The Hon’ble Delhi High Court vide its order and judgment dated 05.05.2020, in the matter of Brand Equity Treaties Limited and Ors (various petitions were allowed through common order), has read down the provisions (Rule 117 of the CGST Rules, 2017) and held that period of 90 days for claiming input tax credit in TRAN-1 is directory in nature and therefore, the same would not result in the forfeiture of the rights, in case credit is not availed within the time prescribed.  It further held that in absence of any specific provisions under the Act, period of limitation of 3 years under the Limitation Act would apply. Accordingly, the Hon’ble High Court directed the Department to allow all assesses to claim input tax credit in TRAN-1 by 30.6.2020.

It is relevant to mention here that vide Section 128 of Finance Act, 2020, retrospective amendments were proposed in Section 140 of CGST Act w.e.f. 01.07.2017, to prescribe the manner and time limit for taking transitional credit. As per Section 1(2) (b) of the Finance Act, 2020, the provisions of Section 128 of the Finance Act shall come into force from such date as the Central Government may, by notification in the Official Gazette, appoint.

Now, the Central Government vide Notification No. 43 / 2020 – Central Tax dated 16.05.2020 has appointed 18th day of May, 2020, as the date on which the provisions of Section 128 of the said CGST Act, 2017 shall come into force.

Though the Hon’ble Delhi High directed to publicise the judgment widely including by way of publishing the same on their website so that others who may not have been able to file TRAN-1 till date are permitted to do so on or  before 30.06.2020, however, on the contrary, the Central Government has issued Notification No. 43/2020, which could reverse the benefit granted by the High Court.

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