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2022 (8) TMI 865 - HC - GSTSeeking direction to credit the amount relating to input tax credit (ITC) - time limit for availment of credit by transition is mandatory or directory? - validity of the retrospective amendments to Section of CGST Act and Rule 117 of the CGST Rules - HELD THAT - No doubt, the timelines for seeking transition of credit have been held to be mandatory. The decision in the case of M/S. P.R. MANI ELECTRONICS VERSUS UNION OF INDIA, THE GOODS AND SERVICE TAX COUNCIL, THE PRINCIPAL CHIEF COMMISSIONER OF GST CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF GST CENTRAL EXCISE 2020 (7) TMI 443 - MADRAS HIGH COURT can be referred - However, in the subsequent decision in M/S. AMPLEXOR INDIA PRIVATE LIMITED VERSUS UNION OF INDIA AND OTHERS 2021 (2) TMI 477 - MADRAS HIGH COURT , the Bench has, considering a slew of judgments cited by both sides, been persuaded to formulate certain issues for resolution. This includes the issue as to whether the timelines seeking transition under 140 and 117 are mandatory or directory and the same is pending declaration. In M/S. BHARAT ELECTRONICS LIMITED VERSUS COMMISSIONER OF GST CENTRAL EXCISE, ASSISTANT COMMISSIONER OF GST CENTRAL EXCISE, CENTRAL BOARD OF EXCISE CUSTOMS, PRINCIPAL COMMISSIONER, CHENNAI NORTH COMMISSIONERATE, CHENNAI 2021 (7) TMI 334 - MADRAS HIGH COURT , it is held that it does not stand to reason that the time limit for revision of a TRAN 1 return be identical to the timeline for filing of a return seeking transition. The purpose of revision is to enable correction/modification of a return of transition. In such an event, it would stand to reason that some additional time, over and above the timeline granted for a TRAN-1 return be provided by the respondent, in the later instance. Rule 120A does not, by itself, stipulate any time limit, though undoubtedly, the timeline stated under Rule 117 has to be read into Rule 120 as well. This would not, lead to a conclusion that the application of Rules 117 and 120A cannot be harmonized, to make them workable, viable and practical - the timelines under Rule 120A must be of a period over and above the timelines stipulated in Rule 117, mandamus as sought for by the petitioner is issued. Since the credits filed by the petitioner relate to Central Excise and Service both coming under Central jurisdiction, R1 may will enable opening of the portal such that revision may be sought. Petition allowed.
Issues Involved:
1. Entitlement to transition of Input Tax Credit (ITC) under Section 140 of the CGST Act. 2. Time limits for filing and revising TRAN-1 under Rule 117 and Rule 120A of the CGST Rules. 3. Practicality and fairness of having the same deadline for filing and revising TRAN-1. 4. The mandatory or directory nature of the time limit for availing transitional ITC. 5. The legal implications of errors in TRAN-1 filed on the last permissible date. Detailed Analysis: 1. Entitlement to Transition of ITC: The petitioner, registered under Central Excise, claimed entitlement to transition ITC amounts of Rs.16,21,227/- and Rs.4,24,136/- as per Section 140 of the CGST Act. The amounts represented the closing balance of CENVAT credit as per their returns for June 2017 and service tax for April to June 2017. The petitioner argued that they were entitled to transition these credits into the GST regime. 2. Time Limits for Filing and Revising TRAN-1: Rule 117 of the CGST Rules mandated that GST registrants file a declaration in Form GSTR TRAN-1 within 90 days from 01.07.2017, with several extensions granted due to technical glitches. The final extended deadline was 27.12.2017. Rule 120A allowed for the revision of TRAN-1 but did not specify a separate time limit, implying that the deadline for revision was the same as for the initial filing. 3. Practicality and Fairness of Deadlines: The petitioner contended that having the same deadline for filing and revising TRAN-1 led to an absurd and unworkable situation. If an error was made in a TRAN-1 filed on the last permissible date, there would be no opportunity for revision. The court agreed, stating that the legislature could not have intended such an impractical outcome. 4. Mandatory or Directory Nature of Time Limits: The respondents cited a judgment in P.R. Mani Electronics, which held that the time limit for availing transitional ITC was mandatory. However, the petitioner referenced a subsequent decision in Amplexor India Pvt. Ltd., where the court admitted the matter and framed questions regarding the mandatory or directory nature of the time limits under Rule 117. The court noted that this issue was still pending resolution. 5. Legal Implications of Errors in TRAN-1: The petitioner uploaded TRAN-1 on 27.12.2017 but made errors: incorrectly mentioning Rs.76,395/- instead of Rs.16,21,227/- and omitting Rs.4,24,136/-. Despite explaining the errors in a representation filed on 28.12.2018, no response was received, leading to the writ petition. The court held that the timeline for revising TRAN-1 should not be identical to the initial filing deadline, as revision is intended to correct errors in the original filing. Therefore, additional time should be provided for revision. Conclusion: The court issued a mandamus directing the respondents to enable the petitioner to revise their TRAN-1 by opening the portal within eight weeks from the order date. The court emphasized that the timelines for revision under Rule 120A must extend beyond those stipulated in Rule 117 to ensure practical and fair application. The writ petition was allowed, and the connected miscellaneous petition was closed with no costs.
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