Facts of the Case

The petitioner, M/s Jelitta Publicity, filed the present writ petition before the Kerala High Court concerning the inability to avail Transitional Input Tax Credit (ITC) while migrating to the Goods and Services Tax (GST) regime. The dispute related to the filing/revision of Form TRAN-1/TRAN-2 for carrying forward eligible credit into the GST system.

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 (2022 SCC OnLine SC 912), addressing identical issues concerning transitional credit.

Accordingly, the Kerala High Court examined whether the petitioner's grievance stood covered by the Supreme Court's directions.

Issues Involved

  1. Whether the petitioner should be permitted to file or revise TRAN-1/TRAN-2 for claiming Transitional ITC.
  2. Whether the Supreme Court's decision in Filco Trade Centre Pvt. Ltd. applies to the petitioner's case.
  3. Whether GST authorities are required to verify transitional credit claims after reopening the GST portal.

Petitioner's Arguments

  • The petitioner contended that eligible Transitional ITC could not be availed due to issues faced during migration to the GST regime.
  • It was submitted that the petitioner deserved an opportunity to file or revise the necessary declarations to claim the admissible transitional credit.
  • The petitioner sought appropriate directions for reopening the facility for filing TRAN forms.

Respondent's Arguments

  • The respondents relied upon the legal position governing transitional credit under the GST law.
  • During the hearing, it was acknowledged that the controversy raised in the writ petition had already been addressed by the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another.

Court Order / Findings

The Kerala High Court observed that the controversy involved in the writ petition was completely covered by the judgment of the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd.

Accordingly, the Court disposed of the writ petition by applying the Supreme Court's directions, including:

  • GSTN shall reopen the common portal for filing or revising TRAN-1 and TRAN-2 during the prescribed period.
  • Every aggrieved registered taxpayer shall be entitled to file or revise the relevant forms, irrespective of:
    • whether a writ petition had been filed,
    • or whether the matter had already been considered by the Information Technology Grievance Redressal Committee (ITGRC).
  • GSTN shall ensure that no technical glitches occur during the reopening period.
  • The jurisdictional officers shall verify the claims within 90 days after reopening and pass appropriate orders after providing reasonable opportunity of hearing.
  • The admissible Transitional ITC shall thereafter be reflected in the Electronic Credit Ledger.
  • The GST Council may issue suitable guidelines for scrutiny of such claims.

The writ petition was disposed of in terms of the directions issued by the Supreme Court.

Important Clarification

This judgment does not independently decide the merits of the petitioner's Transitional ITC claim. Instead, the Kerala High Court extended the benefit of the Supreme Court's binding decision in Filco Trade Centre Pvt. Ltd., thereby granting the petitioner the same opportunity available to all eligible taxpayers for filing or revising TRAN-1/TRAN-2 and claiming Transitional ITC.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017 – Transitional Arrangements for Input Tax Credit.
  • Section 164 of the Central Goods and Services Tax Act, 2017 – Power to make Rules.
  • Relevant provisions relating to Rule 117 of the CGST Rules, 2017 governing filing of TRAN-1/TRAN-2.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785403291_2391compressed.pdf

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