2022 (9) TMI 370 - HC - GST

Landmark Ruling: GST TRAN-I Form Credit Claims Allowed with Verification Process for Taxpayers Under Specified Conditions

HC disposed of petitions seeking permission to file GST TRAN-I form for claiming carried forward input tax credit. Following SC's judgment in Filco Trade ... Transitional credit under GST - Filing of Form GST TRAN-1/TRAN-2 - Extension of filing window by judicial direction - Verification of transitional credit claims by assessing officers - Reflection of allowed transitional credit in Electronic Credit Ledger - Obligation of GSTN to provide portal facility without technical glitchesTransitional credit under GST - Filing of Form GST TRAN-1/TRAN-2 - Extension of filing window by judicial direction - Petitioners are entitled to file or revise Form GST TRAN-1/TRAN-2 during the period directed by the Supreme Court to claim transitional credit. - HELD THAT: - The High Court accepted that the determinative question raised in these petitions has already been answered by the Supreme Court in Union of India v. Filco Trade Centre Pvt. Ltd. The Supreme Court directed GSTN to open a common portal for filing and revising TRAN-1 and TRAN-2 for the limited period from 01.09.2022 to 31.10.2022 and held that aggrieved registered assessees may file or revise the relevant forms irrespective of prior writ petitions or ITGRC decisions. The High Court applied those directions as governing law and disposed of the petitions accordingly.Petitions disposed by directing compliance with the Supreme Court's order permitting filing/revision of TRAN-1/TRAN-2 during 01.09.2022-31.10.2022.Verification of transitional credit claims by assessing officers - Reflection of allowed transitional credit in Electronic Credit Ledger - Obligation of GSTN to provide portal facility without technical glitches - Claims filed/revised in the permitted window are to be verified by the concerned officers within the time directed and, if allowed, reflected in the Electronic Credit Ledger; GSTN must ensure the portal functions without technical glitches. - HELD THAT: - Relying on the Supreme Court's directions, the High Court recorded that officers are to be given 90 days after the filing window to verify the veracity of transitional credit claims and pass appropriate orders on merits after granting reasonable opportunity to the parties. The Court also recorded the requirement that GSTN ensure absence of technical glitches during the filing period and that allowed transitional credit be reflected in the Electronic Credit Ledger. The High Court consequently disposed of the petitions in those terms.Verification within 90 days, reflection of allowed credit in Electronic Credit Ledger, and obligation on GSTN to ensure portal functionality as per the Supreme Court's directions.Final Conclusion: All captioned petitions disposed of by applying and implementing the Supreme Court's directions in Union of India v. Filco Trade Centre Pvt. Ltd., permitting filing/revision of TRAN-1/TRAN-2 during 01.09.2022-31.10.2022, directing GSTN to ensure portal functionality, granting officers 90 days for verification, and directing reflection of allowed transitional credit in the Electronic Credit Ledger; notices discharged and interim orders vacated. Issues:Petitioners seeking permission to file 'Form GST Tran-I' for claiming carried forward eligible duties of CENVAT/Input Tax Credit. Interpretation of Section 140 of the Goods and Services Tax Act, 2017 read with Rule 117 of the Central Goods and Services Tax Rules, 2017. Whether the due date to claim transitional credit is procedural or mandatory. Application of Supreme Court judgment in Union of India vs. Filco Trade Centre Pvt. Ltd regarding Transitional Credit through TRAN-1 and TRAN-2.Analysis:The petitioners in a group of petitions requested the respondent authorities to allow them to file 'Form GST Tran-I' to claim the carried forward eligible duties of CENVAT/Input Tax Credit concerning Service Tax, Central Excise, and Gujarat Value Added Tax on the appointed day of 30.6.2017 under Section 140 of the Goods and Services Tax Act, 2017, and Rule 117 of the Central Goods and Services Tax Rules, 2017. They argued that the due date for claiming transitional credit should be considered directory and not mandatory, seeking permission to file GST Tran-I electronically or manually for claiming CENVAT/Input Credit.The transition from the Value Added Tax/Service Tax/Central Excise regime to the Goods and Service Tax regime allowed for carrying forward the credit of eligible taxes and duties paid on input services not availed as input tax credit on the appointed day of 1.7.2017 when the CGST Act came into effect. The filing of TRAN-1 was required under the CGST Tax Rules before 30.9.2017. The issue raised in these petitions was similar to the one addressed by the Apex Court in the case of Union of India vs. Filco Trade Centre Pvt. Ltd, where the Supreme Court issued specific directions regarding Transitional Credit through TRAN-1 and TRAN-2, including the opening of a common portal for filing forms, verification of claims by concerned officers, and reflection of allowed Transitional credit in the Electronic Credit Ledger.In light of the Supreme Court's directions in the mentioned case, the High Court disposed of all the petitions, stating that the Supreme Court's decision would govern the rights of the parties involved. The petitions were consequently disposed of in accordance with the terms outlined in the Supreme Court judgment, with notices discharged and interim orders vacated.