Facts of the Case

The petitioner, Paradise Land Mark, a partnership firm registered under the CGST Act, approached the Karnataka High Court seeking permission to claim transitional Input Tax Credit (ITC) by filing Form GST TRAN-1. Due to the non-availability of the GST common portal and technical difficulties, the petitioner could not submit TRAN-1 within the prescribed period and consequently lost the opportunity to transition eligible credit into the GST regime.

The petitioner sought directions to the GST authorities and GSTN to reopen the common portal for filing TRAN-1 and enable the transition of eligible input tax credit.

Issues Involved

  1. Whether the petitioner should be permitted to file Form GST TRAN-1 for claiming transitional Input Tax Credit.
  2. Whether GSTN should be directed to reopen the common portal for filing TRAN-1.
  3. Whether the Supreme Court's decision in Union of India vs. Filco Trade Centre Pvt. Ltd. applies to the petitioner's case.

Petitioner's Arguments

  • The petitioner contended that it was entitled to transitional Input Tax Credit under Section 140 of the CGST Act, 2017.
  • It was argued that the inability to file TRAN-1 was due to circumstances beyond the petitioner's control, including issues relating to the GST portal.
  • The petitioner submitted that the controversy was fully covered by the judgment of the Hon'ble Supreme Court in Union of India vs. Filco Trade Centre Pvt. Ltd. & Another, wherein directions had already been issued for reopening the GST portal for filing or revising TRAN-1 and TRAN-2 forms.
  • Accordingly, the petitioner requested similar relief.

Respondents' Arguments

The State authorities and GSTN opposed the writ petition and submitted that the petition lacked merit and was liable to be dismissed. However, no distinguishing feature was shown to establish why the petitioner's case should not be governed by the Supreme Court's decision in Filco Trade Centre.

Court Order / Findings

The Karnataka High Court observed that the controversy was directly covered by the judgment of the Hon'ble Supreme Court in Union of India vs. Filco Trade Centre Pvt. Ltd. & Another.

Relying upon the Supreme Court's binding directions, the High Court held that:

  • The petitioner is entitled to avail transitional Input Tax Credit by filing Form GST TRAN-1.
  • The concerned authorities shall permit the petitioner to file TRAN-1.
  • GSTN shall reopen the common portal for filing TRAN-1 in accordance with the Supreme Court's directions.
  • The writ petition was allowed in terms of the Supreme Court judgment.

Important Clarification

  • This judgment reiterates that taxpayers eligible under the Supreme Court's ruling in Union of India vs. Filco Trade Centre Pvt. Ltd. & Another are entitled to file or revise TRAN-1/TRAN-2 for claiming transitional Input Tax Credit.
  • The decision reinforces that eligible taxpayers cannot be denied transitional credit merely because of earlier portal-related issues.
  • The judgment confirms the obligation of GST authorities and GSTN to facilitate the filing process in accordance with the Supreme Court's directions.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017 – Transitional Arrangements for Input Tax Credit.
  • Articles 226 & 227 of the Constitution of India – Writ Jurisdiction of the High Court.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785400247_2360compressed.pdf

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