Facts of the Case

The Commissioner, Central Goods and Services Tax, Kolkata Commissionerate filed an intra-court appeal challenging the order passed by the Single Bench in W.P. No. 7131(W) of 2019. The writ petition had questioned the validity of the communication dated 26 March 2019 issued by the Additional Commissioner of State Tax and also challenged the constitutional validity of Rule 117 of the Central Goods and Services Tax Rules, 2017 and Rule 117 of the West Bengal GST Rules, 2017 concerning the filing of TRAN-1 for claiming transitional input tax credit under the GST regime. During the pendency of the appeal, the Supreme Court delivered its landmark judgment in Union of India vs. FILCO Trade Centre Pvt. Ltd., laying down comprehensive directions regarding filing and revision of TRAN-1 and TRAN-2 forms.

 

Issues Involved

  1. Whether further adjudication was required regarding the challenge to Rule 117 of the CGST Rules, 2017 and the corresponding West Bengal GST Rules after the Supreme Court's decision in FILCO Trade Centre Pvt. Ltd..
  2. Whether the appellant's appeal required independent consideration despite the comprehensive directions already issued by the Supreme Court concerning transitional credit claims through TRAN-1 and TRAN-2.

Petitioner’s Arguments

The appellant contended that the Single Bench order required interference and challenged the relief granted in relation to transitional input tax credit. The appeal also questioned the challenge to Rule 117 of the CGST Rules, 2017 and Rule 117 of the West Bengal GST Rules, 2017 governing the filing of TRAN-1 for claiming transitional credit.

Respondent’s Arguments

The respondents relied upon the subsequent legal developments, particularly the Supreme Court's judgment in Union of India vs. FILCO Trade Centre Pvt. Ltd., which directed reopening of the GST portal for filing or revising TRAN-1 and TRAN-2 forms, making the controversy substantially governed by those directions. It was submitted that the issue no longer required separate adjudication by the High Court.

Court Order / Findings

The Calcutta High Court observed that the identical issue had already been considered in an earlier Division Bench decision, which relied upon the Supreme Court's judgment in Union of India vs. FILCO Trade Centre Pvt. Ltd.

The Court noted that the Supreme Court had directed:

  • Reopening of the GST common portal for filing or revising TRAN-1 and TRAN-2.
  • All eligible registered taxpayers to file or revise the relevant forms irrespective of whether they had approached the High Court or the IT Grievance Redressal Committee.
  • GSTN to ensure that no technical glitches occur during the reopening period.
  • Jurisdictional officers to verify the claims on merits after granting reasonable opportunity of hearing.
  • Eligible transitional credit to be reflected in the Electronic Credit Ledger after verification.
  • GST Council to issue appropriate guidelines wherever necessary.

In view of these binding directions, the High Court held that no further orders were required in the appeal. Accordingly, the appeal as well as the connected application were disposed of in terms of the Supreme Court's decision.

The Court further recorded that the Supreme Court had subsequently extended the time for reopening the GST portal by four additional weeks through its order dated 2 September 2022 in Union of India vs. FILCO Trade Centre Pvt. Ltd.

Important Clarification

  • The judgment reiterates that disputes concerning transitional input tax credit covered by the Supreme Court's decision in FILCO Trade Centre Pvt. Ltd. are to be governed by the directions issued by the Supreme Court.
  • All eligible registered taxpayers were entitled to file or revise TRAN-1 and TRAN-2 irrespective of earlier litigation or decisions of the IT Grievance Redressal Committee.
  • Verification of transitional credit claims must be undertaken by the proper officers on merits after providing reasonable opportunity of hearing.
  • The decision reinforces uniform implementation of the Supreme Court's directions across all pending transitional credit disputes.

Sections Involved

  • Rule 117 of the Central Goods and Services Tax Rules, 2017
  • Rule 117 of the West Bengal Goods and Services Tax Rules, 2017
  • Transitional Input Tax Credit (TRAN-1 & TRAN-2)
  • GST Transitional Credit Provisions

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785391671_2317compressed.pdf

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