HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 440/2020 M/s. Shree Motors, (Proprietor Pradeep Choudhary) Having Principal Place Of Business At 170, Rajiv Nagar, Basni, Jodhpur (Rajasthan) - 342004. ----Petitioner Versus 1. Union Of India, Ministry Of Finance (Department Of Revenue), Room No. 46, North Block, New Delhi-110001 Through Joint Director (Revenue). 2. Goods And Service Tax Council (Gst Council), Office Of Gst Council Secretariat, 5Th Floor, Tower-Ii, Jeevan Bharti Building, Janpath Road, Connaught Place, New Delhi-110001 Through Its Secretary. 3. Goods And Service Tax Network (Gstn), Through Its Ceo, East Wing, Woldmark 1, 4Th Floor, Tower B, Aerocity, New Delhi-110037. 4. Central Board Of Indirector Taxes And Customs, Through Its Chairman, Department Of Revenue, North Block, New Delhi-110001. 5. Assistant Commissioner, Office Of Central Goods And Service Tax, Jodhpur, Rajasthan. ----Respondents Connected With S.B. Civil Writ Petition No. 266/2020 Gaurav Industries, Proprietorship Concern, Having Place Of Business At Industrial Estate, Shivaji Marg, Falna - 306116. Through Its Proprietor R.k. Jain S/o Milap Chandji Jain, Aged 56 Years, R/o Nehru Colony, Falna Dist. Pali (Raj.) - 306304. ----Petitioner Versus 1. Gst Council Secretariat, 5Th Floor, Tower Ii, Jeevan Bharti Building Janpath Road, Connaught Place, New Delhi. 2. Commissioner, Cgst Commissionerate, Jodhpur, G-105, Late No.5, New Jodhpur Industrial Area, Jodhpur-342003. 3. Assistant Commissioner, Cgst Division-D, Range Pali, Ground Floor, Tdm Office Campus, Bsnl, Mahavir Nagar, (2 of 12) Pali - 306401. ----Respondents For Petitioner(s) : Mr. Sharad Kothari Mr. Prateek Gattani For Respondent(s) : Mr. Rajvendra Saraswat HON'BLE MR. JUSTICE ARUN BHANSALI Judgment 18/03/2020 These writ petitions have been filed by petitioners aggrieved by non filing of Form GST Tran-1 at common portal allegedly because of various system error/technical glitches at portal throughout period during which Form was available, which resulted in denial of transactional credit of central excise paid on goods amounting to Rs. 23,27,063/- in S.B.C.W.P. No. 440/2020 and Rs. 85,41,755/- in S.B.C.W.P. No. 266/2020 as on appointed date i.e. 01.07.2017 in terms of Section 140 of Central Goods and Service Tax Act, 2017 ( CGST Act ). It is, inter alia, indicated in writ petitions that petitioners had purchased goods prior to appointed date i.e. 01.07.2017, which were held in stock on appointed date. provisions of Chapter-XX of CGST Act provided for transitional provisions for transition of credit from erstwhile indirect tax regime to GST regime, which inter alia provided that registered person who was not liable to be registered under provisions of Central Excise Act, 1944 ( Act of 1944 ) is entitled to take credit of eligible duties in respect of input held in stock on appointed day subject to fulfillment of conditions set out therein. It is submitted that provision of Section 140 of CGST Act is (3 of 12) complete Code in itself and same does not provide for eligibility subject to any further conditions. Rule 117 of Central Goods and Service Tax Rules, 2017 ( CGST Rules ) was framed for allowing carry forward of eligible duties available with assessee on day immediately preceding 01.07.2017, which inter alia, imposed time limit of 90 days (further extended by 90 days) for taking credit of eligible duties in electronic credit ledger. It is alleged that due to various technical glitches/system error petitioners have failed to file Form GST Tran-1 at common portal within time envisaged under Rule 117 of CGST Rules. After attempting help at GST network portal, petitioners approached department for manually accepting Form GST Tran-1 and made several attempts in this regard. However, same were not responded. petitioner M/s. Shree Motors assailed validity of Rule 117 of CGST Rules by filing S.B.C.W.P. No. 4315/2019, however, same was declared intra vires by this Court and issue raised pertaining to technical glitches was referred to Single Judge for adjudication. writ petition came to decided by learned Single Judge by order dated 21.11.2019 (Annexure-13), wherein, following judgment in case of Jodhpur Truck Pvt. Ltd. V. Union of India & Ors. : S.B.C.W.P. No. 15221/2019, decided on 01.11.2019, petition was disposed of, wherein petitioner was directed to file detailed representation to GST Council in terms of Rule 117(1A) of CGST Rules and GST Council was directed to dispose of representation in time bound manner with speaking order. (4 of 12) In S.B.C.W.P. No. 266/2020 also, similar direction was issued on 21.11.2019. Pursuant to directions dated 21.11.2019 petitioners filed their representation to GST Council with prayer to allow online filing of Form