Court allows submission of late TRAN-1 form for GST credit transfer, emphasizing vested rights

The court ruled in favor of the petitioner, allowing them to submit the required TRAN-1 form to carry forward the credit from their Cenvat account to the GST regime. Despite the petitioner's initial failure to file the form due to lack of awareness, the court emphasized the importance of honoring vested rights and not depriving individuals of benefits based on procedural issues. The judgment underscored the need for flexibility and understanding during transitions to new tax regimes, ensuring that individuals are not unfairly disadvantaged by technicalities.

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Issues:
Carrying forward of credit in petitioner's Cenvat account to GST regime due to non-filing of TRAN-1 form.

Analysis:
The petition concerns the carrying forward of an amount of Rs. 9,96,637 from the petitioner's Cenvat account to the GST regime in Jammu and Kashmir. The petitioner failed to submit the required TRAN-1 form and instead submitted GSTR-3B. The Assistance Commissioner informed that the reason for non-filing of TRAN-1 was not due to a technical glitch, leading to the petitioner's case being disregarded. The petitioner's counsel suggested reversing the submission and proceeding with filing TRAN-1 to claim the benefit. Despite lack of awareness about the procedure, the petitioner mentioned the credit in the GSTR-3B within the stipulated time. The respondents did not dispute the entitlement to carry forward the credit or the correctness of the amount but raised objections regarding the non-submission of TRAN-1 within the prescribed period.

The petitioner argued that being unaware of the procedure should not deprive them of the benefit, especially when the credit was reflected in the GSTR-3B return. Citing a previous judgment, the petitioner contended that the unutilized credit is a vested right that cannot be denied on procedural or technical grounds. The court agreed with this argument, emphasizing that the introduction of the GST regime allowed for carrying forward unutilized credits, and technical difficulties should not hinder this process. The court directed the respondents to allow the petitioner to submit the TRAN-1 electronically or manually by a specified date, emphasizing the importance of honoring the petitioner's right to claim the credit.

The judgment highlighted the importance of not depriving individuals of their rights due to procedural or technical issues, especially in the transition to a new tax regime. The court's decision to permit the petitioner to submit the required form to claim the credit underscores the principle of upholding vested rights, even in the face of administrative challenges. This case serves as a reminder of the need for flexibility and understanding during transitions to new legal frameworks, ensuring that individuals are not unfairly disadvantaged due to technicalities.

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