2020 (10) TMI 850 - HC - GST

Vires of Section 140(1) of Central Goods and Services Tax Act, 2017 - Input Tax Credit - Reverse Charge Mechanism pursuant to Notification No. 15/2017-ST dated 13.04.2017 - HELD THAT -The instant matter does not fall within the subject matter assigned to this Bench. Therefore, let the matter be listed before the appropriate Division Bench, as per the present distribution of roster.

Summary

Issues:
Challenge to Section 140(1) of Central Goods and Services Tax Act, 2017; Validity of Rule 120A of G.S.T Rules, 2017; Claim of Input Tax Credit on Service Tax under Reverse Charge Mechanism; Amendment in GSTN Portal for revised declaration submission.

Analysis:

1. Challenge to Section 140(1) of CGST Act:
The petitioner sought a declaration that Section 140(1) of the Central Goods and Services Tax Act, 2017, which restricts the carry forward of CENVAT Credit to the amount reflected in the return preceding the appointed day, is arbitrary and illegal. The petitioner argued that this provision denies dealers the rightful Input Tax Credit under the GST regime for eligible CENVAT Credit amounts not reflected in the last return. The petitioner claimed entitlement to carry forward additional CENVAT Credit amounts despite non-inclusion in the preceding return.

2. Validity of Rule 120A of G.S.T Rules, 2017:
The petitioner challenged the validity of Rule 120A of the G.S.T Rules, 2017, alleging it to be ultra vires and a camouflage. The rule permits revised declaration filing in Form GST TRAN-1 only within the time prescribed under Rule 117 of CGST Rules. The petitioner contended that this restriction hinders dealers from claiming rightful Input Tax Credit and sought an amendment in the GSTN Portal to enable electronic submission of revised declarations in line with Section 140 of the CGST Act.

3. Claim of Input Tax Credit on Service Tax under Reverse Charge Mechanism:
The petitioner claimed entitlement to Input Tax Credit on Service Tax amounting to a specific sum paid for import of inputs/capital goods under the Reverse Charge Mechanism pursuant to a specific notification. The petitioner sought recognition of this Service Tax payment towards its liability and the corresponding benefit of Input Tax Credit under the GST regime.

4. Amendment in GSTN Portal for Revised Declaration Submission:
Apart from the substantive claims, the petitioner also requested an amendment in the GSTN Portal to align with Rule 120A of the G.S.T Rules, 2017. This amendment would facilitate dealers in submitting revised declarations electronically to avail Input Tax Credit benefits as provided under Section 140 of the CGST Act.

In response, the Respondent-GST Council and Central Goods and Service Tax Department indicated their intent to file a counter affidavit, while the learned ASGI sought instructions on the matter. However, the Bench noted that the subject matter did not fall within its jurisdiction and directed the matter to be listed before the appropriate Division Bench based on the current roster distribution.