Facts of the Case

Samdani Automobiles Private Ltd., Bhilwara, approached the Rajasthan High Court by filing D.B. Civil Writ Petition No. 4376/2020 against the Goods and Service Tax Council, the Commissioner of Central Goods and Service Tax, and the Commercial Taxes Officer, Special Circle-2, State Goods and Service Tax Department, Bhilwara.

The dispute concerned the petitioner’s grievance relating to availment of GST transitional credit through TRAN-1 and TRAN-2 forms. During the pendency of the writ petition, the issue came to be governed by directions of the Supreme Court, which provided a common opportunity to aggrieved registered assessees to file or revise the relevant transitional credit forms through the GST common portal. The Rajasthan High Court expressly recorded that the issues involved in the writ petition had been resolved by the Supreme Court directions reproduced in its order.

The High Court noted that the opportunity for filing TRAN-1 and TRAN-2 forms had been opened to all concerned parties for a period of two months, from 1 September 2022 to 31 October 2022. In view of this development, the Court considered the petitioner’s grievance to have been addressed and disposed of the writ petition.

Issues Involved

The principal issues arising in the matter were:

  1. Whether a registered assessee claiming GST transitional credit should be permitted to file the relevant TRAN-1 or TRAN-2 form, or revise a form already filed.
  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 the GST common portal should be reopened for a specified period to facilitate filing and revision of transitional credit forms.
  5. What procedure should be followed by the concerned tax officers for verification of transitional credit claims and reflection of allowed credit in the Electronic Credit Ledger.

Petitioner’s Arguments

The short disposal order does not separately record detailed petitioner submissions. Therefore, no additional argument should be attributed to the petitioner beyond what is evident from the subject matter of the writ petition.

In substance, the petitioner’s grievance concerned the opportunity to avail transitional credit through the prescribed TRAN-1/TRAN-2 mechanism. The subsequent Supreme Court directions created a general window for filing or revising such forms, thereby addressing the practical grievance underlying the petition.

Respondent’s Arguments

The order likewise does not separately reproduce detailed arguments of the respondents. The respondents before the Court were the GST Council, the Commissioner of Central Goods and Service Tax, and the Commercial Taxes Officer, Special Circle-2, State GST Department, Bhilwara.

The High Court did not adjudicate any separately recorded respondent objection on merits. Instead, it disposed of the writ petition after observing that the controversy had been resolved through the Supreme Court directions governing filing and revision of TRAN-1 and TRAN-2 forms.

Court Order / Findings

The Rajasthan High Court recorded that the issues involved in the writ petition had been resolved by the Supreme Court directions referred to in the order. The material directions reproduced by the High Court were as follows:

  1. GSTN was directed to open the common portal for filing the concerned forms for availing transitional credit through TRAN-1 and TRAN-2 for two months, from 1 September 2022 to 31 October 2022.
  2. 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; or
    • whether the taxpayer’s case had been decided by the ITGRC.
  3. GSTN was required to ensure that there was no technical glitch during the prescribed period.
  4. The concerned officers were given 90 days thereafter to verify the veracity of the transitional credit claims and pass appropriate orders on merits after granting a reasonable opportunity to the concerned parties.
  5. The transitional credit ultimately allowed was to be reflected in the Electronic Credit Ledger.
  6. If required, the GST Council could issue appropriate guidelines to field formations for scrutiny of transitional credit claims.

The High Court then specifically observed that, because the opportunity to file TRAN-1 and TRAN-2 forms had been opened to all concerned parties for the stated two-month period, the petitioner’s grievance had been addressed. Accordingly, the writ petition was disposed of.

Important Clarification

A significant clarification emerging from the order is that the reopening opportunity was not confined only to taxpayers who had already approached a High Court. The Supreme Court directions, as reproduced and applied by the Rajasthan High Court, extended the opportunity to any aggrieved registered assessee to file the relevant transitional credit form or revise an earlier form.

Further, the opportunity was available irrespective of whether the taxpayer’s case had previously been decided by the ITGRC. Thus, prior litigation status or prior ITGRC consideration was not treated as a bar to using the special filing/revision window.

Another important point is that reopening of the portal did not amount to automatic allowance of transitional credit. The concerned officers retained authority to verify the veracity of each claim, decide it on merits, and provide a reasonable opportunity to the concerned parties before passing appropriate orders. Only the credit found allowable after such scrutiny was to be reflected in the Electronic Credit Ledger.

It is also important to note that the Rajasthan High Court did not independently adjudicate the petitioner’s transitional credit entitlement on merits. The petition was disposed of because the general remedial opportunity made available pursuant to the Supreme Court directions had addressed the grievance raised in the writ proceedings.

Sections / Statutory Provisions Involved

The judgment concerns the GST transitional credit framework, principally involving:

  • 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 relating to submission of declaration for transitional credit, particularly FORM GST TRAN-1.
  • FORM GST TRAN-1 – Declaration for carrying forward eligible transitional credit into the GST regime.
  • FORM GST TRAN-2 – Form relevant to specified transitional credit claims under the GST framework.
  • Electronic Credit Ledger – The allowed transitional credit was directed to be reflected in the taxpayer’s Electronic Credit Ledger after verification and approval.

Link to download the order-https://mytaxexpert.co.in/uploads/1783417776_1369compressed.pdf

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