Facts of the Case

The petitioner, M/s Brothers Engineering Contractors, approached the Kerala High Court seeking relief regarding the availment of Transitional Input Tax Credit while migrating from the earlier indirect tax regime to the Goods and Services Tax (GST) regime.

The dispute arose because the petitioner could not successfully avail the eligible transitional credit due to issues encountered during the migration process and filing of TRAN forms. 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) dealing with identical issues concerning Transitional Credit.

The petitioner requested that similar relief be extended in its case.

Issues Involved

  1. Whether the petitioner should be permitted to file or revise TRAN-1 and TRAN-2 forms for claiming Transitional Input Tax Credit.
  2. Whether the benefit granted by the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd. should apply to the petitioner's case.
  3. Whether GST authorities should verify the petitioner's transitional credit claim after reopening the GST portal.

Petitioner's Arguments

  • The petitioner submitted that it was entitled to Transitional Input Tax Credit under Section 140 of the CGST Act.
  • It contended that due to difficulties faced during migration to GST and technical issues relating to TRAN forms, it could not effectively claim the eligible credit.
  • Since the Supreme Court had already settled the issue in Filco Trade Centre Pvt. Ltd., the petitioner sought identical relief.

Respondents' Arguments

  • The respondents relied upon the prevailing legal position.
  • It was acknowledged before the Court that the controversy stood covered by the judgment of the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another (2022 SCC OnLine SC 912).

Court Order / Findings

The Kerala High Court observed that the controversy involved in the present writ petition had already been conclusively settled by the Hon'ble Supreme Court in Filco Trade Centre Pvt. Ltd.

Accordingly, the Court held that the directions issued by the Supreme Court would fully govern the petitioner's case.

The High Court disposed of the writ petition by extending the benefit of the Supreme Court's directions, which included:

  • GSTN shall reopen the common portal for filing or revising TRAN-1 and TRAN-2.
  • Every aggrieved registered taxpayer shall be permitted to file or revise the relevant forms irrespective of whether a writ petition had been filed or the matter had been decided by the IT Grievance Redressal Committee.
  • GSTN shall ensure that no technical glitches occur during the reopening period.
  • Jurisdictional officers shall verify the transitional credit claim within 90 days after granting reasonable opportunity of hearing.
  • Eligible transitional credit shall thereafter be reflected in the Electronic Credit Ledger.
  • GST Council may issue necessary guidelines for verification of such claims.

The writ petition was accordingly disposed of in terms of the Supreme Court judgment.

Important Clarification

This judgment does not independently decide the merits of Transitional Input Tax Credit. Instead, it reiterates and applies the binding 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).

The decision confirms that taxpayers facing genuine difficulties in claiming Transitional Credit are entitled to the benefit of the reopening mechanism directed by the Supreme Court, irrespective of whether they had previously approached the High Court or the IT Grievance Redressal Committee.

Sections Involved

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

Sections Involved:

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

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785403645_2396compressed.pdf

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