Facts of the Case

The petitioner, R.P.M. Medicare, approached the Jharkhand High Court seeking a direction to the GST authorities to permit filing of Form GST TRAN-1 for carrying forward eligible transitional input tax credit from the pre-GST regime into the GST regime.

The petitioner had earlier submitted a representation before the Deputy Commissioner of State Tax, Ranchi, requesting permission to file TRAN-1. However, the representation was rejected by an order dated 05.01.2021.

During the pendency of the writ petition, the Hon'ble Supreme Court delivered its landmark judgment in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, directing GSTN to reopen the common portal for filing or revising TRAN-1 and TRAN-2 forms for all eligible taxpayers. Subsequently, the Supreme Court further extended the reopening period by another four weeks, effectively allowing the GST portal to remain open from 02.10.2022 for a period of 60 days.

The petitioner contended that its case squarely fell within the scope of the Supreme Court's directions and sought permission to avail the benefit of the reopened portal.

Issues Involved

  1. Whether the petitioner could be permitted to file Form GST TRAN-1 despite earlier rejection of its representation.
  2. Whether the Supreme Court's judgment in Filco Trade Centre Pvt. Ltd. would apply to the petitioner's case.
  3. Whether the petitioner was entitled to avail the special reopening window provided by the Supreme Court for claiming transitional credit.

Petitioner's Arguments

  • The petitioner argued that the Supreme Court, in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, had granted a one-time opportunity to all aggrieved registered taxpayers to file or revise TRAN-1 and TRAN-2 forms.
  • It was submitted that the benefit was available irrespective of whether a taxpayer had previously approached any High Court or whether the matter had already been considered by the Information Technology Grievance Redressal Committee (ITGRC).
  • Since the writ petition had already been filed before the Supreme Court's decision, the petitioner requested that it also be allowed to utilize the reopened portal to file TRAN-1.

Respondents' Arguments

The counsel representing the CGST Department, GST Network (GSTN), and the State of Jharkhand fairly accepted that the petitioner's case was fully covered by the directions issued by the Hon'ble Supreme Court in the Filco Trade Centre Pvt. Ltd. judgment and did not dispute the petitioner's entitlement to the benefit of the reopened portal.

Court Order / Findings

The Jharkhand High Court examined the judgment dated 22.07.2022 and the subsequent order dated 02.09.2022 passed by the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd.

The Court observed that the Supreme Court had directed GSTN to reopen the GST common portal for filing or revising TRAN-1 and TRAN-2 forms and had extended the reopening period to enable all eligible taxpayers to avail transitional credit.

Since the petitioner had been unable to file TRAN-1 earlier and its case was fully covered by the Supreme Court's directions, the High Court held that the petitioner should be permitted to file TRAN-1 within the window period prescribed by the Supreme Court.

Accordingly, the writ petition was disposed of with the observation that the petitioner's claim would be governed by the directions issued by the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd.

Important Clarification

  • The Supreme Court's directions regarding reopening of the GST portal apply to all eligible registered taxpayers.
  • Filing or revising TRAN-1 is permissible irrespective of whether the taxpayer had previously filed a writ petition.
  • Earlier rejection of a representation does not deprive an eligible taxpayer of the benefit granted by the Supreme Court.
  • GST authorities are required to verify transitional credit claims after filing and allow eligible credit in accordance with law.
  • The benefit is available only in accordance with the special window and procedure prescribed by the Supreme Court.

Section Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017 – Transitional Arrangements for Input Tax Credit.
  • Relevant provisions relating to Form GST TRAN-1 and Transitional Input Tax Credit under the GST framework.

Link to Download the Order https://www.mytaxexpert.co.in/uploads/1785395251_2327compressed.pdf

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