Facts of the Case

M/s LMJ Services Ltd., Jodhpur, filed a writ petition before the Rajasthan High Court concerning its grievance relating to GST transitional credit and the facility for filing the relevant TRAN-1 and TRAN-2 forms.

The petitioner approached the High Court against the Union of India and concerned Central GST/Excise authorities. During consideration of the writ petition, the Division Bench observed that the issues involved had already been resolved by directions of the Hon’ble Supreme Court of India.

The High Court reproduced the Supreme Court directions under which the Goods and Services Tax Network (GSTN) was required to open the common portal for filing forms to avail transitional credit through TRAN-1 and TRAN-2 for two months, initially from 01.09.2022 to 31.10.2022.

The Court further recorded that this period had subsequently been extended until 30.11.2022 by virtue of Circular No. 180/12/2022-GST dated 09.09.2022. In view of this development, the High Court concluded that the grievance raised by the petitioner had been addressed.

Issues Involved

The principal issues arising from the writ petition were:

  1. Whether the petitioner and similarly situated aggrieved registered assessees should be permitted to file the relevant TRAN-1 and TRAN-2 forms for availing GST transitional credit.
  2. Whether a registered assessee should be permitted to revise an already filed TRAN form.
  3. Whether the opportunity to file or revise TRAN-1/TRAN-2 forms was available only to taxpayers who had earlier filed writ petitions before High Courts.
  4. Whether taxpayers whose cases had already been considered or decided by the Information Technology Grievance Redressal Committee (ITGRC) could also avail the opportunity.
  5. Whether GSTN was required to ensure that no technical glitch obstructed taxpayers during the reopened filing period.
  6. Whether the petitioner’s grievance continued to survive after the portal-filing opportunity was opened to all concerned parties and extended until 30.11.2022.

Petitioner’s Arguments

The judgment/order does not separately reproduce detailed arguments advanced on behalf of the petitioner. Therefore, no submission should be attributed to the petitioner beyond what is evident from the nature of the writ petition and the relief addressed by the Court.

The petitioner’s grievance concerned the opportunity to avail GST transitional credit through TRAN-1 and TRAN-2.

The petitioner’s case effectively stood addressed by the Supreme Court directions because those directions:

  • opened the common portal for transitional credit forms;
  • permitted an aggrieved registered assessee to file the relevant form;
  • permitted revision of an already filed form;
  • extended the benefit irrespective of whether the taxpayer had filed a writ petition before a High Court; and
  • extended the benefit irrespective of whether the taxpayer’s case had been decided by ITGRC.

Respondent’s Arguments

The order does not separately record detailed substantive arguments advanced on behalf of the respondents.

The respondents were represented before the High Court. However, the Division Bench proceeded on the basis that the controversy had already been resolved by the Supreme Court directions and that the filing period had further been extended through Circular No. 180/12/2022-GST dated 09.09.2022.

Accordingly, the Court did not undertake a separate detailed adjudication of rival submissions on the merits of the transitional credit claim.

Court Order / Findings

The Rajasthan High Court recorded the following significant findings and directions:

1. Issues in the Writ Petition Had Been Resolved by Supreme Court Directions

The Division Bench expressly observed that the issues involved in the writ petition had been resolved by the Hon’ble Supreme Court of India.

The High Court reproduced the operative directions relevant to transitional credit claims.

2. GSTN to Open Common Portal for TRAN-1 and TRAN-2

The Supreme Court directions reproduced in the order required GSTN to open the common portal for filing the concerned forms for availing transitional credit through:

  • TRAN-1
  • TRAN-2

The initial period recorded in the directions was:

01.09.2022 to 31.10.2022

3. Any Aggrieved Registered Assessee Could File the Relevant Form

A major legal consequence of the reproduced directions was that any aggrieved registered assessee could file the relevant transitional credit form.

The relief was therefore not confined to a narrowly defined class of litigating taxpayers.

