Petitioner wins direction to consider rectified TRAN-1 form for input tax credit under Section 140

The Madras HC allowed a writ petition seeking direction to consider petitioner's rectified manual TRAN-1 form for crediting ITC on stock of goods. The court noted petitioner's continuous correspondence with respondents and GST Help Desk regarding transition credit issues. The HC held that GST Act provisions do not provide for lapsing of credit that couldn't be successfully transitioned under the new regime when Form TRAN-1 was filed correctly. The court directed respondents to allow input tax credit after scrutiny and verification by competent officer, examining whether petitioner was entitled to transition credit under Section 140 of TNGST Act despite technical mistakes in the original form.

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Issues:
Petitioner seeks Mandamus for credit of ITC on stock of goods in electronic ledger. Petitioner filed rectified manual TRAN-1 for the same.

Analysis:
The petitioner, a manufacturer, filed TRAN-1 under TNGST Act/CGST Act to transition input tax credit but mistakenly filled details in wrong section. Despite continuous correspondence with respondents and GST web-portal, credit was not transitioned. Respondents cited limitation period as a reason for opposition.

The High Court referred to previous cases where relief was granted in similar situations. The Court emphasized the importance of substantial compliance over technicalities in granting Input Tax Credit (ITC) benefits. The Court upheld the order to allow the petitioner to file a revised Form TRAN-1 within a specified period.

Referring to decisions from other High Courts, the Court highlighted the right to utilize pre-GST regime credits and the indefeasible nature of such credits. The Court directed the respondents to allow ITC after verification and scrutiny, ensuring the petitioner's entitlement to transition credit despite technical mistakes in filing TRAN-1. Cooperation in providing necessary documents was mandated within a specified timeframe.

The Court concluded by disposing of the writ petition, providing detailed directions to the respondents for allowing ITC based on verification and compliance. The petitioner was given a timeline to cooperate and complete the necessary procedures. No costs were awarded, and the connected miscellaneous petition was closed.

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