2022 (3) TMI 735 - HC - GST

Input tax credit transition under GST: court directs verification and permits manual Tran-1 filing or direct electronic credit.

Writ petition about entitlement to transitional input tax credit under Section 140 of the CGST Act: HC directed respondents to verify whether the ... Input Tax Credit - Seeking permission to petitioner to upload the GST – Tran-1 Form either by opening the GST portal or by allowing them to file manually - HELD THAT:- This Writ Petition stands disposed of by directing the respondents to verify whether indeed the petitioner had not utilized the input tax credit under TNVAT regime, which could not be transmitted by filing Tran-1 form in terms of Section 140 of the respective CGST Act. If such transition was permissible, but for the reasons given in the Writ Petition, the same should be allowed to be utilised by allowing the petitioner either to file a manual Tran-1 form or by making direct credit to the electronic credit register to the petitioner. The respondents shall examine the same and pass appropriate orders in terms of the above order of this Court. Petition disposed off. Issues:1. Mandamus to permit the petitioner to upload GST Tran-1 Form.2. Validity of input tax credit under the Tamil Nadu Value Added Tax Act, 2006.3. Application of decisions from other High Courts and the Supreme Court.4. Denial of input tax credit under GST regime.5. Provisions for lapsing of input tax credit and credit availed on capital goods.6. Technical challenges in uploading Tran-1 form and alternative solutions.Issue 1: Mandamus to permit the petitioner to upload GST Tran-1 FormThe Writ Petition sought a Mandamus to allow the petitioner to upload the GST Tran-1 Form either through the GST portal or by manual filing. The petitioner had not uploaded the form in time and requested permission to rectify mistakes in the form.Issue 2: Validity of input tax credit under the Tamil Nadu Value Added Tax Act, 2006The petitioner claimed that the input tax credit under the Tamil Nadu Value Added Tax Act, 2006 was not uploaded in time due to technical issues. The petitioner referred to a representation sent explaining the reasons for the delay and relied on the indefeasible nature of the credit earned under previous tax enactments.Issue 3: Application of decisions from other High Courts and the Supreme CourtThe Writ Petition cited a decision of the Delhi High Court, which was followed by various High Courts, including the Madras High Court. The judgment referred to previous cases where similar issues were considered, emphasizing the importance of allowing validly availed input tax credit under the GST regime.Issue 4: Denial of input tax credit under GST regimeThe judgment highlighted that denial of input tax credit, which was legitimately earned under previous enactments and transitioned into the GST regime, was not permissible. The court emphasized that technical challenges in uploading the Tran-1 form should not result in the denial of accumulated credit.Issue 5: Provisions for lapsing of input tax credit and credit availed on capital goodsThe court rejected the stand of the respondents to deny credit earned under previous enactments, stating that such credits were indefeasible and meant for discharging tax liabilities. The judgment directed authorities to credit the amount directly into the petitioner's GST Electronic Register if technical challenges in uploading the Tran-1 form persisted.Issue 6: Technical challenges in uploading Tran-1 form and alternative solutionsAcknowledging the technical challenges in uploading the Tran-1 form, the court directed the authorities to verify the unutilized input tax credit under the TNVAT regime and allow the petitioner to file a manual Tran-1 form or credit the amount directly to the electronic register. The court emphasized the importance of facilitating the transition of credit under the GST regime despite technical limitations.In conclusion, the Writ Petition was allowed, directing the respondents to verify and facilitate the utilization of input tax credit by the petitioner in accordance with the court's order.