IMPORTANT POINT
The requirement to submit TRAN-1 for claiming transitional credit under Section 140 of the CGST Act, 2017 is mandatory and cannot be bypassed.

JUDGMENT :

(Manindra Mohan Shrivastava, CJ.)

1. By way of this writ petition filed under Article 226 of the Constitution of India, the petitioner has claimed that he is entitled to transitional credit of excise duty made through Credit Transfer Document (for short, ‘CTD’) by way of filing TRAN-3 without insisting on submission of TRAN-1 declaration within the time stipulated under Rule 117 of the Central Goods and Services Tax Rules, 2017 (for short, ‘the CGST Rules, 2017’).

Relevant Factual Matrix:

2. The factual background giving rise to the present petition, relevant for decision making in the present case, is that the petitioner is a trader dealing in automobiles, motorbikes and other vehicles and registered under the GST Laws having been issued a certificate of registration on 22.09.2017. In the petition, it has been stated that the petitioner is a sub-dealer of Hero MotoCorp Ltd. and engaged in selling motorbikes after procuring them from the primary dealer of Hero MotoCorp Ltd. He being sub-dealer, was not issued direct invoices by the manufacturer- Hero MotoCorp Ltd. and instead, the invoice was issued by the Hero MotoCorp to the primary dealer capturing the incidence of excise duty. As such, the excise duty paid by the primary dealer initially came to be embed in the cost of the goods when purchased by the petitioner. The petitioner was not in possession of the documents evidencing payment of excise duty on the goods in question being sold by the petitioner as sub-dealer of Hero MotoCorp Ltd.

3. It is further averred in the petition that the petitioner being a sub-dealer of the auto manufacturers had accumulated balance of credit of excise duty on the goods purchased and held in stock as on 30.06.2017 i.e. the day immediately preceding the appointed day when the Central Goods and Services Tax Act, 2017 (for short ‘the CGST Act, 2017’) came into force on 01.07.2017. The provisions contained in Section 140 of the CGST Act, 2017 read with Rule 117 of the CGST Rules, 2017, provided for mechanism for transitional arrangements for availing input tax credit. The petitioner was not required to be registered under the erstwhile Central Excise Act, 1944 and as provided under sub-section (3) of Section 140 of the CGST Act, 2017, he was entitled to credit of excise duty on goods held in stock as on 30.06.2017. The petitioner fulfills the statutorily prescribed eligibility conditions enumerated therein.

4. It is the case of the petitioner that even though sub-rule (1) of Rule 117 of the CGST Rules, 2017, provided that every registered person entitled to take credit of input tax under Section 140, shall submit a declaration in TRAN-1 within the stipulated period of ninety days, further extendable by ninety days, even if there is unintentional failure to submit declaration within the stipulated period, the indefeasible statutory right vested under sub-section (3) of Section 140 of the CGST Act, 2017, to claim transitional credit of excise duty, could not be defeated.

5. It is the further case of the petitioner that vide notification No.21/2017, dated 30.06.2017, respondent No.1 brought into force the system of issuance of CTD by the manufacturer to the dealer, on the strength of which the corresponding dealer was authorised to claim credit of excise duty by way of filing TRAN-3. The said notification did not specify any other actionable on the part of the trader/dealer for availment of transitional credit on the strength of CTD, except to file TRAN-3. Even the CGST Rules, 2017, brought into force on 22.06.2017, did not contain any stipulation as regards co-relation with or simultaneous compliance of notification No.21/2017, dated 30.06.2017 for availment of transitional credit.

6. The petitioner having received three CTDs’ from the manufacturer- Hero MotoCorp Ltd. on 03.09.2017, filed TRAN-3 on GST portal feeding information of the aforesaid three CTDs’ for the purpose of claiming benefit of transitional credit of excise duty. However, l