2021 (3) TMI 640 - HC - GST

Court Allows GST Form TRAN-1 Revision for Transitional Credit Claim Despite Initial Errors, Emphasizing Procedural Flexibility.

The India Cements Limited Versus The Union Of India, The State Of Rajasthan, The Assistant Commissioner, Central Excise Commissionerate, The Deputy Commissioner, State Goods And Service Tax Department

The HC allowed the petitioner's request to revise GST Form TRAN-1 to claim transitional credit, despite initial errors in unavailed CENVAT Credit details. ... Seeking to revise/correct/file afresh declaration in GST Form TRAN-1 to enable it to claim transitional credit of eligible duties - non-refund/adjustment of the unavailed CENVAT Credit existing in the name of the Petitioner - vires of time limit to file Form TRAN-1 specified in Rule 117(1) & 1(A) & Rule 120A of the Central Goods and Service Tax Rules, 2017 - vires of due date contemplated under the Rule 117 of the CGST Rules to claim the transitional credit within a specified period of time being procedural in nature - refund/carry forward the unavailed CENVAT Credit in the Electronic Ledger maintained by the Petitioner. HELD THAT:- On the introduction of GST regime, Government granted opportunity to registered persons to carry forward unutilized credit of duties/taxes paid under different erstwhile taxing statues. GST is an electronic based tax regime and most of people of India are not well conversant with electronic mechanism. Most of us are not able to load simple forms electronically whereas there were a number of steps and columns in TRAN-1 forms thus possibility of mistake cannot be ruled out. Various reasons assigned by Petitioners seem to be plausible and we find ourselves in consonance with the argument of Petitioners that unutilized credit arising on account of duty/tax paid under erstwhile Acts is vested right which cannot be taken away on procedural or technical grounds. The Respondent authorities were having complete record of already registered persons and at present they are free to verify fact and figures of any Petitioner thus inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit. The issue is no more res integra as the delay and all other aspects have been dealt with by the Hon'ble Courts one after another, and the propositions of permission to make the necessary amendments in light of the new regime of GST have been affirmed upto the Hon'ble Supreme Court in ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT]. This Court grants liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner's assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit - Petition allowed. Issues:1. Revision of GST Form TRAN-1 for transitional credit2. Legality of not refunding unavailed CENVAT Credit3. Time limit to file Form TRAN-1 under CGST Rules4. Procedural nature of due date under Rule 117 of CGST Rules5. Refund/carry forward of unavailed CENVAT Credit6. Delay in approaching the Department for rectification7. Precedent laws and judgments on similar casesRevision of GST Form TRAN-1 for Transitional Credit:The petitioner sought permission to revise/correct/file afresh declaration in GST Form TRAN-1 to claim transitional credit of eligible duties. The petitioner had made a mistake in feeding wrong details of unavailed CENVAT Credit. The court considered judgments from other High Courts and observed that the delay and all aspects had been addressed in previous cases. The court allowed the petition and granted liberty to apply before the GST Council for necessary amendments within six months.Legality of Not Refunding Unavailed CENVAT Credit:The petitioner challenged the respondents' action of not refunding/adjusting unavailed CENVAT Credit as illegal. The court noted that the petitioner had submitted the required form but made a mistake in the details. The court emphasized the importance of carrying forward unutilized credit and upheld the petitioner's right to claim the credit, directing the GST Council to issue necessary recommendations for the benefit of CENVAT credit.Time Limit to File Form TRAN-1 under CGST Rules:The petitioner argued that the time limit specified in Rule 117 of the CGST Rules was ultra vires Section 140 of the CGST Act and violative of constitutional provisions. The court considered various judgments and observed that the government had granted opportunities to carry forward unutilized credit under the GST regime. The court found no intention to deny credit based on time limits and allowed the petitioner to apply for necessary amendments within a specified period.Procedural Nature of Due Date under Rule 117 of CGST Rules:The petitioner contended that the due date under Rule 117 of the CGST Rules was procedural and not mandatory. The court examined the provisions and noted the introduction of Rule 117(1A) and Rule 120A, allowing for one-time amendments within the prescribed time. The court emphasized the right to carry forward unutilized credit and directed the GST Council to enable the petitioner to claim the benefit within the stipulated time.Refund/Carry Forward of Unavailed CENVAT Credit:The petitioner requested the refund/carry forward of unavailed CENVAT Credit in the Electronic Ledger. The court considered previous judgments and reiterated the importance of allowing such credits. The court granted liberty to the petitioner to seek necessary recommendations from the GST Council for the benefit of CENVAT credit within six months.Delay in Approaching the Department for Rectification:The respondents argued that the petitioner's delay in rectifying the mistake amounted to a non-curable default. The court compared the facts with precedent laws and found that the petitioner had taken necessary steps by submitting the form before the deadline. The court allowed the petition and directed the petitioner to apply for necessary amendments within six months.Precedent Laws and Judgments on Similar Cases:The court considered various judgments from different High Courts on similar issues regarding the filing and revision of GST forms for transitional credit. The court aligned with the settled view taken by the Division Bench of the Punjab & Haryana High Court and affirmed by the Supreme Court. The court allowed the petition and granted liberty to the petitioner to apply for necessary amendments within a specified period.