GST Tran-1, however, representation filed by petitioner in S.B.C.W.P. No. 440/2010 was decided by GST Council (Annexure-15) with observations that case was put up at ITGRC meeting held on 02.12.2019 and it was observed that petitioner s case falls under category B-1 i.e. cases where tax payer received error As per GST system log, there are no evidence of error or submissions/filing of TRAN- 1 . petitioner was further directed that credit of GST TRAN-1 taken by petitioner on basis of interim order be reversed with applicable interest. Similarly in S.B.C.W.P. No. 266/2020 identical communication (Annexure-10) was sent and alongwith letters copies of communication received from Joint Secretary, GST Council were annexed. It is, inter alia, submitted by counsel for petitioners that action of respondents in denying credit to petitioners, entitlement whereof is not in dispute, only on account of fact that due to technical glitches petitioners could not file requisite Form GST Tran-1 in window provided by Rule 117 of CGST Rules, is not justified. It was submitted that respondents without taking into consideration submissions made in this regard as well as various judgments of various High Courts directing grant of credit, have rejected representation made by petitioners, (5 of 12) pursuant to directions given by this Court that also based on determination made prior to order passed by this Court. Further submissions were made that petitioners have vested right to seek credit once duties for taxes have been paid by petitioners. procedure providing for limitation despite fault/defect on part of department to make available requisite system for taking credit, action in denying credit cannot be sustained. Submissions were also made that various Courts have granted requisite relief irrespective of non-availability of any technical log on GSTN system . Submissions were made that status of departmental portal was such that despite attempts made in this regard no log in happened and, consequently for lack of technical log, petitioners could not have been denied credit, to which they were otherwise entitled. Reliance was placed on Triveni Needles Pvt. Ltd. v. Union of India & Ors. : W.P.(C) 11105/2019, decided on 17.12.2019 by Delhi High Court, Tyre Plaza v. Union of India & Ors. : W.P. (C) 8970/2019, decided on 20.08.2019 by Delhi High Court, Blue Bird Pure Pvt. Ltd. v. Union of India & Ors. : (2019) 68 GSTR 340, Asiad Paints Limited & Ors. V. Union of India & Ors. : W.P. No. 33290/2019, decided on 19.11.2019 by Karnataka High Court, Jay Bee Industries v. Union of India & Ors. : CWP No. 2169/2018, decided on 16.11.2019 by Himachal Pradesh High Court & Adfert Technologies Pvt. Ltd. v. Union of India & Ors. : CWP No. 30949/2018, decided on 04.11.2019 by Punjab & Haryana High Court. After order was reserved, counsel for petitioners has submitted note indicating that special leave petition against (6 of 12) order in case of Adfert Technologies Pvt. Ltd. (supra) has been rejected by Hon ble Supreme Court on 28.02.2020. It was prayed that writ petitions be allowed and communications issued requiring petitioners to reverse credit be quashed and set aside. Learned counsel appearing for respondents made submissions that writ petitions filed by petitioners have no substance. Submissions were made that procedure have been provided in law for taking benefit of available credit by way of provisions of Section 140 of CGST Act and Rule 117 of CGST Rules. However, limitation in this regard has been provided and petitioners were, therefore, required to follow limitation in claiming credit. However, within limitation prescribed needful was not done and, therefore, petitioners are not entitled to any relief. Further submissions were made that once respondents after going through log came to conclusion that there was no evidence of error or submission/filing of Form GST Tran-1 by petitioners, petitioners on account of alleged vested right cannot seek relaxation in limitation and reopening of portal for purpose. Further submissions were made that allegations made about technical glitches and that assesses were generally denied credit on account of such glitches is baseless as huge number of Form GST Tran-1 were filed and credit was given. Submissions were made that no vested right has been taken away, only time limit has been fixed and, therefore, various pleas raised in this regard cannot be sustained. (7 of 12) Reliance was placed on judgment in Osram Surya (P) Ltd. v. Commr Central Excise, Indore : 2002 (9) SCC 20, JCB India Ltd. v. Union of India : Case No. 3142/2017, decided on 20.03.2018 by Bombay High Court, ALD Automotive Pvt. Ltd. v. Commercial Tax Officer & Ors. : AIR 2018 SC 5235, Willowood Chemicals Pvt. Ltd. v. Union