TaxTMI 
TaxTMI 
Writ petitions filed in various High Court(s) related to transitional provisions in GST
X X X X Extracts X X X X
X X X X Extracts X X X X
....licy issues or questions of law challenged in the said Writ petitions for filing counter affidavit in the matter. In all these cases, the petitioners, time and again, challenge the transitional provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act, 2017) and rules made thereunder. 2. The issues raised in most of such writ petitions/PILs/Appeals are similar in nature. However, inputs/ comments on the policy issues/questions of law have to be provided to the field formations by the Policy Wing separately in each such reference from the filed formations. This not only requires duplication of efforts of the Policy Wing, but also may result in undue delay in filing appropriate reply/counter affidavit in the Courts by the field formations. 3. For ease of reference and in order to ensure that no such separate references are required to be made by the field formations to Policy Wing of CBIC seeking inputs/ comments on policy matters in the writ petitions / PILs / appeals filed on issues pertaining to transitional credit, including issues related to non-filing of TRAN-1/ TRAN-2 by due date and other related issues, a list of pol icy issues / q....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed that credit can be availed only to the extent allowed by law and reasonable restrictions on availing credit can be imposed. The contention of the petitioner that CENVAT Credit / Input Tax Credit are absolute / vested rights is fundamentally flawed, legally erroneous and ex-facie contrary to the law laid down by the Hon'ble Supreme Court in at least three (03) judgments which are detailed as below,- (i) In the case of Osram Surya Pvt. Ltd. vs. Commissioner of Central Excise, Indore, (2002) 9 SCC 20 the Hon'ble Supreme Court has held that a rule fixing a time limit for exercise of a right does not take amount to taking away any vested right. The Hon'ble Supreme Court held that: - "... in the instant case by the introduction of the second proviso to Rule 57G, the credit in the account of a manufacturer was not taken away but only the manner and the time within which the said credit was to be taken or utilized alone was stipulated. It is to be noted at this juncture that the substantive right has not been taken away by the introduction of the proviso to the Rule in question but a procedural restriction was introduced which, in our opinion, is permissible in law." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shed by him under the existing law within such time and in such manner as maybe prescribed. The exercise or availing of the right of carrying forward of CENVAT credit in the plenary provision itself has been made subject to "such manner as maybe prescribed". Therefore, when Rule 117 lays down the time and manner in which such right can be exercised, it can neither be said that the Act did not envisage the time and manner in which CENVAT credit can be availed and nor can it be said that such Rule in any manner was in exercise of excessive delegation. As discussed above, the Hon'ble Supreme Court has held that the manner in which a right can be exercised cannot mean that such a right is taken away. It is well-settled that when a statute provides for a manner to do something, it can be done only in that manner or not done at all. Therefore, when Rule 117 of CGST Rules is the law prescribing the manner in which transitional credit can be availed of, then it can be so availed only in such manner prescribed and the provision and its rigours cannot be circumvented by referring to such a provision as directory. [Mackinnon Mackenzie & Co. Ltd. v. Mackinno....
