Aarti Industries Ltd. VS Union of India Court: High Court of Gujarat

Mr. Jainish Shah, the learned advocate for the petitioner, presented arguments in a case wherein the petitioner has raised several prayers. The primary prayer entails directing the respondents to transmit a sum of Rs. 43,73,628/- (Rupees Forty Three Lakhs Seventy Three Thousand Six Hundred and Twenty Eight only) towards the unutilized accumulated CENVAT credit balance of the Education Cess and Secondary & Higher Education Cess. This transmission is to be facilitated by allowing the petitioners to manually file Form GST TRAN-1.

The petitioner, represented by Mr. Jainish Shah, presents a petition with two main prayers before the court:

They request the respondents to transmit Rs. 43,73,628 towards the unutilized accumulated CENVAT credit balance of the Education Cess and Secondary & Higher Education Cess by allowing manual filing of Form GST TRAN-1.

They also seek a direction for the respondents to credit the same amount directly into the Electronic Credit Ledger of the petitioner.

The background of the case reveals that between 6.7.2017 to 31.7.2017, the petitioner filed Form ER-1 Returns for June 2017 concerning its nine manufacturing units. The Goods and Services Tax (GST) regime was implemented from 1.7.2017. The petitioner filed GST Tran-1 for the nine manufacturing units during the transition period and received credit in the Electronic Credit Ledger. However, they were unable to avail credit for Educational Cess and Secondary and Higher Secondary Education Cess during this process.

The petitioner claims that an amount of Rs. 47,73,628 remains unutilized and has not been credited to their Electronic Credit Ledger. Therefore, they request the court to compel the respondents to transmit the said amount as prayed for in their petition.

The petitioner, represented by learned advocate Mr. Jainish Shah, presents a case seeking relief from the court regarding unutilized accumulated CENVAT credit balance of Education Cess and Secondary & Higher Education Cess. The prayers include directing the respondents to transmit Rs. 43,73,628/- towards the mentioned credit balance either by allowing manual filing of Form GST TRAN-1 or by directly crediting it into the petitioner’s Electronic Credit Ledger.

The facts of the case indicate that between 6.7.2017 to 31.7.2017, the petitioner filed Form ER-1 Returns for the month of June 2017 for its nine manufacturing units, just as the Goods and Services Tax (GST) regime came into effect on 1.7.2017. The petitioner filed GST Tran-1 for the nine manufacturing units and received credit in the Electronic Credit Ledger, except for the Educational Cess and Secondary and Higher Secondary Education Cess.

The petitioner claims that Rs. 47,73,628/- of unutilized accumulated CENVAT credit balance towards the mentioned tax and cess has not been credited into their Electronic Credit Ledger. Thus, the petitioner seeks a directive for the respondents to transmit the said amount.

Furthermore, the petitioner aims to file ‘Form GST Tran-I’ to claim eligible duties of CENVAT/Input Tax Credit concerning Service Tax, Central Excise, and Gujarat Value Added Tax on the appointed day, i.e., 30.6.2017, as per Section 140 of the Goods and Services Tax Act, 2017 read with Rule 117 of the Central Goods and Services Tax Rules, 2017. The petitioner argues that the due date specified under the said Rule for claiming the transitional credit is procedural and thus should be considered directory rather than mandatory. Consequently, the petitioner seeks permission to file GST Tran –I electronically or manually to claim the CENVAT/Input Credit.

The learned advocate for the petitioner acknowledges that the issues raised in the petition have been addressed by the Apex Court in the case of Union of India and another vs. Filco Trade Centre Pvt. Ltd and another in Special Leave to Appeal No. 32709–327010 of 2018, along with allied matters decided on 22.07.2020.

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