DISALLOWING TRAN1 CREDIT OF BSIII VEHICLES

[NAMAN DOKANIA]

The asessee who is a dealer of vehicles had a stock of BSIII vehicles on 30.06.2017 which he claimed inn TRAN-1 for eligible duties. And further he sold these vehicles back to manufacturer after 01.07.2017 by issuing a tax invoice.

Department is disallowing credit of BSIII Vehicle claimed in TRAN-1 by a dealer of vehicles stating that these vehicles were disabled to be sold by the supreme court and cannot be said to be" further supply of such vehicles"

Pls guide with any case law if possible..

AI Summary

Transitional input tax credit: sale back to manufacturer may validate credit if tax invoice transfers title and constitutes supply.
Whether TRAN-1 transitional input tax credit for BSIII vehicles is disallowable hinges on whether subsequent sale back to the manufacturer on a tax invoice constituted a transfer of title and a taxable supply; the department argues a court-imposed registration/use restriction precluded further supply, while advisers contend the tax invoice sale effected supply permitting credit utilization, making invoice description and factual transfer crucial to contesting the demand.