of India : Special Civil Application No. 4252/2018, decided on 19.09.2018, wherein, constitutional validity of second proviso to Section 140(1) of CGST Act and Rule 117 of CGST Rules has been upheld. It was prayed that writ petitions be dismissed. I have considered submissions made by learned counsel for parties and have perused material available on record. As noticed hereinbefore, petitioners in earlier round of litigation initially challenged validity of provisions of Section 140 of CGST Act and Rule 117 of CGST Rules, however, in view of fact that validity was upheld, matter was transmitted to Single Judge. By order dated 21.11.2019 writ petitions filed by petitioners were disposed of by learned Single Judge relying on order in case of Jodhpur Truck Pvt. Ltd. (supra), with following directions:- In view of above, present writ petition is disposed of in terms of judgment rendered by this Court in case of Jodhpur Truck Pvt. Ltd. (supra) and following directions are issued: 1. respondents shall permit petitioner to submit online GST TRAN-1 form, subject to furnishing proof that he had tried to upload GST TRAN-1 form prior to 27.12.2017 and such attempt failed due to technical fault/glitch on common portal. Needless to mention that petitioner will be required to submit certificate/recommendation issued by GST Council in this regard. 2. In case all three requirements enumerated in para no.12 of judgment of Jodhpur Truck Pvt. Ltd. (8 of 12) (supra) are met/satisfied, petitioner s online GST TRAN-1 form shall be accepted, of course, if it is filed by 31.12.2019 or extended period (if any). 3. For purpose aforesaid, petitioner may submit application before GST Council to issue requisite certificate/recommendation, alongwith requisite particulars, evidence and certified copy of order instant, within period of 15 days from today. If petitioner s assertion is found correct, GST Council shall issue recommendation/certificate to petitioner within period of three weeks from placement of such application and certified copy of this order. 4. In case GST Council is of view that petitioner is not entitled for certificate/recommendation, they shall pass order giving brief reasons and communicate same to petitioner assessee. Needless to observe that petitioner shall be free to take appropriate remedy against such order. perusal of above directions would reveal that Court permitted petitioners to submit online Form GST Tran-1 subject to furnishing proof that they had tried to upload Form GST Tran-1 prior to 27.12.2017 and such attempt failed due to technical glitches on common portal. Further petitioners were required to submit certificate/recommendation issued by GST Council in this regard and with reference to para 12 of judgment in case of Jodhpur Truck Pvt. Ltd. (supra), form was ordered to be accepted and GST Council was required to issue their requisite certificate within period of 15 days if petitioners assertion was found correct and in case petitioners were not entitled for requisite, Council was required to pass order giving reasons. above directions are explicit, wherein, on representation made by petitioners GST Council was required to issue requisite certificate/recommendation in terms of (9 of 12) para 12 of judgment in case of Jodhpur Truck Pvt. Ltd. (supra). Para 12 of judgment in case of Jodhpur Truck Pvt. Ltd. (supra) reads as under:- 12. bare look at above-quoted provisions leaves no room for ambiguity that assessee can be permitted to furnish offline GST TRAN-1 form subject to fulfilling all three conditions, mentioned hereinfra : (i) assessee failed to upload his GST TRAN-1 form on account of technical glitches on common portal; and (ii) such attempt was made during currency of transitional period i.e., 22.12.2017. (iii) GST Council has made recommendation for such extension, being satisfied about such failure. perusal of representations made by petitioners (Annexure-14 in S.B.C.W.P. No. 440/2020 and Annexure-9 in S.B.C.W.P. N0. 266/2020) would reveal that except for claiming credit, petitioners did not indicate any material to show that petitioners had failed to upload their Form GST Tran-1 on account of technical glitches on common portal and such attempt was made during currency of transitional period as required by judgment in case of Jodhpur Truck Pvt. Ltd. (supra). GST Council dealt with cases of petitioners alongwith some other similarly situated petitioners and came to following conclusion:- 2. ITGRC is Committee constituted by GST Council to deal with such issues and in this regard on verification of minutes of ITGRC up to 9 th meeting following has been noticed with regard to said Writ Petitions:- Sr.No. Writ Petition No. Filed by Remarks 4. 