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GST – Section 140 of the CGST Act, 2017 - Interpretation of Rule 117 of the CGST Rules, 2017 - Time Limit for claim of Transitional Credit, TRAN-1 declaration, Procedural Requirements vs Substantive Right - Petitioner claimed to be eligible for transitional input tax credit under Section 140(3) of the CGST Act, 2017. However, the petitioner failed to submit the statutory TRAN-1 declaration within the prescribed time limit under Rule 117 of the CGST Rules, 2017 - Whether the requirement of submitting the TRAN-1 declaration within the prescribed time limit is a mere procedural requirement that cannot defeat the petitioner's substantive right to claim transitional input tax credit under Section 140(3) of the CGST Act, 2017 – HELD - the prescription of time limit under Rule 117 of the CGST Rules, 2017 is not merely a provision of Rule framed by the Rule making authority but it is also a statutory mandate, as contained in sub-section (3) of Section 140 of the CGST Act, 2017 - prescription of time limit for submission of statutory declaration in TRAN-1 for verification of eligibility in terms of the provisions contained in the Act, cannot be said to be beyond the rule making power, much less inconsistent with the enabling Act - As a matter of law, non-prescription of specified period for submitting appropriate declaration in statutory form TRAN-1 would have been in contravention of statutory prescription contained in sub-section (3) of Section 140 of the CGST Act, 2017 - the requirement of submitting the TRAN-1 declaration within the prescribed time limit is not a mere procedural requirement, but a substantive condition precedent to claim the transitional input tax credit under Section 140(3) of the CGST Act, 2017 – The submission by the petitioners that provision under Rule 117 of the CGST Rules, 2017, requiring submission of declaration in TRAN-1, is merely processual and not a substantive provision and, therefore, not mandatory, cannot be accepted - The legislative policy as well as the provisions contained in Rule 117(2), both seek to achieve the objective of timely submission of claim for transitional credit by submitting the statutory declaration in TRAN-1. Therefore, the provision has to be read as mandatory, rather directory - the petitioner's failure to submit the TRAN-1 declaration within the prescribed time limit disentitled him from claiming the transitional input tax credit - the Court differs with view taken by the Gujarat High Court in the case of Siddharth Enterprises Vs. The Nodal Officer and agree with the view taken by the Bombay High Court in the case of JCB India Limited Vs. Union of India & Ors. – the writ petition is dismissed - Interpretation of Rule 117(2) of the CGST Rules, 2017 - the provision under Rule 117(2) of the CGST Rules, 2017, requiring submission of statutory declaration in form TRAN-1, is not by virtue of rule making power alone. Such a requirement is mandated under the substantive provision contained in sub-section (3) of Section 140 of the CGST Act, 2017. The use of expression “within such time and in such manner as may be prescribed” leave no discretion with the Rule Making Authority to provide or not to provide time limit for submission of statutory declaration. The Rule Making Authority has to frame rule to carry out the object and purpose of the Act in exercise of its rule making power. Therefore, it was absolutely mandatory for the Rule Making Authority to prescribe the period of limitation for submitting statutory declaration. As to what should be the period within which such submission should be made and whether there should be a provision for further extension, and if so, in what circumstances and in what matter, was left by the legislature to be provided by the Rule Making Authority. Such a provision in a fiscal statute providing for time limit within which statutory limitation to avail credit is made, is not merely procedural but not only substantive but mandatory also.
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