Page 72 - GSTL_7th May 2020_Vol 36_Part 1

30 GST LAW TIMES [ Vol. 36
Rule 117 is not contrary to any provisions of the Act, nor it takes away any sub-
stantive right. The judicial pronouncements about the rule making power and
time-limit within the earlier tax regime would not ipso facto apply for interpreting
the transitionary provisions. Further, the GST tax regime and the transitionary
provisions are unique. For determining the challenge based on lack of rule mak-
ing power, the scheme and the Act have to be seen. The Rules once placed before
the Parliament and approved cannot be debated upon for their validity. The
availment of input tax credit is regulated by the rules and must be availed within
a time period.
18. Rule 117 falls under chapter XIV of the Goods and Services Tax
Rules. Chapter XIV is titled Transitional Provisions. This chapter contains six
Rules. Rule 117 deals with a tax or duty credit carried forward on the appointed
date. Section 118 is regarding the person to whom Section 142(11)(c) applies.
Rule 119 is regarding the declaration of stock. Rule 120 deals with details of
goods sent on approval basis. Section 120A deals with revision of declaration of
TRAN-1 Form. Section 121 is regarding recovery of credit wrongly availed. The
part of Rule 117 relevant for this discussion is reproduced below :
Rule 117 : Tax or duty credit carried forward under any existing law or on
goods held in stock on the appointed day (Chapter-XIV : Transitional Pro-
visions)
(1) Every registered person entitled to take credit of input tax under section 140
shall, within ninety days of the appointed day submit a declaration electronically in
FORM GST TRAN-1, duly signed, on the common portal specifying therein,
separately the amount of input tax credit to which he is entitled under the
provisions of the said section :
Provided that the Commissioner may, on the recommendations of the Council,
extend the period of ninety days by a further period not exceeding ninety days :
* * *
(1A) * * *
(2) * * *
(3) * * *
(4) * * *
(emphasis supplied)
Rule 117(1), thus, states that the person entitled to take credit of input tax under
Section 140 would file a declaration electronically in a form known as GST
TRAN-1 within 90 days. The period can be extended on the recommendation of
the Council for a further period not exceeding 90 days.
19. Before we deal with the challenge to Rule 117, two positions must
be borne in mind. First, there is a presumption to the legality of the statute. This
presumption also applies to a subordinate instrument. Second, both Section 140
and 117 fall in that part of the statute which deals with transitionary provision
between two regimes of taxation. In this context validity of Rule 117 has to be
examined.
20. The challenge to the time-limit under Rule 117, so far as it mandates
time-limit, being ultra vires, it has two parts. First is referring to Section 140(1) of
the Act and the rule-making power then. Second is based on Section 164 of the
Act, and the general rule-making power. The Petitioner has advanced elaborate
submission on how the rule-making power to prescribe time-limit Rule 117 does

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