Transitional input tax credit cannot be defeated by belated filing where the credit was already earned and procedure was not strictly followed.

Transitional input tax credit could not be denied merely because the return was filed belatedly or the prescribed transition procedure was not strictly followed. The Court treated the credit as already earned under the earlier regime and held that a procedural irregularity under Section 140 of the CGST Act, 2017 could not defeat substantive entitlement unless the statute or rules expressly provided for lapse. The belated filing was regarded as a curable defect, and the principle that procedure is a handmaid of justice was applied. Denial of the transitional credit was therefore unsustainable.

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Issues: Whether transitional input tax credit could be denied on the ground that the relevant return was filed belatedly and the prescribed procedure for transition was not strictly followed.

Analysis: The credit had already been earned under the earlier regime and could not be treated as lapsed unless the governing rules expressly provided for such lapse. The Court held that the procedural irregularity in the transition process under Section 140 of the Central Goods and Services Tax Act, 2017 could not defeat the substantive entitlement to credit. The belated filing of returns was treated as a curable defect, and the Court relied on the principle that procedure is a handmaid of justice and not its mistress.

Conclusion: The denial of transitional input tax credit was unsustainable, and the petitioner's entitlement to the credit was upheld.

Ratio Decidendi: A validly earned input tax credit cannot be denied or allowed to lapse merely for non-compliance with procedural requirements, unless the statute or rules expressly provide for such lapse.

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