While admitting a petition challenging the provisions of Central Goods and Services Tax (GGST) Act which restricts the time limit for filing and revising of GST Tran 1 to the extent of only 180 days from the appointed day, the Gujarat High Court has issued notices to Centre and GST Council.
The petitioner M/s Jay Chemical Ltd has filed the writ petition (SCA 10828 of 2018) before the Gujarat High Court challenging the Constitutional validity and vires of Rule 117 of the Central Goods and Services Tax Rules, 2017 and Form GST Tran-1 issued in relation thereto vis-à-vis Section 140(5), Section 164 of the Central Goods and Services Tax Act, 2017. Petitioner further contended that it violates Article 14, Article 19(1)(g), Article 265 and Article 300A of Indian Constitution.
The petitioner is Company having the registered office in Gujarat and is one of the leading player in the chemical segment .
Counsel for the Petitioners, Mr. Vinay Shraff, Mr. Vishal J Dave , Mr.Nipun Singhvi and Ms. Hiral Dave submitted before the Court that the vires of provision of Rule 117 of the Central Rules and Form GST Tran-1 issued in relation thereto has been challenged on the ground that it restricts the time limit for filing and revising of GST Tran 1 to the extent of only 180 days from the appointed day even though there is no such limitation under Section 140(5) of the Central GST Act which provides for both substantive as well as procedural conditions to avail Cenvat credit of goods and services in transit on the appointed day.
The aforesaid Rule has also been challenged on the ground that it does not allow opportunity to rectify errors and omission while filing GST Tran-1 even though analogous Section 39(9) allows rectification of any omission or incorrect particulars in any return filed under the Central GST Act until September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier. Therefore, it is arbitrary and unreasonable to not allow rectification of any omission or incorrect particulars in a statement to be filed under Section 140(5) of the Central GST Act even though the same is allowed in respect to other returns to be filed. There is no reasonable rationale in discriminating between a transitional return and other returns to be filed under the Act and therefore Rule 117 to that extent violates the mandate of Articles 14 and 19(1)(g) of the Constitution of India.
The matter was heard by Division bench of Hon’ble Justice Mr. MR Shah and Hon’ble Justice Mr. AY Kogje.
Next date for the matter is fixed on 25.07.2018
CA Abhishek Chopra, GST Consultant opined that “To err is a human nature, the error cannot be presumed to be malafide nad has to be bonafide. Being fiscal statute interpretation should be liberal in case of legitimate tax payer. This provision appears to be harsh and presumes that no error is permissible in law whatsoever which goes against the basic purpose of providing Cenvat credit which is a vested right of a registered person. The time limit for filing and revising of GST Tran-1 is not provided under Section 140(5) of the Central GST Act which provides for both substantive and procedural conditions to avail Cenvat credit of goods and services in transit on the appointed day. The Rule 117 of CGST Rules, 2017, to that extent violates the mandate of Articles 14 and 19(1)(g) of the Constitution of India. This verdict shall be important as it may provide big relief to legitimate taxpayers who have been perplexed by technical glitches and series of amendments.