Court directs respondents to facilitate Form TRAN-1 filing by June 30, 2020, upholding taxpayers' vested input tax credit rights.

The court allowed the petitions, directing the respondents to enable the petitioners to file Form TRAN-1 electronically or manually by 30th June 2020. The court also directed the respondents to publicize the judgment widely to allow other similarly situated taxpayers to avail the benefit. The court reiterated that the right to input tax credit is a vested right and procedural rules should not deprive taxpayers of this right. The judgment emphasized a fair and reasonable approach in transitioning to the GST regime, considering the technical and procedural challenges faced by taxpayers.

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Issues Involved:
1. Whether the petitioners are entitled to avail input tax credit by filing Form TRAN-1 beyond the stipulated period under the CGST Rules.
2. The validity and constitutionality of Rule 117 of the CGST Rules imposing a time limit for carrying forward the CENVAT credit.
3. Whether the delay in filing Form TRAN-1 was due to technical glitches or other reasons.
4. Whether the right to input tax credit is a vested right and protected under Article 300A of the Constitution.

Issue-Wise Detailed Analysis:

1. Entitlement to Avail Input Tax Credit by Filing Form TRAN-1 Beyond the Stipulated Period:
The petitioners sought relief to file Form TRAN-1 beyond the period provided under the CGST Rules to avail input tax credit of accumulated CENVAT credit as of 30th June 2017. The court noted that it had allowed numerous similar petitions in the past, where delays were attributed to technical glitches. Despite the respondents' objections that the delays in these cases were not due to technical glitches, the court found no significant difference in circumstances compared to previously decided cases. The court concluded that the petitioners should be given another opportunity to file their TRAN-1 forms belatedly.

2. Validity and Constitutionality of Rule 117 of the CGST Rules:
Petitioners challenged Rule 117 of the CGST Rules as arbitrary, unconstitutional, and violative of Article 14 to the extent it imposes a time limit for carrying forward the CENVAT credit. The court observed that the CGST Act does not prescribe a time limit for transitioning CENVAT credit, and the time limit under Rule 117 is procedural and directory, not mandatory. The court held that the period of 90 days prescribed by Rule 117 has no rationale and is arbitrary. The court read down Rule 117 to be directory in nature, allowing a period of three years from the appointed date for availing such credit.

3. Delay Due to Technical Glitches or Other Reasons:
The respondents argued that the delays in filing Form TRAN-1 were due to the petitioners' own technical difficulties and not glitches in the GSTN. The court acknowledged that the GST system was in a nascent "trial and error" phase and faced several shortcomings and inadequacies. The court noted that taxpayers, including the petitioners, faced various technical difficulties, including low bandwidth and lack of computer skills. The court emphasized that "technical difficulty" should not be narrowly interpreted and includes difficulties faced by taxpayers as well.

4. Right to Input Tax Credit as a Vested Right:
Petitioners argued that the accumulated CENVAT credit represents their property and a vested right, constitutionally protected under Article 300A. The court agreed, stating that the credit standing in favor of an assessee is "property" and cannot be taken away without authority of law. The court emphasized that the right to carry forward CENVAT credit is a substantive right and cannot be curtailed by procedural rules. The court held that the time limit for filing TRAN-1 should not result in forfeiture of this vested right.

Conclusion:
The court allowed the petitions, directing the respondents to enable the petitioners to file Form TRAN-1 electronically or manually by 30th June 2020. The court also directed the respondents to publicize the judgment widely to allow other similarly situated taxpayers to avail the benefit. The court reiterated that the right to input tax credit is a vested right and procedural rules should not deprive taxpayers of this right. The judgment emphasized a fair and reasonable approach in transitioning to the GST regime, considering the technical and procedural challenges faced by taxpayers.

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