Facts of the Case

The petitioner, M/s. R.P.M. Pharma, approached the Jharkhand High Court seeking a direction to the GST authorities to permit filing of Form GST TRAN-1 for carrying forward transitional input tax credit from the pre-GST regime into the GST regime. The petitioner's representation seeking such permission had earlier been rejected by the Deputy Commissioner of State Tax, Ranchi, by an order dated 05.01.2021.

During the hearing, the petitioner relied upon the judgment of the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, wherein the Supreme Court directed the reopening of the GST common portal to enable all aggrieved registered taxpayers to file or revise TRAN-1 and TRAN-2 forms for claiming transitional credit. The petitioner contended that although the writ petition had been filed before the Supreme Court's decision, the benefit of the Supreme Court's directions should equally apply.

Issues Involved

  1. Whether the petitioner should be permitted to file Form GST TRAN-1 for claiming transitional input tax credit despite rejection of its earlier representation.
  2. Whether the benefit of the Supreme Court's judgment in Union of India vs Filco Trade Centre Pvt. Ltd. extends to the petitioner's case.
  3. Whether reopening of the GST common portal enables all eligible taxpayers to file or revise TRAN-1 applications irrespective of pending or decided proceedings.

Petitioner's Arguments

  • The petitioner submitted that the Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another directed GSTN to reopen the common portal for filing or revising TRAN-1 and TRAN-2 forms for all aggrieved registered taxpayers.
  • It was argued that the Supreme Court's directions were applicable irrespective of whether the taxpayer had filed a writ petition or whether the matter had been considered by the Information Technology Grievance Redressal Committee (ITGRC).
  • The petitioner further submitted that the Supreme Court subsequently extended the period for opening the GST portal, thereby enabling eligible taxpayers to avail the benefit during the prescribed window period. Accordingly, the petitioner sought permission to submit TRAN-1 within the extended period.

Respondents' Arguments

The counsel appearing for the CGST, GSTN and the State of Jharkhand fairly submitted that the petitioner's case was fully covered by the directions issued by the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, and therefore the petitioner would be entitled to avail the benefit of the reopened portal in accordance with the Supreme Court's directions.

Court Order / Findings

The Jharkhand High Court observed that the Supreme Court had categorically directed GSTN to reopen the common portal for filing or revising TRAN-1 and TRAN-2 applications and had subsequently extended the time available for such filing.

The Court held that since the petitioner's case squarely fell within the scope of the Supreme Court's directions, the petitioner should be allowed to submit Form GST TRAN-1 during the window period provided by the Supreme Court.

Accordingly, the High Court disposed of the writ petition by directing that the petitioner's case shall abide by the directions issued by the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, thereby permitting the petitioner to file TRAN-1 within the prescribed period.

Important Clarification

  • Every aggrieved registered taxpayer covered by the Supreme Court's directions was entitled to file or revise TRAN-1/TRAN-2, irrespective of whether a writ petition had been filed.
  • GSTN was required to provide a functional portal without technical glitches during the specified period.
  • Tax authorities were required to verify transitional credit claims after providing reasonable opportunity of hearing.
  • Allowed transitional credit was to be reflected in the Electronic Credit Ledger after verification.
  • The decision reiterates that High Courts would extend the benefit of the Supreme Court's directions wherever applicable.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017 – Transitional Arrangements for Input Tax Credit.
  • Rule 117 of the CGST Rules, 2017 – Filing of Form GST TRAN-1.
  • Form GST TRAN-1
  • Form GST TRAN-2

Related Case Law

  • Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, SLP (C) Nos. 32709-32710 of 2018 (Supreme Court)
  • Brand Equity Treaties Ltd. vs Union of India
  • Siddharth Enterprises vs Nodal Officer
  • Adfert Technologies Pvt. Ltd. vs Union of India
  • P.R. Mani Electronics vs Union of India

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785395460_2343compressed.pdf

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