Facts of the Case

P.R. Rolling Mills Private Limited filed a writ petition before the Rajasthan High Court seeking a direction to the respondent authorities to accept its declaration in Form GST TRAN-1, thereby enabling it to claim transitional credit of eligible duties in respect of inputs under Section 140 of the Rajasthan Goods and Services Tax Act.

The petitioner also sought quashing of the orders dated 31 January 2020 and 4 October 2021, by which it had been denied the benefit of submission of Form GST TRAN-1.

As recorded on page 1 of the order, the petitioner’s case was that it had filed the declaration in Form GST TRAN-1, but the same was not accepted due to technical glitches/submission of C-Forms.

During the pendency of the matter, the Supreme Court in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr., SLP (C) Nos. 32709–32710/2018, decided on 22 July 2022, issued general directions requiring the Goods and Services Tax Network to open the common portal for filing forms relating to transitional credit through TRAN-1 and TRAN-2.

The Supreme Court directions permitted an aggrieved registered assessee to file the relevant form or revise an already filed form, irrespective of whether the taxpayer had earlier filed a writ petition before a High Court or whether the taxpayer’s case had been decided by the Information Technology Grievance Redressal Committee.

The order further recorded that, pursuant to the Supreme Court directions, the Government of India, Ministry of Finance, Department of Revenue, through a circular dated 9 September 2022, provided for the portal to remain open during the period 1 October 2022 to 30 November 2022, instead of the earlier period referred to in the Supreme Court directions.

Issues Involved

The principal issues before the Rajasthan High Court were:

  1. Whether the petitioner, being a registered assessee seeking transitional credit under Section 140 of the Rajasthan GST Act, was entitled to file Form GST TRAN-1 during the extended period made available pursuant to the Supreme Court’s directions in Filco Trade Centre.
  2. Whether the respondent authorities could refuse to accept Form GST TRAN-1 on technical grounds when the common portal had been opened pursuant to the Supreme Court’s general directions.
  3. Whether the earlier orders dated 31 January 2020 and 4 October 2021, refusing the petitioner the benefit of submission of Form GST TRAN-1, could continue to operate in view of the subsequent Supreme Court directions.
  4. Whether the benefit of the extended filing opportunity was available irrespective of prior litigation or consideration by the Information Technology Grievance Redressal Committee.

Petitioner’s Arguments

The petitioner contended that it had filed the declaration in Form GST TRAN-1, but the declaration was not accepted due to technical glitches/submission of C-Forms.

It relied upon the Supreme Court’s decision in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr., in which general directions had been issued to GSTN for reopening the common portal to enable filing of the relevant forms for availing transitional credit through TRAN-1 and TRAN-2.

The petitioner’s reliance on the Supreme Court directions was significant because those directions applied broadly to aggrieved registered assessees and permitted filing or revision of the relevant transitional credit forms irrespective of whether:

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

Accordingly, the petitioner sought the benefit of the extended filing period and requested that the earlier adverse orders refusing the benefit of Form GST TRAN-1 be quashed.

Respondent’s Arguments

The High Court’s short order records that learned counsel for both parties were heard. However, it does not separately set out any detailed independent counter-arguments or substantive legal submissions advanced by the respondent authorities.

Therefore, no additional respondent contention should be attributed beyond what is expressly recorded in the judgment. The dispute nevertheless arose from the respondent authorities’ earlier refusal to grant the petitioner the benefit of submission of Form GST TRAN-1 through the orders dated 31 January 2020 and 4 October 2021.

Court Order / Findings

The Rajasthan High Court found that, in view of the Supreme Court’s directions in Filco Trade Centre and the subsequent extension reflected in the Government of India circular dated 9 September 2022, the petitioner was entitled to avail the benefit of the extended period for filing Form GST TRAN-1.

The Court observed that a registered assessee could avail the extended opportunity even where no writ petition had previously been filed. The petitioner was therefore entitled to file Form GST TRAN-1 afresh along with all necessary documents during the available extended period.

The Court further held that the respondents could not refuse to accept the filing on any technical ground, provided that all other necessary conditions for filing the form were fulfilled.

Accordingly, the High Court:

  • directed the respondents to provide the petitioner with the facility to file Form GST TRAN-1 within the extended period;
  • directed that the filing should not be refused if made in accordance with the permitted opportunity;
  • quashed the orders dated 31 January 2020 and 4 October 2021; and
  • disposed of the writ petition.

The operative direction appears on page 3 of the uploaded order, where the Court expressly directed provision of the filing facility and quashed the two earlier rejection orders.

Important Clarification

A significant clarification arising from the order is that the benefit of the Supreme Court’s directions concerning reopening of the portal for TRAN-1 and TRAN-2 was not confined only to taxpayers who had already approached a High Court.

The Supreme Court’s directions, as reproduced and applied by the Rajasthan High Court, contemplated that an aggrieved registered assessee could 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.

The Rajasthan High Court further clarified that the respondents could not reject the petitioner’s filing merely on a technical ground, provided all other necessary filing conditions were satisfied.

It is also important to maintain the precise scope of the judgment: the Court granted the facility to file Form GST TRAN-1 and prevented refusal on technical grounds, subject to fulfilment of other necessary conditions. The order should not be read as an unconditional adjudication that every amount of transitional credit claimed by the petitioner automatically stood finally allowed on merits.

Sections / Legal Provisions Involved

Section 140 of the Rajasthan Goods and Services Tax Act – Transitional arrangements for input tax credit, under which the petitioner sought to claim transitional credit of eligible duties in respect of inputs.

Form GST TRAN-1 – The declaration form involved in the petitioner’s claim for transitional credit.

Form GST TRAN-2 – Also referred to in the context of the Supreme Court’s general directions for reopening the common portal for transitional credit forms.

Supreme Court Directions in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr. – The controlling judicial development relied upon by the Rajasthan High Court for extending the opportunity to file or revise transitional credit forms.

Link to download the order -https://mytaxexpert.co.in/uploads/1783419276_1374compressed.pdf

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