Taxpayer's right to carry forward GST credit upheld, emphasizing vested rights over procedural hurdles.

The court upheld the petitioner's right to carry forward unutilized credit under the GST regime, emphasizing that this right is vested and cannot be denied on procedural or technical grounds. It directed the respondents to allow the petitioner to file or revise the GST TRAN-1 form by a specified date, ensuring that technicalities do not hinder taxpayers' legitimate rights. The decision aligns with previous judgments recognizing the importance of upholding vested rights and avoiding arbitrary denials.

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Issues Involved:
1. Right to carry forward unutilized credit under GST regime.
2. Procedural and technical grounds for denying transitional credit.
3. Arbitrariness and violation of constitutional rights.
4. Extension of time for filing/revising GST TRAN-1 forms.

Detailed Analysis:

1. Right to Carry Forward Unutilized Credit under GST Regime:
The petitioner sought relief to carry forward unutilized credit of duties/taxes paid under erstwhile taxing statutes into the new GST regime. The court emphasized that the right to carry forward such credit is a vested right and cannot be denied on procedural or technical grounds. This aligns with the judgment in the case of Adlfert Technologies Pvt. Ltd., where it was held that unutilized credit is a vested right and should not be taken away due to procedural issues.

2. Procedural and Technical Grounds for Denying Transitional Credit:
The court observed that the GST regime, being electronic-based, posed challenges for many individuals unfamiliar with the electronic filing system. The possibility of mistakes in filing forms like TRAN-1 was acknowledged. The court referred to the judgment in Siddharth Enterprises, which held that denying credit due to procedural lapses violates Articles 14 and 300A of the Constitution of India. The court reiterated that procedural requirements should not lead to the deprivation of vested rights.

3. Arbitrariness and Violation of Constitutional Rights:
The court highlighted that arbitrary actions by the state, such as denying the right to carry forward credit due to missed deadlines, violate Article 14 of the Constitution, which ensures equality before the law. The court cited the Supreme Court's view that arbitrariness negates equality and is therefore unconstitutional. The legitimate expectation of businesses to carry forward and utilize CENVAT credit was recognized, and any action contrary to this expectation was deemed arbitrary and unreasonable.

4. Extension of Time for Filing/Revising GST TRAN-1 Forms:
The court directed the respondents to allow the petitioner to file or revise the TRAN-1 form either electronically or manually by a specified date. It was noted that the absence of a specific time frame in Section 140 of the CGST Act and the introduction of Rules 117(1A) and 120A support the extension of time for filing such forms. The court found no reason to differ from previous judgments that allowed similar relief and emphasized that technicalities should not hinder the legitimate rights of taxpayers.

Conclusion:
The writ petition was disposed of with directions to the respondents to permit the petitioner to file or revise the TRAN-1 form by the stipulated date, ensuring that the petitioner's right to carry forward unutilized credit is upheld. The court's decision aligns with previous judgments that recognize the vested right to transitional credit and the need to avoid arbitrary and procedural denials.

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