Facts of the Case

M/s Shree Ambika Industries, through its proprietor Shri Kirti Kumar Gaur, filed a writ petition before the Rajasthan High Court at Jodhpur against the State of Rajasthan and other GST authorities. The dispute raised in the writ petition related to the petitioner’s grievance concerning the filing of the relevant forms for availing GST transitional credit through TRAN-1 and TRAN-2.

During the pendency of the writ petition, the issues involved came to be governed by directions referred to by the High Court as having been issued by the Hon’ble Supreme Court in the relevant Special Leave to Appeal proceedings. Under those directions, the Goods and Services Tax Network (GSTN) was required to open the common portal for filing the concerned forms for availing transitional credit through TRAN-1 and TRAN-2.

The Supreme Court directions, as reproduced in the High Court’s order, contemplated an initial filing window from 01.09.2022 to 31.10.2022. The High Court further recorded that this period was extended up to 30.11.2022 by Circular No. 180/12/2022-GST dated 09.09.2022. In view of this development, the Court considered that the petitioner’s grievance had been addressed.

Issues Involved

The principal issues arising from the matter were:

  1. Whether an aggrieved registered assessee should be provided an opportunity to file or revise TRAN-1 and TRAN-2 for availing transitional credit.
  2. Whether such opportunity should be available irrespective of whether the taxpayer had earlier filed a writ petition before a High Court.
  3. Whether the benefit should also extend to taxpayers whose cases had already been considered or decided by the Information Technology Grievance Redressal Committee (ITGRC).
  4. Whether GSTN was required to ensure that the reopened portal operated without technical glitches.
  5. Whether the concerned tax officers were required to verify the transitional credit claims on merits after granting a reasonable opportunity to the concerned parties.
  6. Whether the petitioner’s grievance survived after the general reopening of the portal and extension of the filing period up to 30.11.2022.

Petitioner’s Arguments

The petitioner’s grievance, as reflected from the subject matter and disposal of the writ petition, concerned the opportunity to avail transitional credit by filing the relevant TRAN-1 and/or TRAN-2 forms.

The petitioner sought relief in relation to the inability or difficulty associated with availing the transitional credit through the prescribed GST mechanism. However, the order does not separately record detailed submissions of the petitioner’s counsel. Therefore, it would not be appropriate to attribute any additional factual or legal contention to the petitioner beyond what is evident from the order itself.

The material point was that the petitioner’s grievance stood addressed once a general opportunity became available to concerned taxpayers to file or revise the relevant transitional credit forms.

Respondent’s Arguments

The order records appearance on behalf of the respondents but does not separately reproduce detailed arguments advanced by the respondent authorities.

The decisive development before the High Court was that the issue had already been resolved through the directions referred to in the Supreme Court proceedings, followed by the extension of the relevant period under Circular No. 180/12/2022-GST dated 09.09.2022.

Accordingly, the Court proceeded on the basis that the relief underlying the petitioner’s grievance had become available through the general reopening and extended filing mechanism.

Court Order / Findings

The Rajasthan High Court noted that the issues involved in the writ petition had been resolved through the directions referred to in the Supreme Court proceedings.

The Court took note of the following substantive directions:

  • GSTN was directed to open the common portal for filing the concerned forms for availing transitional credit through TRAN-1 and TRAN-2 for the prescribed period.
  • Any aggrieved registered assessee was permitted to file the relevant form or revise an already filed form, irrespective of whether the taxpayer had filed a writ petition before a High Court.
  • The opportunity was also available irrespective of whether the taxpayer’s case had been decided by the ITGRC.
  • GSTN was required to ensure that there was no technical glitch during the relevant period.
  • The concerned officers were given 90 days thereafter to verify the veracity of transitional credit claims and pass appropriate orders on merits after granting a reasonable opportunity to the concerned parties.
  • The transitional credit ultimately allowed was required to be reflected in the Electronic Credit Ledger.
  • If required, the GST Council could issue appropriate guidelines to field formations for scrutiny of the claims.

The High Court then specifically observed that the opportunity to file TRAN-1 and TRAN-2 had been opened for all concerned parties initially from 01.09.2022 to 31.10.2022, and that the period had further been extended until 30.11.2022 by Circular No. 180/12/2022-GST dated 09.09.2022.

Consequently, the Court held that the grievance raised by the petitioner had been ventilated and disposed of the writ petition.

Important Clarification

This judgment is important because it does not record an automatic allowance of transitional credit merely upon filing TRAN-1 or TRAN-2. The filing or revision opportunity enables the taxpayer to place the claim before the authorities, but the claim remains subject to verification.

The concerned officers are required to:

  • verify the veracity of the transitional credit claim;
  • consider the claim on merits;
  • grant an appropriate reasonable opportunity to the concerned party; and
  • pass an appropriate order thereafter.

Only the allowed transitional credit is to be reflected in the Electronic Credit Ledger.

A further significant clarification is that the opportunity was not confined only to taxpayers who had approached a High Court. The directions extended to an aggrieved registered assessee irrespective of whether:

  • a writ petition had been filed before a High Court; or
  • the taxpayer’s case had been decided by the ITGRC.

Thus, the High Court disposed of the petition because the petitioner’s grievance had effectively been addressed through the general portal-opening mechanism and the extension of the filing period up to 30.11.2022.

Sections Involved

·         Section 140 of the Central Goods and Services Tax Act, 2017 – Transitional arrangements for input tax credit.

·         Rule 117 of the Central Goods and Services Tax Rules, 2017 – Procedural framework concerning submission of declaration for transitional credit, commonly associated with FORM GST TRAN-1.

·         FORM GST TRAN-1 – Form concerning transition of eligible pre-GST credits into the GST regime.

·         FORM GST TRAN-2 – Form relevant to specified transitional credit claims under the GST framework.

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783330057_1162compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.