2020 (2) TMI 1240 - HC - GST

Constitutional validity of Rule 117 of the CGST Rules - time limitation - carry forward of CENVAT credit - migration to GST regime - HELD THAT - This Court has not declared the said Rule 117 of the CGST Rules, 2017 neither this Court has ordered the respondents to carry forward CENVAT credit beyond the time limit, but in the case on hand, the respondents herein had tried to upload form GST TRAN-1, but it could not be filed on account of technical glitches in terms of poor network connectivity and other technical difficulties at common portal. Under the circumstances, this Court has gone into the question that in such circumstances what would be the remedy if a person who tries to follow Rule 117 of the CGST Rules, 2017 but, without there being any fault on his side he could not upload the form due to technical glitches. This Court has followed the judgement in the case of FILCO TRADE CENTRE PVT. LTD. VERSUS UNION OF INDIA 2018 (9) TMI 885 - GUJARAT HIGH COURT , wherein, after relying on number of judgements of the Apex Court, the coordinate Bench of this Court had followed the consistent findings of the Apex Court and held that the right accrued to the assessee on the date when the paid tax on the raw materials or the inputs and that right would continue by way of CENVAT credit. The CENVAT credit is therefore indefeasible. This Court had directed the applicants herein original respondents to permit the respondents herein original petitioners to allow filing declaration form in GST TRAN-1 and GST TRAN-2, so as to enable them to claim transitional credit of the eligible duties in respect of the inputs held in stock on the appointed day in terms of Section 140(3) of the GST Act. When the co-ordinate Bench had already declared clause (iv) of sub-section (3) of Section 140 as unconstitutional, we do not have any hesitation to declare Rule 117 of the CGST Rules, 2017 for the purpose of claiming transitional credit as procedural in nature and should not be construed as mandatory provision. The present applications deserve to be dismissed and are hereby dismissed.

Summary

Issues:
Review of judgment based on statutory provisions and time limits.

Analysis:
The judgment involved a review of a previous decision by the High Court regarding the time limit provisions within Rule 117 of the CGST Rules. The applicants sought a review, claiming that they had not previously pointed out relevant judgments of the Court. The Court considered the arguments presented by both parties. The respondents argued that a judgment passed per incuriam does not create a binding precedent, citing various legal precedents from the Supreme Court and other High Courts. They contended that the previous decisions by the Court had not considered binding precedents and mandatory provisions, rendering them per incuriam. The respondents highlighted that the principle underlying a specific case should be a binding precedent in subsequent cases. They referenced judgments from other High Courts to support their argument.

The Court examined the submissions and found merit in the arguments presented by the respondents. The Court referenced a previous case where the vires of Section 164 of the CGST Act were challenged, and the time limit provision in Rule 117 of the CGST Rules was discussed. The Court differentiated the previous cases from the current one, emphasizing that in the present matter, the respondents faced technical difficulties in filing necessary forms due to poor network connectivity. The Court relied on the judgment in Filco Trade Centre Pvt. Ltd., where the right accrued to the assessee for transitional credit was deemed indefeasible. Consequently, the Court directed the respondents to permit the petitioners to file necessary declarations for claiming transitional credit. The Court declared Rule 117 of the CGST Rules as procedural and not mandatory, following the principles established in previous judgments. The Court dismissed the present applications, emphasizing that the applicants had not considered the previous judgment of the Court and hastily filed the review applications.

In conclusion, the Court dismissed the review applications, upholding the principles established in previous judgments and emphasizing the importance of considering binding precedents in legal proceedings. The Court's decision was based on a thorough analysis of the arguments presented by both parties and the relevant legal principles governing the case.