Whether Transitional Credit is a vested right-Two Recent Judgement by Himachal Pradesh High Court and Rajasthan High Court and Story unfurls itself
The question whether Transitional Credit is a vested right or not has been a matter of litigation and seems that the dust would not be settled in the very near future. We have plethora of judgements in recent months Adfert Technologies Pvt. Ltd. v. Union of India & Ors. (Punjab & Haryana High Court) and SLP against the said order dismissed by Hon’ble Supreme Court on 28th February 2020, Rishi Graphics Private Limited Vs Union of India (Calcutta High Court).
Two New Judgements are now added to the List which were delivered by Himachal Pradesh High Court and Rajasthan High Court as recently as 12th March 2020 and 18th March 2020 respectively. In the first case, Himachal Pradesh High Court upheld the claim of applicant treating Transitional Credit as vested Right and Filing of TRAN-1 as procedural requirement and in second case, Rajasthan High Court denied the credit considering the theory of vested rights and the implication of limitation on the said aspect of vested right.
a) M/S Mahavir Motors, M/S Vishwakarma Auto V State of Himachal Pradesh And Others (Himachal Pradesh High Court)-Dated 12th March 2020
Any credit, which is admittedly due to the petitioners, cannot be denied to them on account of procedural wrangles as well as on account of system failure & glitches in the system without their being any fault on the part of the petitioners. Relying upon the ratio of the judgments cited supra and in view of the factual position, which is not disputed by learned Advocate General, the present writ petition is disposed of by directing the respondents to allow the petitioner to file Form GST TRAN-1 either electronically or manually on or before 31.03.2020.
b) M/S. Shree Motors V/s Union of India (Rajasthan High Court)- Dated 18th March 2020
The theory of vested rights and the implication of limitation on the said aspect of vested right has been considered by Hon’ble Supreme Court in the case of Osram Surya (P) Ltd. (supra), wherein, while considering the proviso II to Rule 57G of the Act of 1944 it was laid down that by providing limitation the statute has not taken away any of the vested rights, which accrue to the manufacturers and what is restricted is the time, within which, the manufacturer has to enforce that right and, therefore, once the provisions of Rule 117 of the CGST Rules, which prescribe limitation has been upheld, the plea raised pertaining to the denial of vested right on account of petitioners failing to submit/file Form GST TRAN-1 in time cannot be countenanced.
This is neither the first page and surely nor the last page in the ongoing saga of Transitional Credit. Let’s wait for the further pages of story to unfold and seems that the dust is far from settled and end is not in the near future.