1. Petitioner has made following substantive prayers in this petition:

“(a) Your Lordships may be pleased to issue writ of declaration and/or any other appropriate writ(s) declaring Rule 117 of the Central Goods and Services Tax Rules, 2017 and Form GST Tran1 as ultra vires to Section 140(5) and Section 164 of the Central Goods and Services Tax Act, 2017 and also offends Article 14, Article 19(1)(g), Article 265 and Article 300A of the Constitution of India, 1950;

(b) Your Lordships may be pleased to issue writ of declaration and/or any other appropriate writ(s) declaring Section 164 of the Central Goods and Services Tax Act, 2017 as unconstitutional as it suffers from vice of excessive delegation;

(c) Your Lordships may be pleased to issue writ(s), direction(s) and/or pass necessary order(s) directing the respondents to allow rectification of GST – Tran1, to enable credit of carry forward of Credit on eligible duties of goods and services in transit in electronic credit ledger in terms of Section 140(5) of the Central Goods and Services Tax Act, 2017, either by opening of GSTN portal or to allow it to be filed manually;”

2. In view of the judgment of Division Bench of this Court in case of Willowood Chemicals Pvt. Ltd. v. Union of India dated 12th/19th September 2018, in Special Civil Application No.4252 of 2018, learned counsel for the petitioners stated that he is not pressing prayers (a) and (b) noted above.

3. He however pressed prayer( c) which arises in following factual background.

4. Petitioner no.1 is a company registered under the Central Goods and Service Tax Act, 2017 (‘CGST Act’ for short) as well as Gujarat Goods and Service Tax Act, 2017 (‘GGST Act’ for short). With the advent of Goods and Service Tax regime, certain transitional arrangements were made under the statute requiring the dealers and manufacturers to make declarations of the unutilised past tax credits, only upon which, the same would be migrated to the new regime. One of them was a declaration in terms of section 140 of CGST Act which is referred to as TRAN1. Initial time granted under the said provision for making such declaration was three months from the date of bringing the statute into existence i.e. 01.07.2017. Under representations, this time limit was extended from time to time. Final extension was granted till 27.12.2017.

5. The time limit provisions contained in rule 117 of the respective rules came to be challenged before this Court in case of Willowood Chemicals Pvt. Ltd. (supra). Petitioner therein had challenged section 140(5) of the CGST Act also. Both these challenges were repealed by the High Court by the said judgment.

In such judgment, it was noticed that the Government had amended rule 117 providing for limited extension of time for filing TRAN1 declarations with the permission of the concerned Commissioner if previously within the time granted, the same could not be done on account of technical glitches on the official portal.

6. Case of the petitioner is that such TRAN1 was actually filed within the time originally permitted. After the time limit was over, the petitioner noticed certain errors in the declaration made. Three transactions which were in pipeline when the GST was brought into force, due to oversight, were not included in such declaration. The petitioner therefore desires that such declaration TRAN1 may be permitted to be corrected.

7. Counsel for the petitioner submitted that the statutory provisions concerning filing of the returns envisage scope for correction of the returns, for which, time is granted upto the due date for filing the returns. He submitted that during the transitory period, number of changes took place. It was legitimate that some of the transactions may have been overlooked by the assessees. Not granting opportunity to correct the declaration would result into substantial financial loss to the petitioner and other similarly situated dealers. Counsel relied on the decisions of Supreme Court in case of Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and Ors. reported in AIR 1987 SC 1023 and in case of Kailash Chandra and Ors. v. Mukundi Lal and Ors. reported in AIR 2002 SC 829 to contend that the statute must be read as a whole and harmonious interpretation of the provision should be granted. His attempt was therefore to persuade us to apply the provisions for correction of returns to the situation where TRAN1 declaration may have been incorrectly filed. He also drew our attention to an interim order passed by the Bombay High Court on 26.09.2018 in Writ Petition No.2086 of 2018 in case of O/E/N India Ltd. & Anr. v. Union of India & Ors. in which, various recommendations were made to enable the petitioner to correct TRAN1 declaration where the figure of CENVAT credit available was shown as ₹ 11,10,555/instead of ₹ 1,11,05,550/in exercise of powers under section 172 of the CGST Act.

8. On the other hand, learned counsel Shri Ankit Shah for the department opposed the petition contending that this Court in case of Willowood Chemicals Pvt. Ltd.(supra) has examined the time limit provisions contained in the transitional chapter and found that the same cannot be lightly extended. He submitted that the petitioner had time upto 27.12.2017 to make a declaration which would include the opportunity to correct a declaration already made if any error was spotted.

9. This Court in case of Willowood Chemicals Pvt. Ltd.(supra) had occasion to examine the scheme under the GGST Act and CGST Act. The transitional provision and in particular of filing TRAN1 declarations and the time limit provisions contained in respect thereof. The challenge of the petitioner in the said case to the time limit provision was mainly twofold. Firstly, that the subordinate legislature did not have the authority to prescribe time limit which was not envisaged in the parent Act and secondly, that in any case such time limit provision should be seen as directory and not mandatory. The Court rejected both the contentions and upheld the time limit prescribed under rule 117 of the Rules.

