Page 50 - GSTL_2nd July 2020 _Vol 38_Part 1

Input Tax Credit (ITC) — Limitation for taking Transitional
credit mentioned in Rule 117 of CGST Rules,
whether Directory or Mandatory? Apex Court stays
High Court’s Order holding in Directory
The Supreme Court Bench comprising Hon’ble Mr. Justice A.M.
Khanwilkar, Hon’ble Mr. Justice Dinesh Maheshwari and Hon’ble Mr. Justice
Sanjiv Khanna on 19-6-2020 issued notice in the Petition for Special Leave to
Appeal (C) Nos. 7425-7428 of 2020 filed by Union of India against the Judgment
and Order dated 5-5-2020 of Delhi High Court in W.P. (C) Nos. 11040 of 2018,
196, 8496 & 13203 of 2019 as reported in 2020 (38) G.S.T.L. 10 (Del.) (Brand Equity
Treaties Limited v. Union of India). While issuing the notice, the Supreme Court
passed the following order :
“Issue notice.
To be heard along with S.L.P. (C) No. 26626 of 2019 and S.L.P. (C) D.
No. 38404 of 2019.
In the meantime, the operation of the impugned order shall remain
stayed.”
The Delhi High Court in its impugned order had held that sub-rule (1A)
of Rule 117 of Central Goods and Services Tax Rules, 2017 restricting date for
submission of Form GST TRAN-1 only till 31st March, 2019, that too only for
those registered persons who could not submit declaration by due date on ac-
count of “technical difficulties” on common portal is robbing of valuable right on
unreasonable and unfounded basis for those dealers who could not file said
Form otherwise. Time-limit of 90 days mentioned in rule ibid is unreasonable
and discriminatory inasmuch as civil rights can be enforced within a period of
three years. Further, right of availing transitional ITC is a constitutional right of
assessee, it being his property. Same cannot be taken away merely by way of del-
egated legislation by framing rules, without there being any overarching provi-
sion in Act. Therefore this time-limit is only Directory and not Mandatory. High
Court directed that since this right cannot be given in perpetuity, all dealers who

GST LAW TIMES  2nd July 2020  50