X X X X Extracts X X X X
X X X X Extracts X X X X
....State of Maharashtra but are despatched to out-State branches and agents and sold there, no sales tax can be or is levied by the State of Maharashtra. The State of Maharashtra gets nothing in respect of such sales effected outside the State. In respect of such sales, the rule-making authority could well have denied the benefit of set-off. But it chose to be generous andhas extended the said benefit to such out-State sales as well, subject, however to deduction of one per cent of the sale price of such goods sent out of the State and sold there. We fail to understand how a valid grievance can be made in respect of such deduction when the very extension of the benefit of set-off is itself a boon or a concession. It was open to the rule-making authority to provide for a small abridgement or curtailment while extending a concession. Viewed from this angle, the argument that providing for such deduction amounts to levy of tax either on purchases of raw material effected outside the State or on sale of manufactured goods effected outside the State of Maharashtra appears to be beside the point and is unacceptable. So is the argument about apportioning the sale-price with reference t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndigarh vs. M/s Doaba Cooperative Sugar Mills Ltd. Jalandhar (1988 (37) ELT 478) it was inter alia laid down by the Hon'ble Supreme Court that: "But in making claims for refund before the departmental authority, an assesse is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed there under must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail" (iv) The Hon'ble High Court of Rajasthan in the case of Shree Motors vs. Union of India (2020) SCCOnline Raj 381, while considering the case of persons who claimed that they were unable to submit the TRAN- 1 Form within the prescribed time-limit on account of technical glitches, but were unable to tender any evidence to substantiate the said claim, held: "33. The theory of vested rights and the implication of limitation on the said aspect of vested right has been considered by Hon'ble Supreme Court in the case of Osram Surya (P) Ltd. (supra), wherein, while considering th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case of U.O.I & Anr. Kirloskar Pneumatic Co. Ltd. (1996 SCC (4) 453) while considering the question of limitation provided under the Customs Act, it was inter alia held that it is not permissible for the High Court to direct the authorities under the said Act to act contrary to the aforesaid statutory provisions. The power conferred under Article 226/227 of the Constitution of India is designed to effectuate the law, to enforce the rule of law and to ensure that the several authorities and organs of the State act in accordance with law. It cannot be invoked for directing the authorities to act contrary to law. (G) From above, it is clear that a taxpayer cannot claim input credit of the duty or tax paid as a vested right under GST and input credit is in the form of a concession / benefit and reasonable restrictions on availing such credit can be imposed. Thus, a taxpayer cannot claim credit accumulated under the erstwhile taxation regime (Central Excise and Service Tax) as a vested right for transition under GST. Provisions have been made under section 140 of the CGST for transition of credit for different class of tax payers and restrictions, if any, placed on a particular clas....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1999 which were enacted to validate sub-rule (4A) of Rule 57F of the Central Excise Rules, 1944. Sub-rule (4A) of Rule 57F of the Central Excise Rules, 1944 provided for the lapsing of MODVAT credits lying unutilized as on 16.03.1995. The said sub-rule was challenged before this Hon'ble Court in the case of Eicher Motors Pvt. Ltd. vs. Union of India 1999 (106) ELT 3. In its Judgment, this Court had inter-alia held sub-rule (4A) of Rule 57F of the Central Excise Rules, 1944 to be beyond the Rule-making powers of the Central Government. Subsequently, in order to overcome the aforesaid decision of this Hon'ble Court in Eicher Motors (supra), the impugned sections were enacted adding sub-clause (xxviii) to Sub-section (2) of Section 37 of the Central Excise Act, 1944 empowering the Central Government to prescribe Rules to provide for the lapsing of credit of duty lying unutilized. Further, an express provision validating sub-rule (4A) of Rule 56F was enacted. The Hon'ble High Court in SML Isuzu (supra) was considering the validity of these amendments that were brought about to overcome the effect of the Judgment in Eicher Motors (supra). Upholding these provisions, it was held by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....changed the entire basis or foundation of the judgment rendered in Eicher Motors Ltd. Case (supra) which was well within the legislative competence of the Parliament. In other words, sections 131 and 132 of the Finance Act have removed the illegality pointed out by the Supreme Court in the case of Eicher Motors Ltd. (supra), wherein the foundation on which the decision was based, has been fundamentally altered by the said provision. The Parliament, inter alia; validated clause (e) of sub-rule (17) of rule 57 of the said Rules with retrospective effect. 