Transitional GST credit denial set aside, with fresh verification ordered after one further opportunity to produce supporting records.

Denial of transitional GST credit claimed in TRAN-1 and TRAN-2, together with the consequential tax, interest and penalty demand, was examined on the footing that supporting stock and invoice documents had not been adequately produced. The Kerala High Court noted that the dispute arose in the early GST implementation phase and that the petitioner sought an opportunity to substantiate the claim with relevant records. It set aside the impugned order and remitted the matter for fresh consideration, directing the assessing authority to allow one further opportunity to produce and verify the supporting documents.

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Issues: Whether the denial of transitional credit and the consequential demand order warranted interference for want of adequate opportunity to produce supporting documents.

Analysis: The challenge concerned disallowance of transitional credit claimed in TRAN-1 and TRAN-2 and the consequential levy of tax, interest and penalty. The record indicated that the petitioner was seeking to substantiate the claim with documents, while the adjudicating authority proceeded on the basis that supporting stock and invoice documents were not produced or were insufficient. The Court held that the matter arose in the initial phase of GST implementation and that the petitioner should be given one more opportunity to place the relevant documents before the assessing authority for proper verification.

Conclusion: The impugned order was set aside and the matter was remitted for fresh consideration after giving the petitioner an opportunity to produce the supporting documents.

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