Page 85 - GSTL_6th August 2020_Vol 39_Part 1

2020 ] P.R. MANI ELECTRONICS v. UNION OF INDIA 11
12. It is a trite law that whenever concession is given by statute or
notification, etc. the conditions thereof are to be strictly complied with in
order to avail such concession. Thus, it is not the right of the “dealers” to
get the benefit of ITC but it is a concession granted by virtue of Section 19.
As a fortiori, conditions specified in Section 10 must be fulfilled. In that hue,
we find that Section 10 makes original tax invoice relevant for the purpose
of claiming tax. Therefore, under the scheme of the VAT Act, it is not per-
missible for the dealers to argue that the price as indicated in the tax invoice
should not have been taken into consideration but the net purchase price af-
ter discount is to be the basis. If we were dealing with any other aspect de
hors the issue of ITC as per Section 19 of the VAT Act, possibly the argu-
ments of Mr. Bagaria would have assumed some relevance. But, keeping in
view the scope of the issue, such a plea is not admissible having regard to
the plain language of sections of the VAT Act, read along with other provi-
sions of the said Act as referred to above.”
14. The judgment in ALD Automotive (cited supra) dealt with the ques-
tion whether the time-limit in Section 19(11) of TNVAT is mandatory or directo-
ry. Paragraph 45 thereof is as under :
“45. This Court in the above case clearly laid down that whether
particular provision is mandatory or directory has to be determined on the
basis of the object of the particular provision and design of the statute. The
period of 10 days in submitting the report of the public analyst was held to
be directory for the reason that on the negligence of those to whom public
duties are entrusted no one should suffer. Such interpretation should not be
put which may promote the public mischief and cause public inconven-
ience and defeat the main object of the statute. The interpretation of Rule
9(j) in the above case was on its own statutory scheme and has no bearing
in the present case. We, thus, are of the view that time period as provided
in Section 19(11) is mandatory.”
The said Section 19(11) also pertains to the time-limit for claiming ITC and uses
the word “shall”. After examining the language of Section 19(11) and the context,
including the object and design of the statute, the Hon’ble Supreme Court con-
cluded that the time-limit specified in Section 19(11) is mandatory.
15. The validity and the mandatory or directory nature of Section 140
of the CGST Act and Rule 117 of the CGST Rules were considered in several
High Court judgments and we propose to discuss them briefly before drawing
definitive conclusions. In Blue Bird Pure Pvt. Ltd. v. Union of India [2019 SC Online
Del 9250] (Blue Bird) = 2019 (29) G.S.T.L. 660 (Del.), a Division Bench of the Delhi
High Court directed the tax authorities to open the on line portal so as to enable
the electronic filing of Form GST TRAN-1 or accept the manually filed form. The
said decision was based on earlier judgments of the Delhi High Court wherein it
was observed that the GST system is in a “trial and error phase”. A subsequent
judgment of the Division Bench of the Delhi High Court in SKH Sheet Metals
Components v. Union of India [2020 SCC Online Del 650] (SKH Sheet Metals) exam-
ined the concept of ITC and observed that an uninterrupted and seamless chain
of ITC is the heart and soul of GST so as to avoid cascading of taxes. In the said
judgment, the mandatory or directory nature of Rule 117 was considered and the
Court concluded that it is directory both on the basis that the CGST Act does not
specify the consequences of not complying with the time-limit and because con-
struing it as mandatory would prejudice the assessee. In drawing this conclusion,
the Court relied on the judgment of the Delhi High Court in Brand Equity Treaties
GST LAW TIMES  6th August 2020  85