Page 83 - GSTL_6th August 2020_Vol 39_Part 1

2020 ] P.R. MANI ELECTRONICS v. UNION OF INDIA 9
ents 1 and 2; and Mr. Mohamed Shaffiq, the Learned Special Government Plead-
er (Taxes) for Respondents 3 and 4.
8. The principal contention of the Learned Counsel for the Petitioner
was that Rule 117 of the CGST Rules does not impose a mandatory obligation on
registered persons, such as the Petitioner, to file Form GST TRAN-1 within the
prescribed period. As a corollary, a person does not lose the right to ITC upon
default in submitting the declaration in time. Although a constitutional challenge
is made in the writ petition, the Learned Counsel conceded that such constitu-
tional challenge was not being pressed. Nonetheless, the Learned Counsel sub-
mitted that Rule 117 is ultra vires Section 140 of the CGST Act and, at a minimum,
is liable to be construed as a directory provision in so far as it specifies a time-
limit for the submission of the declaration in Form GST TRAN-1. In support of
this contention, the Learned Counsel pointed out that the tax authorities were
fully cognizant of the fact that registered persons were unable to submit the
online declaration within the prescribed period on account of technical glitches.
This is evident from the fact that the time-limit was subsequently extended by
inserting sub-rule (1A) in Rule 117 whereby the Commissioner was permitted,
subject to the recommendation of the GST Council, to extend the date for submit-
ting the declaration electronically by a further period up to 31-3-2020. The
Learned Counsel contended that the said provision itself states that it is intro-
duced so as to enable the submission of the declaration by persons who could
not submit the same within the previously prescribed time-limit on account of
technical difficulties in the common portal. As per the Learned Counsel, this
clearly indicates that the provision is intended to be directory and not mandatory
notwithstanding the use of the word “shall” in Rule 117(1). In order to further
buttress his submissions, the Learned Counsel relied upon a judgment of the Di-
vision Bench of the Delhi High Court in Micromax Informatics Ltd. v. Union of In-
dia, WP (C) No. 196 of 2019 (Micromax Informatics) [2020 (38) G.S.T.L. 10 (Del.)],
wherein Rule 117 was construed as directory and not mandatory.
9. On the contrary, the Learned Additional Solicitor General submitted
that ITC is in the nature of a concession granted to registered persons and, there-
fore any conditions, including time-limits, subject to which such concessions are
granted should be enforced strictly. In other words, concessions cannot be
availed of unless the conditions relating thereto are fully complied with.
10. The Learned Special Government Pleader (T) also contended that
ITC is a concession and not a vested right. In support of this proposition, he re-
ferred to and relied upon the judgment of the Hon’ble Supreme Court in Jayam
and Company v. Assistant Commissioner and Another, (2016) 15 SCC 125 (Jayam) =
2018 (19) G.S.T.L. 3 (S.C.), wherein it was held categorically, in the context of the
TNVAT Act, that ITC is a concession. In Jayam, he pointed out that the Supreme
Court further held that the conditions subject to which such concession is grant-
ed should be strictly complied with in order to avail such concession. He also
pointed out that this principle was reaffirmed in the recent judgment of the
Hon’ble Supreme Court in ALD Automotive Private Limited v. Commercial Tax
Officer, now upgraded as Assistant Commissioner (CT) and Others, (2019) 13 SCC 225
(ALD Automotive) = 2018 (364) E.L.T. 3 (S.C.). In this judgment, the Hon’ble
Supreme Court reiterated that ITC is a concession, which can only be availed of
by the beneficiary as per the terms and conditions specified in the statute. More
importantly, he pointed that the Supreme Court held in ALD Automotive that the

GST LAW TIMES  6th August 2020  83