Facts of the Case

The petitioners, comprising different registered taxpayers, approached the Telangana High Court seeking permission to file or revise GST TRAN-1 and TRAN-2 Forms for claiming eligible transitional Input Tax Credit under Section 140 of the CGST Act, 2017. They contended that due to technical glitches, procedural issues, or rejection by the GST authorities, they were unable to avail their legitimate transitional credit despite being otherwise eligible. Several petitioners also challenged the rejection of transitional credit solely on procedural grounds and sought reopening of the GST portal or acceptance of manual filing of TRAN-1 and TRAN-2 forms.

Issues Involved

  1. Whether taxpayers should be permitted to file or revise GST TRAN-1 and TRAN-2 forms after expiry of the prescribed time limit.
  2. Whether eligible transitional Input Tax Credit can be denied merely because of procedural lapses or technical difficulties in filing TRAN-1 and TRAN-2.
  3. Whether the GST portal should be reopened or manual filing accepted for claiming transitional credit.
  4. Whether Rule 117 prescribing the time limit could defeat the substantive right to transitional credit under Section 140 of the CGST Act.

Petitioners' Arguments

  • The petitioners argued that they were legally entitled to transitional Input Tax Credit under Section 140 of the CGST Act.
  • They submitted that technical glitches, portal-related problems, or procedural issues prevented timely filing or revision of TRAN-1 and TRAN-2 forms.
  • They contended that denial of transitional credit merely on procedural grounds was arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution.
  • They requested reopening of the GST portal or acceptance of manual filing so that their genuine transitional credit claims could be processed.

Respondents' Arguments

The respondents opposed the petitions. However, during the hearing, it was brought to the notice of the High Court that the Supreme Court had already settled the controversy in Union of India v. Filco Trade Centre Pvt. Ltd., wherein comprehensive directions had been issued for reopening the GST portal and permitting filing or revision of TRAN-1 and TRAN-2 forms.

Court Findings / Order

The Telangana High Court observed that the issue raised in all the writ petitions stood fully covered by the judgment of the Supreme Court in Union of India v. Filco Trade Centre Pvt. Ltd.

Following the Supreme Court's directions, the High Court disposed of all the writ petitions, holding that:

  • GSTN shall reopen the common portal for filing or revising TRAN-1 and TRAN-2 forms.
  • Every aggrieved registered taxpayer would be entitled to file or revise the forms irrespective of whether a writ petition had been filed or whether the matter had earlier been considered by the IT Grievance Redressal Committee.
  • The concerned GST authorities shall verify the claims on merits after granting reasonable opportunity of hearing.
  • Upon verification, the admissible transitional credit shall be reflected in the Electronic Credit Ledger.

Accordingly, all writ petitions were disposed of in view of the binding Supreme Court decision.

Important Clarification

  • Transitional Input Tax Credit is a substantive benefit and claims are required to be examined on merits pursuant to the directions issued by the Supreme Court.
  • Reopening of the GST portal was directed for all eligible registered persons, irrespective of whether they had approached the High Court.
  • GST authorities were required to verify each claim independently before allowing transitional credit.
  • The Telangana High Court merely applied the law already declared by the Supreme Court in Union of India v. Filco Trade Centre Pvt. Ltd., making the Supreme Court judgment the governing precedent for similar disputes.

 

Important Case Laws Referred

  • Union of India vs Filco Trade Centre Pvt. Ltd. (2022 SCC OnLine SC 912) (Relied Upon)


Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017
  • Section 140(3) of the CGST Act, 2017
  • Section 164 of the CGST Act, 2017
  • Rule 117 of the CGST Rules, 2017
  • Rule 117(1) & Rule 117(1A) of the CGST Rules, 2017
  • Article 14 of the Constitution of India
  • Article 19(1)(g) of the Constitution of India
  • Article 226 of the Constitution of India
  • Article 265 of the Constitution of India

 

Link to Download the Order-https://www.mytaxexpert.co.in/uploads/1784802137_1902.pdf

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