Facts of the Case

The petitioner, Sabu Thomas, Proprietor of M/s Tyre India, approached the Kerala High Court seeking relief regarding the inability to avail Transitional Input Tax Credit while migrating to the GST regime. The grievance related to filing/revising the prescribed TRAN forms required for carrying forward eligible credit into GST. 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, comprehensively addressing similar issues faced by taxpayers across the country.

Issues Involved

  • Whether the petitioner should be permitted to file or revise GST TRAN-1 and TRAN-2 forms for claiming Transitional Input Tax Credit.
  • Whether the relief granted by the Hon'ble Supreme Court in Filco Trade Centre would equally apply to the petitioner's case.
  • Whether taxpayers facing technical difficulties while transitioning into GST are entitled to another opportunity to claim eligible Transitional Credit.

Petitioner's Arguments

The petitioner submitted that he could not effectively avail Transitional Input Tax Credit due to issues encountered while migrating to the GST regime. He sought permission to submit or revise the necessary declarations so that the eligible transitional credit could be reflected in accordance with law.

Respondents' Arguments

The respondents relied upon the legal framework governing Transitional Credit. During the hearing, it was acknowledged that the controversy involved had already been settled by the judgment of the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, which provided a uniform mechanism for all eligible taxpayers to file or revise TRAN-1 and TRAN-2 forms within the specified period.

Court Order / Findings

The Kerala High Court observed that the issue raised in the writ petition stood completely covered by the judgment of the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd. The Court held that the Supreme Court's directions would apply equally to the present case.

Accordingly, the writ petition was disposed of in terms of the Supreme Court's directions, which included:

  • GSTN shall open the common portal for filing or revising TRAN-1 and TRAN-2 forms from 01.09.2022 to 31.10.2022.
  • Every aggrieved registered taxpayer may file or revise the relevant forms irrespective of whether a writ petition had been filed or whether the matter had earlier been considered by the IT Grievance Redressal Committee (ITGRC).
  • GSTN shall ensure that no technical glitches occur during the filing period.
  • Jurisdictional officers shall verify the claims within 90 days after granting reasonable opportunity to the taxpayer.
  • The admissible Transitional Credit shall thereafter be reflected in the Electronic Credit Ledger.
  • GST Council may issue appropriate guidelines for scrutiny of such claims, wherever required.

Sections 

  • Section 140 of the Central Goods and Services Tax Act, 2017
  • Transitional Input Tax Credit (ITC)
  • GST TRAN-1
  • GST TRAN-2
  • Electronic Credit Ledger
  • Directions issued by the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another (2022 SCC OnLine SC 912)

Important Clarification

This judgment reiterates that taxpayers who were unable to claim Transitional Input Tax Credit due to technical or procedural difficulties are entitled to the benefit of the Supreme Court's decision in Filco Trade Centre. The Kerala High Court confirmed that all eligible taxpayers falling within the scope of the Supreme Court's directions could avail the opportunity to file or revise TRAN-1 and TRAN-2 during the special window provided by GSTN.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785403030_2371compressed.pdf

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