Court orders transfer of credit to smartphone supplier's GST ledger; emphasizes compliance and verification

The Court ruled in favor of the petitioner, a smartphone supplier, directing the transfer of credit amounting to Rs. 25,39,371 in its electronic credit ledger under the GST regime. Despite the respondent's contention of no technical glitch, the Court found no fault on the petitioner's part and ordered the credit to be reflected in the ledger for July 2017. The judgment emphasized the need for verification of the credit and compliance with statutory procedures, ensuring the petitioner's entitlement to the tax credit.

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Issues:
Transfer of credit in electronic credit ledger under GST regime.

Analysis:
The petitioner, a company supplying smartphones in Rajasthan, sought direction for transferring credit of Rs. 25,39,371 in its electronic credit ledger by resubmitting form GST TRAN-2. The petitioner's stock valuation on 30.06.2017 was Rs. 9.09 Crores, eligible for credit under Section 140(3) of the CGST Act. The petitioner filed necessary forms within statutory limits but faced an issue where credit for July 2017 was not reflected in the ledger despite timely submission. The respondent contended no technical glitch caused the discrepancy, attributing it to the petitioner.

The Court noted the petitioner's timely submissions for all months and the discrepancy in credit reflection for July 2017. It found no fault on the petitioner's part in uploading the credit. The Department acknowledged the petitioner's submissions for August and September 2017, indicating an error specific to July 2017. Consequently, the Court ruled in favor of the petitioner, asserting their right to the tax credit under the law.

The Government counsel emphasized the need for verification before availing the credit, which the Court acknowledged. The judgment directed the respondents to reflect the petitioner's declaration of Rs. 25,39,371 credit for July 2017 in the ledger. However, the petitioner must provide necessary documents to establish the credit's availability for verification by the Assistant Commissioner. The Court clarified the distinction between allowing a declaration and verifying the claim, ensuring compliance with the law.

In conclusion, the petition was disposed of with directions for reflecting the credit in the petitioner's ledger, subject to verification by the Assistant Commissioner. The Court upheld the petitioner's right to the credit, emphasizing compliance with necessary procedures for availing the benefit under the GST regime.

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