4752/2019 M/s Gaurav B-1 Category, 3rd Industries ITGRC meeting held on (10 of 12) 26.10.2018 7. 4315/2019 M/s Shree Motors B-1 Category, 9th ITGRC meeting held on 02.12.2019 3. In view of above position it is clear that 9 cases (Sr. No.1, 4, 5, 6, 7, 9, 10, 13, 14) were placed through GSTN as per CBIC Circular dated 03.04.2018 before ITGRC and remaining 5 cases (Sr. No. 2, 3, 8, 11, 12) are not placed before ITGRC till 9th ITGRC. 4. Out of above 9 cases presented by GSTN only one case (Sr. No. 14) was categorised under category by GSTN which means error was faced by taxpayer while filing TRAN-1 on GST Portal. Other 8 cases were placed in category B by GSTN on basis of systems log as no error was faced by taxpayer while filing TRAN-1. Therefore, ITGRC has recommended only one case (Sr. No. 14) to reopen portal and in remaining 08 cases not allowed to re-open GST Portal. In case any new facts has emerged in view of Para 2 above, in these cases, same may be brought to notice of this office. 5. Further, your attention is drawn towards Commissioner (Legal) letter dated 13.11.2018 and 01.08.2019 for further needful action in such cases. You may consider filing appeal in terms of CBIC (Legal) letter F. No. 276/187/2018- CX. 8A Part dated 20.11.2018. In case any new facts has emerged in view of Para 2 above, in these cases, same may be brought to notice of this office. 6. This issues with approval of Competent Authority. Yours Faithfully, Encl : as above sd/- (Dheeraj Rastogi) Joint Secretary, GST Council perusal of above communication dated 12.12.2019 reveals that GST Council referred to ITGRC meeting, wherein, cases of petitioners were considered and indicated that their cases fell in B-1 category and B-1 category has been described as as per GST system log, there are no evidences of error or submission/filing of Tran-1 . It appears that as regard status of filing/submission of Form GST Tran-1 on part of petitioners is concerned, it had already been considered by ITGRC meeting held on (11 of 12) 26.10.2018 in case of S.B.C.W.P. No. 226/2020 and said aspect was not brought to notice of Court while passing order dated 21.11.2019 requiring making of representation and its consideration by GST Council, however, in case of petitioner in S.B.C.W.P. No. 440/2020 has been considered after passing of order. In view of fact that this Court while deciding writ petitions filed by petitioners had laid down specific parameters for grant of relief to petitioners and it has been found by respondents as fact that there was no evidences of error or submission/filing of Form GST Tran-1 by petitioners, petitioners apparently are bound by said outcome and, as such, are not entitled to any relief. So far as submissions made pertaining to vested right and fact that as petitioners have admittedly paid taxes and are, therefore, entitled for relief, suffice it to notice that petitioners had questioned validity of provisions of Section 140 of CGST Act and Rule 117 of CGST Rules in earlier writ petition, which plea was negated. theory of vested rights and implication of limitation on said aspect of vested right has been considered by Hon ble Supreme Court in case of Osram Surya (P) Ltd. (supra), wherein, while considering proviso II to Rule 57G of Act of 1944 it was laid down that by providing limitation statute has not taken away any of vested rights, which accrue to manufacturers and what is restricted is time, within which, manufacturer has to enforce that right and, therefore, once (12 of 12) provisions of Rule 117 of CGST Rules, which prescribe limitation has been upheld, plea raised pertaining to denial of vested right on account of petitioners failing to submit/file Form GST Tran-1 in time cannot be countenanced. In judgments of various High Courts cited by learned counsel for petitioners, in none of cases petitioners therein were given specific directions to place material with regard to technical glitches and attempt on their part to file/submit Form by High Court in petitions filed by them and finding of fact had been recorded pertaining to failure on part of petitioners therein to file/submit Form GST Tran-1 by GST Council. In view thereof, directions given in judgments relied on by leaned counsel for petitioners cannot come to rescue of petitioners now, once under directions of this Court finding with regard to same has come on record. In view of above discussion, no case for interference as sought by petitioners is made out in present writ petitions. petitions are accordingly dismissed. No order as to costs. (ARUN BHANSALI),J AK Chouhan/- Shree Motors v. Union Of India, Ministry Of Finance / Goods And Service Tax Council /Goods And Service Tax Network/ CBIT and Customs/ Assistant Commissioner, Office Of Central Goods And Service Tax