Madras High Court
M/S.Vetrivel Explosives Pvt. Ltd vs Union Of India on 13 April, 2022
WP (MD) No.8250 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 13.04.2022
CORAM
THE HONOURABLE MR. JUSTICE C.SARAVANAN
Writ Petition (MD) No.8250 of 2021
and
W.M.P.(MD)No.6231 of 2021
M/s.Vetrivel Explosives Pvt. Ltd.,
Rep. by its Managing Director,
R.Vijaya Kannan,
T.Murungampatti Village,
Thuraiyur Taluk,
Trichirappalli District – 621 102. .. Petitioner
Versus
1.Union of India,
Rep. by its Secretary,
Department of Revenue, Ministry of Finance,
Room No.46, North Block,
New Delhi – 110 001.
2.Goods and Service Tax Networks (GSTN),
Through its Chairman,
East Wing, 4th Floor,
World Mark – 1,
Aerocity,
New Delhi.
3.Goods and Service Tax Council,
Through its Secretary,
5th Floor, Tower – II,
Jeewan Bharti Building,
Janpath Road,
Connaught Place,
New Delhi – 110 001.
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WP (MD) No.8250 of 2021
4.The Commissioner of GST and Central Excise,
No.1, Williams Road,
Cantonment,
Tiruchirappalli. .. Respondents
Petition filed under Article 226 of the Constitution of India praying for
issuance of a Writ of Certiorarified Mandamus, to call for the records of the
fourth respondent relating to the impugned communication, dated 19.11.2020,
in File No.GEXCOM/TECH/MISC/1634/2020-TECH, quash the same and
consequently, direct the fourth respondent to verify the claim of the petitioner
and forward the same to the third respondent for consideration on merits,
within a time frame as may be fixed by this Court.
For Petitioner : Mr.M.Karthikeyan
For R1 : Mr.M.Ashokkumar
Central Government Standing Counsel
For R2 to R4 : Mrs.S.Ragaventhre
Junior Standing Counsel
ORDER
The petitioner has challenged the impugned communication dated
19.11.2020 of the fourth respondent. By the impugned communication, the
fourth respondent has stated as follows:-
''7. You have neither attempted to file Tran-1 return nor come
across any technical glitches at the time of filing TRAN-1 return at
GSTN common portal. Hence, it is informed that as per the minutes of
the 32nd Council Meeting regarding TRAN-1 Credit, your request for
enabling of filing of GST TRAN-1 does not merit consideration.''
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WP (MD) No.8250 of 2021
2.It is the specific case of the petitioner that they are engaged in
manufacture of explosives and that there was a huge fire accident on
01.12.2016, which resulted in few fatal deaths of the workers of the petitioner.
Under these circumstances, the factory was closed for a period about two years
and after several round of litigations, the petitioner was able to re-open the
factory only during August 2018, by which time, the Central Excise Act had
been replaced and substituted by the Central Goods and Services Tax Act,
2017 and the respective State Goods and Services Tax Act, 2017. The
petitioner was required to file TRAN-1 Application in terms of Rule 117 of the
Central Goods and Services Tax Rules, 2017. As an assessee under the
Central Excise Act, 1944, Finance Act, 1994 and as an assessee/dealer under
the Tamil Nadu Value Added Tax Act, 2006, the petitioner was required to file
Form GST TRAN-1 on the common web portal in terms of Rule 117 of the
Central Goods and Services Tax Rules, 2017 read with Section 140 of the
Central Goods and Services Tax Act, 2017. The last date for filing return was
27.12.2017. However, the petitioner was unable to file Form GST TRAN-1 in
time as the factory had been closed and was under lock and seal.
3.It is submitted that a reprieve was given only to those assesses, who
faced technical problems after loading the information and therefore, Rule 117
of the Central Goods and Services Tax Rules, 2017 amended by Notification
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WP (MD) No.8250 of 2021
No.48/2018-Central Tax, dated 10.09.2018, with effect from 10.09.2018. The
respondents have rejected the request of the petitioner stating that the
petitioner is not entitled to avail the facility under sub-rule (1A) to Rule 117 of
the Central Goods and Services Tax Rules, 2017.
4.In support of his submissions, the learned counsel for the petitioner
relied on the following decisions:-
(i) P.Preetha vs. The Goods and Service Tax Council (GST Council),
The Commissioner of Central Tax, The Assistant Commissioner Central
Tax (GST) reported in 2022 (3) TMI 735 [Mad.]
