Page 63 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] SIDDHI DEVELOPERS v. UNION OF INDIA 21
“34. By no stretch of imagination, the restriction imposed under
sub-rule (3A) of Rule 8 to the extend it requires a defaulter irrespec-
tive of its extent, nature and reason for the default to pay the excise
duty without availing Cenvat credit to his account can be stated to
be a reasonable restriction. It leads to a situation so harsh and a po-
sition so unenviable that it would be virtually impossible for an as-
sessee who is trapped in the whirlpool to get out of his financial dif-
ficulties. This is quite apart from being wholly reasonable, being ir-
rational and arbitrary and therefore, violative of Article 14 of the
Constitution. It prevents him from availing credit of duty already
paid by him. It also is a serious affront to his right to carry on his
trade or business guaranteed under Article 19(1)(g) of the Constitu-
tion. On both the counts, therefore, that portion of sub-rule (3A) of
rule must fail.”
40. The liability to pay GST on sale of stock carried forward from the pre-
vious tax regime without corresponding input tax credit would lead to
double taxation on the same subject matter and, therefore, it is arbitrary and
irrational.
41. C.B.E. & C. Flyer No. 20, dated 1-1-2018 had clarified as under :
“(c) Credit on duty paid stock : A registered taxable person other
than manufacturer or service provider, may have a duty paid goods
in his stock on 1st July, 2017. GST would be payable on all supplies
of goods or services made after the appointed day. It is not the in-
tention of the Government to collect tax twice on the same goods.
Hence, in such cases, it has been provided that the credit of the du-
ty/tax paid earlier would be admissible as credit.”
42. Article 300A provides that no person shall be deprived of property
saved by authority of law. While right to the property is no longer a fun-
damental right but it is still a constitutional right. CENVAT credit earned
under the erstwhile Central Excise Law is the property of the writ-
applicants and it cannot be appropriated for merely failing to file a declara-
tion in the absence of Law in this respect. It could have been appropriated
by the Government by providing for the same in the CGST Act but it cannot
be taken away by virtue of merely framing Rules in this regard.
43. In the result, all the four writ-applications succeed and are hereby al-
lowed. The respondents are directed to permit the writ-applicants to allow
filing of declaration inform GST TRAN-1 and GST TRAN-2 so as to enable
them to claim transitional credit of the eligible duties in respect of the in-
puts held in stock on the appointed day in terms of Section 140(3) of the
Act. It is further declared that the due date contemplated under Rule 117 of
the CGST Rules for the purposes of claiming transitional credit is procedur-
al in nature and thus should not be construed as a mandatory provision.”
7. Learned Advocate for the petitioner submitted that the respondents
may be directed to consider the case of the petitioner after verification of credit of
Cenvat as well as service tax available to the petitioner as on 1st July, 2017 so as
to enable the petitioner to upload Form GST TRAN-1 on or before 31st March,
2020 in view of the Order No. 1/2020-GST, dated 7th February, 2020 issued by
Government of India, Ministry of Finance.
8. On the other hand, Learned Standing Counsel Mr. Ankit Shah for the
respondents submitted that as per the respondents, there are no technical glitch-
es found in the case of the petitioner and therefore, the petitioner was not al-
GST LAW TIMES  7th May 2020  63