Facts of the Case

The petitioner, M/s. R.P.M. Associates, 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 submitted that its representation seeking permission to file TRAN-1 had been rejected by the Deputy Commissioner of State Tax, Ranchi, through an order dated 05.01.2021. Aggrieved by the rejection, the petitioner filed the present writ petition.

During the pendency of the writ petition, the Hon'ble Supreme Court delivered its judgment in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, directing reopening of the GST common portal to enable all eligible taxpayers to file or revise TRAN-1 and TRAN-2 forms.

Issues Involved

  1. Whether the petitioner should be permitted to file Form GST TRAN-1 for claiming transitional input tax credit.
  2. Whether the Supreme Court's directions in the Filco Trade Centre Pvt. Ltd. case apply to the petitioner.
  3. Whether rejection of the petitioner's earlier representation would prevent it from availing the benefit of the reopened GST portal.

Petitioner’s Arguments

  • The petitioner argued that it intended to carry forward eligible transitional credit but could not successfully file Form GST TRAN-1.
  • The representation seeking such permission had been rejected by the State Tax authorities.
  • Reliance was placed upon the judgment of the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, wherein all aggrieved registered taxpayers were permitted to file or revise TRAN-1 and TRAN-2 irrespective of whether:
    • A writ petition had been filed before any High Court; or
    • The matter had already been decided by the Information Technology Grievance Redressal Committee (ITGRC).
  • It was further submitted that the Supreme Court subsequently extended the period for reopening the GST portal, thereby making the petitioner eligible to avail the benefit.

Respondent’s Arguments

The counsel representing the Central GST, GST Network, Union of India, and the State of Jharkhand fairly submitted that the petitioner's case was squarely covered by the directions issued by the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd. and that the petitioner was entitled to avail the benefit granted therein.

Court Order / Findings

The Jharkhand High Court observed that the Supreme Court had already directed reopening of the GST common portal for filing or revising TRAN-1 and TRAN-2 forms for all eligible taxpayers.

The Court noted that the Supreme Court had subsequently extended the reopening period, enabling taxpayers to submit the required forms within the prescribed window.

Since the petitioner's case was fully covered by the Supreme Court's directions, the High Court held that the petitioner should also be permitted to submit Form GST TRAN-1 during the reopened portal period.

Accordingly, the writ petition was disposed of with liberty to the petitioner to file TRAN-1 within the window period provided pursuant to the Supreme Court's directions, and the petitioner's claim would thereafter be dealt with in accordance with those directions.

Important Clarification

  • The benefit of reopening of GST TRAN-1 is available even to taxpayers whose earlier requests had been rejected.
  • The benefit is available irrespective of whether a writ petition had already been filed.
  • GST authorities are required to examine the transitional credit claim on merits after providing reasonable opportunity to the taxpayer.
  • Eligible transitional credit, once verified and allowed, is to be reflected in the Electronic Credit Ledger.
  • The judgment follows and implements the binding directions of the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017
  • Transitional Credit Provisions
  • GST TRAN-1
  • GST TRAN-2
  • Electronic Credit Ledger
  • Transitional Input Tax Credit

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785395470_2344compressed.pdf

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