33. It is no doubt true that in Eicher Motors Ltd. (supra) the Apex Court ruled that the modvat credit standing to the credit of the assessee on 31 st September, 1997 was a vested right; which was accrued in favour of the petitioner or, at any rate, it was an existing right. It is a settled principle of interpretation of statues that a vested right or even an existing right, including a right of action is not affected or allowed to be taken away unless it is so affected or taken away by the enactment expressly or by necessary implication. It is no doubt true that a declaratory or a procedural enactment which is, normally, he....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., besides other things, for every dealer entitled to take credit of input tax under Section 140 of CGST Act, 2017.Therefore, when Rule 117 lays down the manner in which such Right can be prescribed, it cannot be said that such Rule in any manner was an excessive delegation (L) In this regard, the Hon'ble High Court of Bombay has traced the rule making power for prescribing the deadline under Rule 117 to Section 164 of the CGST Act, 2017, in the case of M/s Nelco Ltd. (supra), wherein the Hon'ble High Court held: "47. Thus, the time limit in Rule 117(1) is traceable to the rule-making power conferred in Section 164(2). The credit envisaged under Section 140(1) being a concession, it can be regulated by placing a time limit. Therefore, the time limit under Rule 117(1) is not ultra-vires of the Act." The Hon'ble High Court of Gujarat has also so traced the rule making power for prescribing the deadline under Rule 117 to Section 164 of the CGST Act, 2017 in the case of Willowood Chemicals Pvt. Ltd. vs. Union of India &Ors., SCA No. 4252 of 2018, wherein the Hon'ble High Court held: "26. Section 140 of the CGST Act, which is a transitional provision, essentially ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al, administrative or other considerations. The court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fix the cut-off date. The Government must be left with some leeway and free play at the joints in this connection. 8. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut-off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter-affidavit filed by the Government (unless it is shown to be totally capricious or whimsical), vide State of Bihar v. Ramjee Prasad [(1990) 3 SCC 368 : 1991 SCC (L&S) 51] , Union of India v. Sudhir Kumar Jaiswal [(1994) 4 SCC 212 :1994 SCC (L&S) 925:(1994) 27 ATC 561] (vide SCC para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn.[(2004) 2 SCC 76: 2004 SCC (L&S) 337] (videSCCpara31),University Grants Commission v. Sadhana Chaudhary [(1996) 10 SCC 536 : 1996 SCC (L&S) 1431] , etc. It follows, therefore, that even if no reason has been given in the counter-affidavit of the Government or the executive authority as to why a particular cut-off date has been chosen, the court must still not declare t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or example, Press release dated 12.01.2017 was issued to give publicity regarding last dates for filing and revision. (O) Further, it is noteworthy that prescription of time-limits for availment of input credits is consistent with the Scheme of the CGST Act, 2017. It is not only for the carrying forward of the CENVAT Credits that a deadline has been prescribed. To illustrate, Section 16(4) of the CGST Act, 2017 reads as follows: "(4) A registered person shall not be entitled to take input tax credit in respect of any invoice 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." (P). The deadline prescribed under Rule 117 has been upheld by the Hon'ble High Court of Bombay in the case of Nelco (supra). The Hon'ble High Courtheld: "53. We do not find that the time limit in the impugned rule is arbitrary or unreasonable. To plan to allocate resources, it is necessary to know the amount of taxes availa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibed under any statute, and the same is not followed, then the action suffers from nullity in the eye of the law, the relevant paragraphs of the above said case are extracted hereunder: (SCC pp. 432-33, paras 31-32) "31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor [(1875) LR 1 Ch D 426] which was followed by Lord Roche in Nazir Ahmad v. King Emperor[(1935-36)63 IA 372:(1936) 44 LW 583 :AIR 1936 PC 253 (2)] who stated as under: (Nazir Ahmad case [(1935-36) 63 IA 372: (1936) 44 LW 583 : AIR 1936 PC 253 (2)] , IA pp. 381-82) '... where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all.'" (S) The Hon'ble High Court of Chhattisgarh in the case of M/s Jagadamba Hardware Stores vs. Union of India &Ors., WP(T) No. 31 of 2020, treated the time-limit under Rule 117 to be mandatory and refused to grant relief to the Petitioner therein and direct the authorities to permit the belated submission of the TRAN- 1 Form by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that: "5. A conjoint reading of the above two rules clearly reveals that every registered person who has submitted a declaration electronically in FORM G.S.T.T.R.A.N-1 within the period specified in Rule 117 or Rule 118 or Rule 119 or Rule 120 is allowed to revise such declaration once and submit the revised declaration in FORM G.S.T. T.R.A.N -1 electronically