2020 (9) TMI 161 - HC - GST

Rajasthan High Court upholds Rule 117 of CGST Rules, grants liberty to seek GST Council recommendations

The High Court of Rajasthan addressed civil writ petitions concerning the filing of Form TRAN-1 for Transitional Credit under the CGST Act and the ... Permission to file Form TRAN-1 - transitional credit - validity of Rule 117 of the CGST Rules - HELD THAT:- Issue decided in the case of OBELISK COMPOSITE TECHNOLOGY LLP, VERSUS UNION OF INDIA, THE SECRETARY TO THE GOVT. OF INDIA, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE [2019 (12) TMI 1162 - RAJASTHAN HIGH COURT] where it was held that considering the fact that the Union of India and the Finance Department have extended the period contemplated under Rule 1A of Rule 117 till 31st December, 2019, we grant liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith. Accordingly, liberty is granted to the petitioner to make an application before GST Council through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner’s assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit within the stipulated time as stipulated by the Union of India. Petition disposed off. Issues:1. Petitioners seeking permission to file Form TRAN-1 under CGST Act for Transitional Credit.2. Challenge to the validity of Rule 117 of the CGST Rules.Analysis:The High Court of Rajasthan heard multiple civil writ petitions where petitioners requested permission to file Form TRAN-1 under the Central Goods and Services Tax Act, 2017, to avail Transitional Credit in Electronic Credit Ledger. They also sought the effectuation of manually submitted Form GST Tran-1 for claiming Legitimate Input Tax Credit. Some petitions challenged the validity of Rule 117 of the CGST Rules. The Court noted a similar judgment in Obelisk Composite Technology LLP case, where similar prayers were made. The Court referred to the decision in Obelisk Composite Technology LLP, where the petitioners sought a writ of mandamus to allow filing of declaration in Form GST Trans-1 to claim transition credit and to declare Rule 117 of the CGST Rules as violative of Constitutional provisions. The Court rejected the challenge to the constitutional validity of Rule 117, citing previous judgments, and granted liberty to make an application before the GST Council for necessary recommendations.The Court observed that the controversy in the present writ petitions was akin to that in Obelisk Composite Technology LLP case and decided to dispose of the petitions in alignment with the previous judgment. Consequently, the petitioners were permitted to apply before the GST Council through Standing Counsel for requisite recommendations, which would enable them to benefit from CENVAT credit within the stipulated time frame set by the Union of India. The Court disposed of the writ petitions with the aforementioned directions and also cleared all pending applications related to the matter.In conclusion, the High Court of Rajasthan, in a series of civil writ petitions, addressed the issue of allowing petitioners to file Form TRAN-1 for Transitional Credit under the CGST Act and the challenge to the validity of Rule 117 of the CGST Rules. The Court referred to a previous judgment, granted liberty to petitioners to seek recommendations from the GST Council, and disposed of the petitions in line with the decision in Obelisk Composite Technology LLP case.