ble Supreme Court & tantamounts to contempt of court, in case of non extension of limitation in the wake of COVID-19 pandemic.

To honour the Directions dated 8.3.2021 of Hon’ble Supreme Court, the CBIC should amend the date of implementation of amendment carried out retrospectively by the Finance Act, 2020, on 18.5.2020, in respect of the restriction on time limit for taking Transitional Credit, u/s 140,CGST Act, 2017, to afford justice to various citizens of the country. At the same time, the CBIC should withdraw the SLP filed in the Supreme Court on 19.6.2020, looking to the difficulties faced by the various citizens of the country during COVID-19 pandemic, in tune with the directions of the Hon’ble Supreme Court. Otherwise seeking legal remedies in India will become a futile exercise.

Om Prakash Jain s/o J.K.Jain

4 Bha 24 Jawahar Nagar, Jaipur-302004

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