Page 39 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] ITC ON CENVAT CREDIT NOT MENTIONED IN THE FINAL CENTRAL EXCISE J13
of M/s. Brand Equity Treaties Limited v. Union of India - 2020-TIOL-900-HC-DEL-
GST, wherein it is held that the time-limit prescribed for availing the input tax
credit with respect to the purchase of goods and services made in the pre-GST
regime, cannot be discriminatory and unreasonable. There has to be a rationale
forthcoming and, in absence thereof, it would be violative of Article 14 of the
Constitution. The Hon’ble Court was of the view that the Cenvat credit which
stood accrued and vested is the property of the assessee and is a constitutional
right under Article 300A of the Constitution. The same cannot be taken away
merely by way of delegated legislation by framing rules, without there being any
overarching provision in the GST Act. Finally the Hon’ble High Court held that
as per their judgment in case of A.B. Pal Electricals v. Union of India - 2019-TIOL-
2930-HC-DEL-GST the credit standing in favour of the assessee is a vested prop-
erty right under Article 300A of the Constitution and cannot be taken away by
prescribing a time-limit for availing the same.
It is settled principle of law that rules and procedures are servant of law
and should not be a tyrant over the law. It is also settled principle of law that
rules and procedures are subordinate to the basic legislation, hence any proce-
dural provision which is framed for implementing the substantive provisions
should ordinarily be directory in nature. By insisting on rigid time frame for
making declaration, procedural provision is being given primary over substan-
tive provision thereby a vested right is sought to be taken away merely, declara-
tion could not be made within time even though there were genuine reasons for
it. In view of above, technicalities shall not be bar against substantive justice. The
author would like to take support from various decisions as referred below :
In case of State of Mysore & Ors. v. Mallick Hashim & Co. - AIR 1972 SC
1449, the validity of the time-limit for filing revision applications contained in
Rule 18 framed under the Mysore Sales Tax Act, 1957 came up for consideration.
The Court was of the opinion that such rule is an attempt to deny the dealers, the
refund to which they are entitled under the law or at any rate to make the en-
forcement of such right unduly difficult.
In case of Sambhaji & Ors. v. Gangabai & Ors. - 2009 (240) E.L.T. 161 (S.C.),
by referring to a three-judge Bench decision of the Supreme Court in case of Sa-
lem Advocate Bar Association v. Union of India - AIR 2003 SC 189, held that time-
limit of ninety days provided in Rule 1 of Order VIII of CPC is directory in na-
ture, it was observed that the procedural law is not to be a tyrant but a servant,
not an obstruction but an aid to justice.
In case of Mangalore Chemicals & Fertilizers Limited v. Deputy Commissioner
- 1991 (55) E.L.T. 437 (S.C.), it was observed that while interpreting condition for
exemption, a distinction had to be made between the procedural condition of a
technical nature and a substantive condition. For the same purpose, reference
was also made to the decision of the Supreme Court in case of Commissioner of
Customs & Excise, Madras v. Home Ashok Leyland Limited - 2007 (210) E.L.T. 178
(S.C.). In this context, reliance was placed on a decision of Supreme Court in case
of State of Himachal Pradesh & Ors. v. Gujarat Ambuja Cement Limited & Anr. -
(2005) 142 STC 1 (SC).
In case of Samtel India Ltd. v. CCE, Jaipur - 2003 (155) E.L.T. 14 (S.C.), it
was held that the right to credit accrued to an assessee on the date the tax on in-
puts was paid. Once the inputs were used, the Rule imposing a period of limita-
tion, could not be given retrospective effect.

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