Facts of the Case

The petitioner filed a Writ Petition seeking a writ of mandamus against the respondents for their failure to grant transitional CENVAT credit amounting to ₹1,07,81,439/- that was available as on 30.06.2017. Although the petitioner had filed Form GST TRAN-1, the GST portal reflected the status as "Processed with Error", preventing the credit from being transferred to the Electronic Credit Ledger.

The petitioner requested the Court to:

  • Direct the respondents to reopen the GST portal for refiling TRAN-1; or
  • Permit the petitioner to file TRAN-1 manually and allow the transitional credit accordingly.

During the pendency of the writ proceedings, the petitioner approached the Nodal Officer pursuant to the interim directions of the High Court. Subsequently, the authorities credited the eligible amount into the petitioner's Electronic Credit Ledger.

 

Issues Involved

  1. Whether denial of transitional CENVAT credit due to the GST portal showing TRAN-1 as "Processed with Error" was legally sustainable.
  2. Whether the petitioner was entitled to reopening of the GST portal or acceptance of manual TRAN-1.
  3. Whether the writ petition survived after the authorities granted the transitional credit during the pendency of the proceedings.

 

Petitioner's Arguments

The petitioner contended that:

  • It possessed valid transitional CENVAT credit of ₹1,07,81,439/- as on 30.06.2017.
  • Form GST TRAN-1 had been duly filed within the prescribed period.
  • Due to technical errors in the GST portal, the form was processed with errors, resulting in denial of legitimate transitional credit.
  • The denial of credit violated the petitioner's statutory rights.
  • The respondents should either reopen the GST portal or permit manual filing of TRAN-1.
  • Even after disposal of the writ petition, liberty should be reserved to approach the Court again if any dispute relating to the same transaction subsequently arose.

 

Respondents' Arguments

The Standing Counsel for the Central Board of Indirect Taxes and Customs (CBIC) submitted that:

  • Pursuant to the petitioner's approach before the Nodal Officer in compliance with the interim order dated 08.09.2020, the authorities examined the grievance.
  • The petitioner's Electronic Credit Ledger was updated on 01.10.2021 with the credit amount of ₹1,07,81,439/- vide Entry No. AA371217030366B.
  • Since the petitioner had already received the entire transitional credit claimed, the purpose of the writ petition stood satisfied and no further adjudication was required.

 

Court Order / Findings

The Andhra Pradesh High Court observed that:

  • The authorities had already updated the petitioner's Electronic Credit Ledger with the disputed transitional credit.
  • The petitioner did not object to the closure of the writ petition.
  • Considering the petitioner's request, the Court preserved the petitioner's liberty to file a separate writ petition if any future necessity arose concerning the same transaction.
  • Accordingly, the writ petition was disposed of as having become infructuous since the grievance had already been redressed.
  • No order was passed as to costs.
  • All pending miscellaneous petitions were also closed.

 

Important Clarification

This judgment does not decide any substantive legal issue regarding entitlement to transitional credit under Section 140 of the CGST Act.

The High Court merely recorded that:

  • The disputed transitional credit had already been granted by the department.
  • The petition had become infructuous.
  • Liberty was reserved to the petitioner to institute fresh proceedings if any future dispute relating to the transaction arose.

Accordingly, the order is procedural in nature rather than a precedent on interpretation of Section 140 or Rule 117.

 

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017 – Transitional Arrangements for Input Tax Credit.
  • Rule 117 of the CGST Rules, 2017 – Declaration in Form GST TRAN-1.
  • Article 226 of the Constitution of India – Writ Jurisdiction of High Courts.

 


Link to download the order –https://mytaxexpert.co.in/uploads/1782975616_6compressed.pdf

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