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Madras HC issues Notice to GST Commissioner for various TRAN issues

  • | Divita S Gupta

Madras HC issues Notice to GST Commissioner for various TRAN issues

The Madras High Court has issued a notice to the Commissioner and Assistant Commissioner of Central Excise and GST for various TRAN issues. In the writ petitions, the constitutional validity of the retrospective amendment to Section 140 of the Central Goods and Services Tax Act, 2017 (CGST Act) and Rule 117 of the CGST Rules were challenged. The Counsel for the writ petition has sought to distinguish the said judgment on two grounds viz. the availment, transition and utilisation of ITC should be distinguished and once ITC is availed by complying with all conditions, a vested right accrues in favour of the assessee. Consequently, such vested right of ITC cannot be divested by a subsequent enactment. The petitioner also contended that Section 174(2)(c) of the CGST Act protects such vested rights and that the petitioner has relied upon CENVAT Rules, 2004, specifically, Rule 14, which provides that CENVAT credit can only be taken away when it has been wrongly availed.

The Madras High Court bench issued a notice to the Commissioner and Assistant Commissioner asking for clarification over various TRANS issues including - whether ITC is a vested right and therefore, whether the imposition of a time limit for transitioning or utilisation thereof is constitutionally impermissible. The Madras High Court also asked whether the time limit imposed in Rule 117 of the CGST Rules is mandatory and whether Section 140 of the CGST Act divests the assessee of an alleged vested right or whether it prescribes conditions relating to the enforcement of such right. Finally, the bench asked if the assessee has a legitimate expectation that the ITC availed should be permitted to be transitioned to the new tax regime without imposing a time limit and whether the deprivation of the benefit of transitional ITC would lead to double taxation.

The hearing for the same is dated for September 18th, 2020. 


Avalara helps businesses of all sizes get GST return filing, e-way bill generation and e-invoicing right with cloud-based GST compliance solutions in India. Goods and Services Tax (GST) rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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