(ii) M/s.Avatar Petro Chemicals Private Limited, Rep. by its
Director K.Satheesh Raja vs. Goods and Service Tax Council, Rep. by its
Chairman, Department of Finance, New Delhi and others [W.P.(MD)No.
7093 of 2020, dated 04.03.2022]
(iii) M/s.Suriya Engineering Works, Rep. by its Managing Partner,
Thiru.Ravichelvam vs. The Office of the Superintendent of Control GST
and Central Excise (Thiruverumbur Range), Tiruchirappalli [W.P.
(MD)No.7377 of 2020, dated 04.03.2022]
5.The learned Standing Counsel for the respondents 2 to 4 submits that
impugned communication is well reasoned and requires no interference. The
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WP (MD) No.8250 of 2021
learned Standing Counsel further submits that the benefit of sub-rule (1A) to
Rule 117 of the Central Goods and Services Tax Rules, 2017 is available only
for the persons those who filed returns in Form TRAN-1 in time i.e., on or
before 27.12.2017 and not to the persons like the petitioner, who did not file
Form TRAN-1 in time. Therefore, in the absence of an enabling provision in
the Rules or in the Act, the benefit of transitional credit cannot be allowed to
the petitioner in the year 2020. It is, therefore, submitted that the Writ Petition
is liable to be dismissed.
6.The learned Standing Counsel for the respondents 2 to 4 referred to
the decision of the Delhi High Court in the case of M/s.Brand Equity
Treaties Limited vs. Union of India [W.P.(C)No.11040/2018 and C.M.No.
42982/2018], wherein the Delhi High Court held that period of 90 days for
claiming input tax credit in TRAN-1 is directory and therefore, the period of
limitation of three years under the Limitations Act would apply is not good
law. It is, therefore, submitted that though the above said order has been
passed in favour of the assessee, the Department is in appeal before the
Hon'ble Supreme Court and therefore, the question of allowing the petitioner
to avail input tax credit in TRAN-1 cannot be permitted.
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WP (MD) No.8250 of 2021
7.I have considered the arguments advanced by the learned counsel for
the respective parties and perused the judgments produced by them.
8.In all the cases cited above, the benefit has been granted to the
assesses and writ petitions have been allowed. Since the input tax credit
equivalent to cash meant for being used for discharging the tax liability,
transition of the input tax credit cannot be restricted or denied merely because
there were technical difficulties. In case, the respondents are unable to permit
the petitioner to file TRAN-1 belatedly, they have to credit the corresponding
amount in the electronic cash register of the petitioner, provided such credit
remained unutilized on the cut-off date. Therefore, I am inclined to dispose
this Writ Petition, by directing the respondents to verify whether indeed the
petitioner had any input tax credit on the date of the accident i.e., 01.12.2016.
The monthly returns, which would have been filed for the months of October
and November 2016 would show the quantum of unutilized input tax credit on
input service tax and capital goods credit. If it existed on that day, I see no
reason why such credit should not be allowed to the petitioner either by way of
suitable credit entry in the electronic cash register of the petitioner or by way
of cash refund to the petitioner. I therefore direct the respondents to verify the
same and allow such credit which remained unutilized on the date of accident
in the regular returns filed by the petitioner.
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WP (MD) No.8250 of 2021
9.This Writ Petition stands disposed of in terms of the above
observation. No costs. Consequently, connected Miscellaneous Petition is
closed.
Index : Yes/No 13.04.2022
To
1.The Secretary,
Union of India,
Department of Revenue, Ministry of Finance,
Room No.46, North Block,
New Delhi – 110 001.
2.The Chairman,
Goods and Service Tax Networks (GSTN),
East Wing, 4th Floor,
World Mark – 1,
Aerocity,
New Delhi.
3.The Secretary,
Goods and Service Tax Council,
5th Floor, Tower – II,
Jeewan Bharti Building,
Janpath Road,
Connaught Place,
New Delhi – 110 001.
4.The Commissioner of GST and Central Excise,
No.1, Williams Road,
Cantonment,
Tiruchirappalli.
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WP (MD) No.8250 of 2021
C.SARAVANAN, J.
smn2
WP (MD) No.8250 of 2021
13.04.2022
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