4. Revision of Already Filed Forms Was Permitted

The directions also enabled an aggrieved registered assessee to revise an already filed form.

This aspect was significant for taxpayers whose grievance concerned errors, deficiencies or issues in forms previously submitted.

5. Prior High Court Writ Petition Was Not Necessary

The opportunity was made available irrespective of whether the taxpayer had previously filed a writ petition before a High Court.

Accordingly, prior litigation was not treated as a prerequisite for access to the reopened TRAN filing mechanism.

6. Prior ITGRC Decision Was Not a Bar

The benefit was also available irrespective of whether the taxpayer’s case had been decided by the Information Technology Grievance Redressal Committee (ITGRC).

7. GSTN Required to Ensure No Technical Glitches

The directions required GSTN to ensure that there were no technical glitches during the relevant filing period.

8. Concerned Officers Given 90 Days for Verification

After filing/revision, the concerned officers were granted 90 days to:

  • verify the veracity of the transitional credit claim;
  • examine the claim on merits;
  • provide an appropriate reasonable opportunity to the parties concerned; and
  • pass appropriate orders.

9. Allowed Transitional Credit to Be Reflected in Electronic Credit Ledger

After verification and allowance of the claim, the permitted transitional credit was to be reflected in the taxpayer’s Electronic Credit Ledger.

10. GST Council Could Issue Scrutiny Guidelines

If required, the GST Council could issue appropriate guidelines to field formations for scrutiny of the claims.

11. Filing Period Further Extended Until 30 November 2022

The High Court recorded that the opportunity, initially available from 01.09.2022 to 31.10.2022, had been further extended until:

30.11.2022

The extension was recorded as having been granted by virtue of Circular No. 180/12/2022-GST dated 09.09.2022.

12. Petitioner’s Grievance Treated as Addressed

The High Court held that, in view of the opportunity to file TRAN-1 and TRAN-2 forms and the subsequent extension of time, the grievance raised by the petitioner had been addressed.

Consequently:

  • the writ petition was disposed of; and
  • the stay application was also disposed of.

Important Clarification

The judgment/order must be understood with the following important qualifications:

  • The Rajasthan High Court did not adjudicate the petitioner’s actual transitional credit entitlement on merits.
  • The Court did not determine or quantify the amount of transitional credit admissible to M/s LMJ Services Ltd.
  • The Court did not direct automatic credit merely because TRAN-1 or TRAN-2 could be filed or revised.
  • Every claim remained subject to verification of its veracity by the concerned officers.
  • The concerned officers were required to pass appropriate orders on merits after granting a reasonable opportunity to the parties concerned.
  • Only the transitional credit ultimately allowed was to be reflected in the Electronic Credit Ledger.
  • The writ petition was disposed of because the petitioner’s grievance regarding the filing opportunity had been addressed through the Supreme Court-directed mechanism and the subsequent extension.
  • The dates mentioned in the order relate to the specific 2022 reopening window and should not be construed as a currently available filing period.

Sections / Legal Provisions Involved

Section 140 of the Central Goods and Services Tax Act, 2017

Section 140 deals with transitional arrangements for input tax credit, subject to the statutory framework, applicable amendments and prescribed conditions.

The dispute concerning TRAN-1 and TRAN-2 forms falls within the broader transitional credit framework associated with migration from the pre-GST indirect tax regime to GST.

Rule 117 of the Central Goods and Services Tax Rules, 2017

Rule 117 is associated with the procedural mechanism for submission of declarations relating to transitional credit, particularly FORM GST TRAN-1, subject to the applicable legal framework.

Article 226 of the Constitution of India

The matter was instituted as a Civil Writ Petition before the High Court. Article 226 constitutes the principal constitutional source of the High Court’s writ jurisdiction.

Circular No. 180/12/2022-GST dated 09.09.2022

The High Court expressly recorded that the relevant filing period had been further extended until 30.11.2022 by virtue of this Circular.

Link to download the order - https://mytaxexpert.co.in/uploads/1783330879_1128compressed.pdf

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