10. The Court, in the process, made following observations:

“24. It is in exercise of this rule making power, the Government has framed the CGST Rules, 2017 in which; as noted, subrule (1) of Rule 117 has prescribed, besides other things, the time limit for making declaration in the prescribed form for every dealer entitled to take credit of input tax under Section 140. Subrule [1] of Rule 117 thus applies to all cases of credits which may be claimed by a registered person under section 140 of the Act and is not confined to subsection [3]. This plenary prescription of time limit within which necessary declarations must be made is, in our opinion, neither without authority nor unreasonable.

25. Section 140 of the Act envisages certain benefits to be carried forward during the regime change. As is wellsettled, the reduced rate of duty or concession in payment of duty are in the nature of an exemption and is always open for the legislature to grant as well as to withdraw such exemption. As noted in case of Jayam & Company [Supra], the Supreme Court had observed that input tax credit is a form of concession provided by the legislature and can be made available subject to conditions. Likewise, in the case of Reliance Industries Limited [Supra], it was held and observed that how much tax credit has to be given and under what circumstances is a domain of the legislature. In case of Godrej & Boyce Mfg. Co. Pvt. Limited [Supra], the Supreme Court had upheld a rule which restricts availment of MODVAT credit to six months from the date of issuance of the documents specified in the proviso. The contention that such amendment would take away an existing right was rejected.

26. While the entire tax structure within the country was thus being replaced by a new framework, it was necessary for the legislature to make transitional provisions. Section 140 of the CGST Act, which is a transitional provision, essentially preserves all taxes paid or suffered by a dealer. Credit thereof is to be given in electronic credit register under the new statute, only subject to making necessary declarations in prescribed format within the prescribed time. As noted, subsection [1] of Section 164 of the CGST Act authorizes the Government to make rules for carrying out the provisions of the Act on recommendations of the Council. Subsection [2] of Section 164 further provides that without prejudice to the generality of the provisions of subsection [1], the Government could also make rules for all, or any of the matters, which by this Act are required to be or may be prescribed or in respect of which, provisions are to be or may be made by the rules. Combined effect of the powers conferred to subordinate legislature under subsections [1] and [2] of Section 164 of the CGST Act would convince us that the prescription of time limit under subrule [1] of Rule 117 of the CGST Rules is not ultra vires the Act. Likewise, such prescription of time limit cannot be stated to be either unreasonable or arbitrary. When the entire tax structure of the country is being shifted from earlier framework to a new one, there has to be a degree of finality on claims, credits, transfers of such credits and all issues related thereto. The petitioners cannot argue that without any reference to the time limit, such credits should be allowed to be transferred during the process of migration. Any such view would hamper the effective implementation of the new tax structure and would also lead to endless disputes and litigations. As noted in case of USA Agencies [Supra], the Supreme Court had upheld the vires of a statutory provision contained in the Tamil Nadu Value Added Tax Act which provided that the dealer would have to make a claim for input tax credit before the end of the financial year or before ninety days of purchase; whichever is later. The vires was upheld observing that the legislature consciously wanted to set up the time frame for availment of the input tax credit. Such conditions therefore must be strictly complied with. Thus, merely because the rule in question prescribes a time frame for making a declaration, such provision cannot necessarily be held to be directory in nature and must depend on the context of the statutory scheme.

27. Issue can be looked at from slightly different angle. Granting tax credit is an integral part of computation and collection of tax. Tax collection is an important element of budgetary allocations and estimation of the Union and the States. Such consideration of tax credits at such large scale cannot be allowed to linger on indefinitely which would have a direct effect on the tax collection, estimates and budgetary allocations and in turn, revenue deficit.

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32. Thus, in the economic matters of such vast scale, the wider considerations of the State exchequer, while interpreting a statutory provisions cannot be kept out of purview. Quite apart from independently finding that the time limit provisions contained in subrule (1) of Rule 117 of the CGST Rules is not ultra vires the Act or the powers of the rule making authority, interpreting such powers as merely directory would give rise to unending claims of transfer of credit of tax on inputs and such other claims from old to the new regime. Under the new GST laws, the existing tax structure was being replaced by the new set of statutes, through an exercise which was unprecedented in the Indian context. The claims of carry forward of the existing duties and credits during the period of migration, therefore, had to be within the prescribed time. Doing away with the time limit for making declarations could give rise to multiple largescale claims trickling in for years together, after the new tax structure is put in place. This would besides making the task of matching of the credits impractical if not impossible, also impact the revenue collection estimates. It is in this context that the Supreme Court in the case of Mafatlal Industries Limited (Supra), after rejecting the contention that a person can move proceedings for recovery of tax paid upon success of some other person before the Tribunal or Court in getting such tax collection declared illegal, was further influenced by the fact that any such situation could lead to utter chaos, if the claims are large. Under the circumstances, we do not find any substance in the petitioners’ challenge to rule 117 (1) of the CGST Rules as well as GGST Rules.”

11. Under the circumstances, we do not see any scope for directing the respondents to allow the petitioner to correct the TRAN1 declaration already made. We may recall, such time limit initially provided in the rules was extended from time to time and lastly upto 27.12.2017. Further, limited extension has been granted to cover cases where genuine hardships were felt in uploading said declarations due to technical glitches.

12. The case of Bombay High Court in case of O/E/N India Ltd. & Anr. (supra) was very different. The petitioner had pointed out a typographical error in filling up figure of unused CENVAT credit available, the Court was of the opinion that said mere typographical error should not be the governing factor for deciding substantive rights. The Court primafacie felt that section 172 of the Act which enables the Government to take necessary decision to avoid hardships could be utilized. The present situation is entirely different.

13. In the result, petition is dismissed.