Transitional GST credit cannot be denied by rigid filing rules where technical difficulties prevented timely TRAN-I submission.

Rule 117(1A) of the Haryana GST Rules, 2017 is discussed as a procedural restriction that should not be applied to defeat accrued transitional credit where a taxpayer could not file TRAN-I within time because of GST filing difficulties. The Punjab and Haryana High Court treated denial of unutilised pre-GST credit on that basis as arbitrary and discriminatory, and as inconsistent with equality and protection of property, while declining to strike down the rule itself. It recognised relief permitting upload of TRAN-I or, if necessary, claim of input tax credit in GSTR-3B, subject to verification of the claim's genuineness.

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Issues: Whether Rule 117(1A) of the Haryana GST Rules, 2017 could be applied so as to deny the petitioner the facility of uploading TRAN-I and carrying forward eligible transitional credit, and whether the petitioner was entitled to the consequential relief.

Analysis: The petition was decided in the backdrop of earlier decisions holding that taxpayers should not be denied transitional credit merely because of technical difficulties in the GST regime. The restriction in Rule 117(1A), as applied in the present case, was treated as an unreasonable and discriminatory barrier where the petitioner asserted inability to file TRAN-I within time. The Court declined to strike down the rule, but held that the petitioner's accrued credit could not be denied in the circumstances. The denial of unutilized credit on the basis of the filing difficulty was treated as offending the guarantees of equality and protection of property.

Conclusion: The petitioner was held entitled to upload TRAN-I and, failing that, to avail the claimed input tax credit in GSTR-3B, subject to verification of the genuineness of the claim.

Final Conclusion: The petition succeeded and the petitioner obtained relief for transition of eligible credit under the GST regime without the rule being declared invalid.

Ratio Decidendi: Transitional credit that has accrued under the pre-GST regime cannot be denied by an unduly restrictive application of procedural rules where such denial would be arbitrary, discriminatory, and inconsistent with the protection of vested property rights.

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