2022 (3) TMI 736 - HC - GST

Petitioner Wins Case for Crediting Unutilized Input Tax Credit to Electronic Register Within Three Months

M/s. Suriya Engineering Works Versus The office of Superintendent of Control GST and Central Exercise (Thiruverumbur Range) 'B' Wing

HC allowed the writ petition directing respondents to credit the unutilized input tax credit into petitioner's electronic credit register within three ... Transitional Credit - seeking direction to respondent to permit the petitioner/tax payer to file or revise form Tran-1 already filed either electronically or manually and consequently avail the benefits - HELD THAT:- Reliance placed in the case of COMMISSIONER OF GST AND CENTRAL EXCISE, ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, CENTRAL BOARD OF EXCISE AND CUSTOMS, PRINCIPAL COMMISSIONER VERSUS M/S. BHARAT ELECTRONICS LIMITED [2021 (11) TMI 818 - MADRAS HIGH COURT] and from the few decisions of the Hon’ble Supreme Court particularly in COLLECTOR OF CENTRAL EXCISE, PUNE VERSUS DAI ICHI KARKARIA LTD. [1999 (8) TMI 920 - SUPREME COURT], wherein, it has held that credit availed under the provisions of the erstwhile Central Excise Act and Central Excise Rules, 1944 are indefeasible and are intended to reduce the cascading effect of the tax to benefit the consumers. There is no lapsing of such untilised credit. The respondents are directed to verify the records and returns of the petitioner under the Central Excise Act, 1944 and if the credit had been unutilised on the cut off date (i.e) 30.06.2017, the respondents shall suitably credit into the electronic credit register of the petitioner the amount which had remained unutilized and would not be transitioned under the GST regime. Application disposed off. Issues:1. Petitioner's request for a writ of Mandamus to file or revise form Tran-1 for unutilized input credit transition.2. Discrepancy in transitioning unutilized input credit under the GST Acts.3. Resistance from the respondent based on Standard Operating Procedure (SOP) and technical issues.4. Legal precedents cited by both parties.5. Delay in filing the writ petition and its impact on the case.6. Interpretation of the law regarding unutilized credit under the Central Excise Act and GST Acts.Detailed Analysis:1. The petitioner sought a writ of Mandamus to direct the respondent to allow the petitioner to file or revise form Tran-1 for unutilized input credit transition under the Central Goods and Service Tax Act, 2017 and the Tamil Nadu Goods and Service Tax Act, 2017. The petitioner faced issues in transitioning the unutilized input credit, resulting in a significant sum remaining unutilized in the petitioner's account. The respondent resisted the petition, citing the existence of a Standard Operating Procedure (SOP) for grievance redressal and technical problems not being properly reported by the petitioner.2. The respondent referred to the decision of the Bombay High Court in Nelco Limited Vs Union of India, emphasizing that input tax credit transition provisions are time-bound concessions, and no extension should be granted for technical difficulties. The respondent argued that there was no technical difficulty on the common portal for registered users, and the petition was filed after a considerable delay, implying abandonment of rights. Additionally, the respondent highlighted the judgment of the Gujarat High Court in Sree Motors Vs Union of India to support their arguments.3. The judge considered the arguments presented by both parties and reviewed relevant legal precedents, including previous court orders and Supreme Court decisions. Referring to the judgment in Commissioner of GST and Central Excise Vs Bharat Electronics Limited and the Supreme Court decision in Collector of Central Excise, Pune Vs Dai Ichi Karkaria Limited, the judge emphasized the indefeasibility of credit availed under tax laws to prevent cascading effects and benefit consumers. Consequently, the judge allowed the writ petition based on the precedents cited and directed the respondents to credit the unutilized amount into the petitioner's electronic credit register within three months.4. In conclusion, the judgment resolved the issues raised by the petitioner regarding the transition of unutilized input credit under the GST Acts, emphasizing the importance of honoring the credit availed under tax laws. The judgment also addressed the resistance from the respondent based on procedural grounds and legal precedents cited by both parties, ultimately ruling in favor of the petitioner and directing the respondents to take necessary actions within a specified timeframe.