on the common portal, "within the period specified in the said rules or such further period as may be extended by the Commissioner in this behalf." This further period - as may be extended by the Commissioner-which is provided under Rule 120-A, therefore, cannot go beyond the time-frame provided under Rule 117 of the Uttar Pradesh Goods & Services Tax Rules, 2017. The period of extension has been statutorily circumscribed at 90 days and that too is possible only on the recommendation of the Council." IV. SUB-RULE (1A) OF RULE 117 OF CGST RULES, 2017 CANNOT BE TERMED AS ARBITRARY OR VAGUE AND IS WELL WITHIN THE FOUR CORNERS OF THE STATUE (U). It is contended that the root cause for various taxpayers not being able to file FORM TRAN-1 is the failure of the network to work seamlessly is erroneous for the reason th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AN 2 by a further period not beyond 31.03.2020 and 30.04.2020 respectively in such cases. The list of notifications w.r.t extension of last dates for filing FORM TRAN 1 and TRAN 2, under sub - rule 117(1A), is as below,- Not. No. Date Last date for filing Condition TRAN 1 TRAN 2 48/2018- CT 10.09.18 31.03.19 30.04.19 In respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension. 49/2019- CT 09.10.19 31.12.19 31.01.20 02/2020 - CT 01.01.20 31.03.20 30.04.20 Besides, GST Council in its 32nd Meeting held on 10th January 2019, decided to enhance the scope of ITGRC to include non-technical TRAN-1 cases(errors apparent on the face of record) also covered by the order of Hon'ble High Court of Madras and any other Hon'ble High Court, sent by State or Central Authority, to the GST Council Secretariat by 31st January 2019, subject to the following conditions: (i) TRAN-1, including revision thereof, has been filed on or before 27th December, 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich arise at the common portal of GST. 68. The IT Grievance Redressal Cell has taken the system log on the common portal as evidence of attempts made. There is no merit in the criticism of the Petitioner in taking system logs as a basis for determining technical difficulties. Since Rule 117(1A) refers only to the technical difficulties on the common portal, the record on the common portal would be a material piece of evidence. Since the phrase "technical difficulty" does not envisage any other difficulties, the IT Grievance Redressal Committee rightly evolved the criteria of system logs. The system log is an auto-generated data which records the activities performed. A system log maintained by the portal shows details of requests made at the page. This data is not manually collected but auto-generated. From the system log, it can be ascertained whether an attempt was made to access the data. Therefore, not only there is nothing arbitrary insisting on system log but a correct criterion to be adopted. 69. Petitioner then contended that insisting on system log as proof from the very system which has technical difficulties, is arbitrary and unworkable. There is no me....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... from a rural and semiliterate background and they may have no record, and they can not be made to suffer when the systems of the Respondents were not efficient. This approach proceeds on the basis that once there is an acknowledgment of technical difficulties, a liberal view must be taken. However, though the Respondents have accepted there have been technical difficulties, they have not admitted a complete failure. A mechanism has been set up. A uniform and technically capable criteria to determine technical difficulties on the portal of system logs has been evolved. There is no allegation, nor there is any question of any personal malafides while ascertaining the system logs. The system logs are generated automatically and based on such system logs categorization has been made. 73. The input tax credit in the transitional provision is a concession to be utilised in a time-bound manner, and further extension is given if the GST Council finds that there was a technical difficulty at its end. If there is no technical difficulty on the common portal for the registered user, this additional concession is not extended. Whether to grant further concession as Rule 117(1A) will ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of M/s Brand Equity Treaties Limited vs UOI [W.P. (C) 11040/2018 and C.M. No. 42982/2018] and other petitioners, the Hon'ble Delhi High Court held that period of 90 days for claiming input tax credit in TRAN-1 is directory and therefore, period of limitation of 3 years under the Limitation Act would apply. The Court had directed the Department to allow all assessee to claim input tax credit in TRAN-1 by 30.6.2020. Court further said that the direction would apply to all those who could not file TRAN-1 and claim input tax credit. The court further directed that it should be advertised that all taxpayers who have not filed TRAN 1 can do so by 30.6.2020. However, SLP against the said order was filed by the Department before Hon'ble Supreme Court and Hon'ble Supreme Court vide order dated 19.06.2020 in SLP(C) stayed the operation of the said order. VI. CONCLUSION (Z) It is clear from the above discussions that the Government cannot be held responsible for negligence and dereliction of duty by a responsible taxpayer. Thus, Rule 117 and Rule 120 A of CGST Rules, 2017, prescribing time limit, are well within the ambit of Section 140 of the CGST Act, 2017 and nowhere goes beyond ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "(I) Every registered person entitled to take credit of input tax under section 140 shall, within ninety days of the appointed day, submit a declaration electronically in FORM GST TRAN-I, duly signed, on the common portal specifying therein, separately, the amount of input tax credit to which he is entitled under the provisions of the said section: ..." 