Unutilized CENVAT credit transition to GST despite TRAN-I/TRAN-II portal glitches, s.140 r.117 claim to be considered

Unutilized CENVAT credit standing under the erstwhile Central Excise Act, 1944 read with the CENVAT Rules, 2004 could not be denied merely because the taxpayer was unable to file TRAN-I/TRAN-II due to technical glitches on the GST portal. Interpreting s.140 of the CGST/SGST enactments with r.117, the HC held that transitional credit is liable to be allowed unless the statute expressly permits its lapsing; had transition been successfully made, such credit would have been available to discharge GST liability. The HC accordingly directed the authority to consider and decide the taxpayer's pending representation within three months, in line with the Division Bench view on transitional credit.

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Issues:
1. Transition of input tax credit due to technical glitches.
2. Disposal of representation dated 26.11.2019.
3. Scope for maintaining TRAN-I.
4. Denial of credit under GST Act, 2017.
5. Relief granted to dealers transitioning credit.
6. Compliance with Input Tax Credit scheme.

Analysis:

1. The petitioner faced difficulties transitioning input tax credit on 28.08.2017 due to technical glitches on the website, preventing successful credit utilization.

2. The petitioner submitted a representation dated 26.11.2019 regarding the TRAN-I return filed on 30.08.2017, which remained unresolved. The GST Network informed the petitioner that the issue was resolved, but the representation was not disposed of.

3. The respondent argued that there is no scope for maintaining TRAN-I, asserting that the writ petition lacks merit.

4. The Court emphasized that credit available under the Central Excise Act, 1944, along with CENVAT Rules, cannot be denied unless the law permits lapsing of such credit. Successful transition of credits under GST enactments allows for discharging tax liabilities.

5. Referring to a previous case, relief was granted to dealers who transitioned credit under GST enactments, emphasizing the importance of substantial compliance and not frustrating the Input Tax Credit scheme due to technicalities.

6. In light of the previous case, the Court directed the respondent to consider and dispose of the petitioner's representation dated 26.11.2019 within three months, following the observations of the Division Bench. The writ petitions were disposed of accordingly, with no costs incurred, and connected miscellaneous petitions were closed.

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