The Delhi High Court has sought response of the Centre and the Goods and Services Tax (GST) Council on a Bajaj Auto dealer’s plea challenging constitutionality of a GST rule which provides a time line for filing the form to claim input tax credit.
A bench of justices S Ravindra Bhat and A K Chawla issued notice to the finance ministry and the GST Council and sought their reply to the firm’s petition by March 21, the next date of hearing.
The firm, Tara Chand Saluja and Sons, has contended in its plea that the GST Rule 117 cannot restrict the right provided under the GST Act to claim input tax credit by providing a time line for the same.
“Such restriction is unconstitutional and is also ultra-vires the GST Act,” the firm’s petition has said in its petition filed through advocate Gaurav Dudeja.
It has also claimed that a a technical error in the GST portal prevented it from getting the benefit of input tax credit as it could not file the form — GST TRAN-1 — as required under the rule in question, before the extended due date of December 31, 2017.
The firm, which is a dealer of Bajaj Auto Limited, has submitted that it was entitled to adjust its liabilities under the GST Act with the excise duty already paid on the said unsold stock worth over Rs nine crore, but an glitch in the system prevented it from claiming this benefit.
It has said that not allowing to claim the benefit of input tax credit amounts to double taxation of the same stock.
According to the petition, after the form is filed, the amount of credit specified therein would get credited to the ‘Electronic Credit Ledger’ which acts as an input tax credit bank under the GST regime against which output GST liability could be set off.
The firm has claimed that the form could not be saved on the portal owing to technical issues and that not being allowed the credit in terms of the Act was “unconstitutional, illegal, arbitrary and unreasonable”.
It has alleged that the GST Council’s official web site indicated that the due date for filing the form was extended to December 31, 2017, but the firm was not allowed to file the form afresh on December 28 on the pretext that the due date was December 27, 2017.