Page 77 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] NELCO LTD. v. UNION OF INDIA 35
ed day. Section 140 deals with transitional arrangement of input tax credit, and
for the present topic, Section 140(1) is material.
22. According to the Petitioner, Section 140(1) confers right on a regis-
tered person to take Cenvat credit of the eligible duties in its electronic trading
ledger to be carried forward and the said right can be regulated only in such
manner as may be prescribed, and thus, regulated by framing Rules. The phrase
as may be prescribed has been judicially construed as not to include within its
ambit the prescription of limitation. On this proposition, reliance is placed on the
decision of the Supreme Court in the case of Sales Tax Officer Ponkunnam and Anr.
v. K.I. Abraham [(1967) 3 SCR 518], Bharat Barrel and Drum Mfg. Co. Ltd. v. Employ-
ees State Insurance Corporation [(1971) 2 SCC 860], CIT, Patiala v. Shri Krishen Chand
Charitable Trust [(1975) 98 ITR 387 (J & K)], Second ITO v. M.C.T. Trust [(1976) 102
ITR 138 (Madras)], CIT v. Trustees of Shri Techchand Chandiram Trust [(1990) 184
ITR 537 (Bom)] and the decision of Division Bench of Madras High Court in M/s.
Solar Works v. Employees State Insurance Corporation [AIR 1964 MAD 376]. A pe-
rusal of these decisions does indicate that the phrase “prescribed manner” has
been construed not to include within its ambit a rule-making power to prescribe
a time-limit. Different phrases have been employed in the Act such as Section 37
uses the phrase “within such time”, Section 38 uses the phrase “within such
time” as may be prescribed, Sections 25, 28, 29, 30, 32, 37, 38, 40, 43, 49, 50, 52, 53,
53A, 84, 141 also use different phrases regarding time-limit.
23. However, as stated earlier, the primary reliance of the Respondents
is on Section 164, that is the general rule-making power. Section 164 empowers
the Government to makes rules on the recommendations of the Council for car-
rying out the provisions of the Act. Without prejudice to the generality of the
provisions, it also confers powers on the Government to make rules for all or any
of the matters which by this Act are required to be, or may be, prescribed or in
respect of which provisions are to be or may be made by rules.
24. The Division Bench of Gujarat High Court in the case of Willowood
Chemicals Ltd. v. Union of India [2018 (19) G.S.T.L. 228 (Guj.)] has negatived the
contention of Rule 117(1) being ultra vires referring to Section 164 of the Act. The
criticism of the Petitioner on this approach of Gujarat High Court is that though
the Court noticed the decision of the Supreme Court in the case of K.I. Abraham, it
failed to notice that in the Supreme Court has held that imposition of the time-
limit could not be referred to the general rule-making power.
25. In the case of K.I. Abraham, the Supreme Court was considering the
Central Sales Tax Act. Reliance is placed on the observations of the Supreme
Court in the following passage :-
“4. It was contended on behalf of the appellants that the assessee had not
filed the declarations in form “C” before February 16, 1961 according to the
third proviso to Rule 6(1) and in view of the breach of this Rule the assessee
was not entitled to take advantage of the lower rate of assessment under
Section 8(1) of the Act. The opposite view-point was put forward on behalf
of the assessee and it was argued that the third proviso to Rule 6(1) was ul-
tra vires of Section 8(4) read with Section 13(4)(e) of the Act. The decision of
the question at issue therefore depends on the construction of the phrase
“in the prescribed manner” in Section 8(4) read with Section 13 of the Act.
In our opinion, the phrase “in the prescribed manner” occurring in Section 8(4) of
the Act only confers power on the rule-making authority to prescribe a rule stating
what particulars are to be mentioned in the prescribed form, the nature and value of
GST LAW TIMES  7th May 2020  77