6.9.2 To clarify that there will be no transition of credit of various cesses in GST, it is proposed to add 'of eligible duties and taxes, as defined in Explanation 2 to section 140′ since cesses are not covered in the definition of eligible duties and taxes' This will also ensure that it applies uniformly to transition of all credits. The amended sub-rule (1) shall read as: "(I) Every registered person entitled to take credit of input tax under section I40 shall, within ninety days of the appointed day, submit a declaration electronically in FORM GST TRAN-I, duly signed, on the common portal specifying therein, separately, the amount of input tax credit of eligible duties and taxes, as defined in Explanation 2 to section 140, to which he is entitled under the provisions of the said section:" The Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gly, the said Circular only clarifies the position of the law and is well within the four corners of the CGST Act. (G) Further, judgment of Delhi High Court in the case of Cellular Operators Association of India (supra) may also be referred. In the said case, the association had filed a writ petition for direction that credit accumulated on account of Education Cess and Secondary & Higher Education Cess should be allowed to be utilized for the payment of service tax/ excise liability. Under the CENVAT Credit Rules, 2004 credit of EC & SHE could be utilized for payment of EC & SHE respectively. The cross utilization of EC & SHE towards excise duty or service tax was impermissible and not permitted. Later on, EC & SHE were abolished from 01.03.2015. The appellant claimed that they have a vested right to claim benefit of any unutilized amount of EC & SHE. It was also the contention that EC & SHE were subsumed in the Central Excise Duty and therefore the amount lying in credit towards EC & SHE should be allowed for availing CENVAT Credit as both became a part of excise duty or service tax. It was observed by Delhi High Court that "It is no doubt that the two cesses, in the present c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id credit was to be taken or utilized alone was stipulated. It is to be noted at this juncture that the substantive right has not been taken away by the introduction of the proviso to the Rule in question but a procedural restriction was introduced which, in our opinion, is permissible in law." (ii) Similarly, Hon'ble Supreme Court in the case of ALD Automotive (P) Ltd. v. CTO, (2019) 13 SCC 225: 2018 SCC OnLine SC 1945 at page 242, has held that "input credit is in the nature of benefit/concession extended to the dealer under the statutory scheme. The concession can be received by the beneficiary only as per the scheme of thestatute." (iii) The same view has been reiterated by the Hon'ble Supreme Court in the decision of of Jayam & Co. v. Commr., (2016) 15 SCC 125: 2016 SCC OnLine SC 909 at page 134 wherein it was held as follows: "(a) ITC is a form of concession provided by the legislature. It is not admissible to all kinds of sales and certain specified sales are specifically excluded. (b) Concession of ITC is available on certain conditions mentioned in this section. (c) One of the most important condition is that in order to enab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in making claims for refund before the departmental authority, an assesse is bound within four corners of the Statute and the period of limitation prescribed in the Central Excise Act and the Rules framed there under must be adhered to. The authorities functioning under the Act are bound by the provisions of the Act. If the proceedings are taken under the Act by the department, the provisions of limitation prescribed in the Act will prevail" (iv). Similar stand is taken by the Hon'ble High Court of Bombay in the case of M/s JCB India Limited vs. Union of India [in W.P. No. 3142 of 2017 & other similar writ petitions], where the Court in its judgment dated 19-20.03.2018 held that,- "56. ...... CENVAT credit is a mere concession and it cannot be claimed as a matter of right and it cannot be claimed as a matter of right. If the CENVAT Credit Rules under the existing legislation themselves stipulate and provide for conditions for availment of that credit, then, that credit on inputs under the existing law it self is not an absolute but are stricted or conditional right. It is subject to fulfillment or satisfaction of certain requirements and conditions that the right ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....regard, the case laws of Federation of Hotel and Restaurant Association of India etc. Vs. Union of India & others, reported in 1988 AIR 1291 and Union of India