GST TRAN-1 form revision allowed despite initial rejection for legitimate input tax credit claims

Kerala HC allowed petitioner's application to revise GST TRAN-1 form after initial rejection. Court held that statutory limitation for correcting transitional errors should not deny legitimate taxpayer claims, particularly for input tax credit. The mistake was bonafide, arising from comprehension difficulties with new formats. Petitioner attempted correction immediately upon discovering error when TRAN-2 portal opened. Denying relief would be arbitrary and violate Article 14 constitutional protection. Respondents directed to facilitate TRAN-1 revision and TRAN-2 filing through web portal arrangements.

---

---

Issues:
Challenge to rejection of application to revise form TRAN-1 under Central Goods and Services Tax Act, 2017.

Detailed Analysis:

1. Background and Error in Form Submission:
The petitioner, a registered dealer under the Kerala Value Added Tax Act, 2003 and Central Sales Tax Act, 1956, claimed unutilized input tax credit under the earlier tax regime. After the introduction of GST, the petitioner submitted form GST TRAN-1 but made an inadvertent mistake by filling Table 7(d) instead of Table 7(a), preventing the completion of form GST TRAN-2.

2. Representation and Rejection:
The petitioner sought redressal from the GST Council and filed representations after realizing the error. However, the representations were rejected, leading to the filing of a writ petition seeking correction of form GST TRAN-1 and credit of unutilized input tax.

3. Legal Provisions and Respondents' Arguments:
Respondents argued that corrections for inadvertent mistakes were not allowed after the specified time limit for filing TRAN-1. They highlighted Rule 117 of CGST Rules, 2017, and Rule 120A, emphasizing the limitations and the one-time revision provision.

4. Court's Observations and Precedents:
The Court acknowledged the challenges faced during the nascent period of GST implementation and cited precedents where courts provided relief to taxpayers in similar situations. It emphasized the need for fairness and equal protection under the law, as guaranteed by Article 14 of the Constitution of India.

5. Judgment and Relief Granted:
Considering the genuine mistake made by the petitioner and the legal entitlement to claim input tax credit, the Court set aside the rejection and directed the respondents to facilitate the revision of form GST TRAN-1 and filing of form GST TRAN-2. The Court allowed manual filing if necessary, within a specified timeframe of two months from the date of the judgment.

In conclusion, the Court's decision favored the petitioner's plea for correction of the inadvertent error in form submission, highlighting the need for fairness and adherence to legal entitlements in the context of GST implementation challenges.

---