vs Nitdip Textile Processors Pvt Ltd, reported in 2011 (273) ELT 321 may be referred. Further, in the cases of E.P. Royappa Vs State of Tamil Nadu, reported in AIR 1974 SC 555 and Maneka Gandhi Vs Union of India, reported in AIR 1978 SC 597, the Hon'ble Apex Court highlights that Article 14 strikes at arbitrariness in State action and ensures fairness and equality in treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non- discriminatory: it must not be guided by any extraneous or irrelevant consideration, because that would be denial of equality. In the impugned case, the retrospective amendment to Section 140 of the CGST Act, 2017 (done vide Section 28 of the CGST (Amendment) Act, 2018) cannot be termed as violative to Article 14 of the Constitution of India as the same is applicable to all the persons equally who are covered within its ambit. Further, freedom of trade, commerce and intercourse throughout the territory of India is also not restri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ons (8) (a). where in pursuance ofan assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, 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 thisAct." (emphasis supplied) (C) There are also cases wherein capital goods were imported under the EPCG Authorization in pre - GST regime foregoing the Basics Customs Duty (BCD), Countervailing Duty (CVD) and Special Additional Duty (SAD). The Bill of Entry for the said Capital Goods had been assessed (under EPCG Scheme) at the time of import in pre- GST regime, subject to the conditions that if the petitioner fails to fulfill the export obligation (or decides to exit the EPCG Scheme), he is required to pay duties of customs (including CVD and SAD) plus the interest as applicable. Similarly, there are cases where the goods were imported under Advance Authorization without payment of applicable customs duties (BCD, CVD , SAD etc.) in pre-GST re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....goods and services tax charged on import of goods; (b) the tax payable under the provisions of sub-sections (3) and (4) of section9; (c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services TaxAct; (d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act;or (e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy. On perusal of the above definition, it is clear that any pre-existing taxes or duties viz-a-viz excise duty, Service Tax, Additional duty of Customs (CVD) paid under provisions of Section 3(1) of Customs Tariff Act and Special Additional duty of Customs (SAD) paid under Section 3(5) of Customs Tariff Act etc. are not covered under the definition of "input tax" and hence, cannot be governed by the provisions of Section 16 of the said Act. These taxes are to be governed by the transitional provisions laid under Section 139 to Section 142 of the CGST Act 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded by the legislature. It is not admissible to all kinds of sales and certain specified sales are specifically excluded. (b) Concession of ITC is available on certain conditions mentioned in this section. (c) One of the most important condition is that in order to enable the dealer to claim ITC it has to produce original tax invoice, completed in all respect, evidencing the amount of in put tax.... ...13. For the same reasons given above, challenge to the constitutional validity of sub-section (20) of Section 19 of the VAT Act has to fail. When a concession is given by a statute, the legislature has power to make the provision stating the form and manner in which such concession is to be allowed. Sub-section (20) seeks to achieve that.There was no right, inherent or otherwise, vested with dealers to claim the benefit of ITC but for Section 19 of the VAT Act." (B). Furthermore, in similar matter, there have been a no. of judgements of the Hon'ble Supreme Court / High Courts declaring that the credit is only in the form of concession / benefit and is not an accrued right. The relevant portion of which are reproduced below for reference,- (i) The Hon'....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mselves stipulate and provide for conditions for availment of that credit, then, that credit on inputs under the existing law itself is not an absolute but a restricted or conditional right. It is subject to fulfillment or satisfaction of certain requirements and conditions that the right can be availed of." (C). Section 140 of the CGST Act, 2017, which deals with the transitional provisions, permits carry forward of the CENVAT credit of eligible duties. It is submitted that merely because a carry-forward of CENVAT Credit is permitted from the earlier regime to the new regime it does not mean that this right is absolute in nature and can be claimed over and above the present statutory regime. In fact, on the contrary the very fact that the Legislature had to provide for this right under the statute means that it is a statutory right, which can only be availed of as provided for in the statute. Provisions have been made under Chapter XX of the CGST for transition of credit for different class of tax payers and restrictions, if any, placed on a particular class of taxpayers are reasonable in nature and by no stretch of imagination be termed as perverse, arbitrary and unreasonable.....