Facts of the Case

The petitioner, Thomaskutty P.Y., Proprietor of M/s AST Motors, approached the Kerala High Court seeking relief regarding the inability to avail Transitional Input Tax Credit while migrating to the GST regime. The petitioner had encountered difficulties in filing TRAN-1 due to technical issues and had continuously represented the matter before the GST authorities through emails, applications, and other communications. However, the petitioner was unable to obtain the benefit of transitional credit under the GST law.

Issues Involved

Whether a registered taxpayer who could not successfully file or revise TRAN-1/TRAN-2 for claiming Transitional Input Tax Credit due to technical difficulties is entitled to another opportunity in view of the directions issued by the Hon'ble Supreme Court in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr.?

Petitioner's Arguments

  • The petitioner submitted that technical glitches prevented the successful filing of TRAN-1.
  • Several representations and communications were made before the GST authorities requesting permission to claim Transitional Credit.
  • Since the inability to file TRAN-1 was beyond the petitioner's control, the petitioner sought an opportunity to avail the eligible Transitional Input Tax Credit.

Respondents' Arguments

The respondents relied upon the legal position governing Transitional Credit. During the pendency of the writ petition, the Hon'ble Supreme Court delivered its judgment in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr., issuing comprehensive directions for reopening the GST portal for filing or revising TRAN-1 and TRAN-2 forms.

Court Order / Findings

The Kerala High Court observed that the controversy involved in the present writ petition stood fully covered by the decision of the Hon'ble Supreme Court in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr., 2022 SCC OnLine SC 912.

The Court noted that the Supreme Court had directed:

  • GSTN to reopen the common portal for filing or revising TRAN-1 and TRAN-2.
  • All aggrieved registered taxpayers to be permitted to file or revise the relevant forms irrespective of whether they had approached the High Court or the IT Grievance Redressal Committee.
  • GSTN to ensure that no technical glitches occur during the filing period.
  • Jurisdictional officers to verify the Transitional Credit claims within the prescribed period after granting reasonable opportunity of hearing.
  • The admissible Transitional Credit to be reflected in the Electronic Credit Ledger after verification.
  • GST Council, if necessary, to issue appropriate guidelines for verification of such claims.

Following the binding directions of the Supreme Court, the Kerala High Court disposed of the writ petition by applying the same directions to the petitioner's case.

Important Clarification

  • Taxpayers who were unable to file or revise TRAN-1 or TRAN-2 due to technical difficulties became entitled to the benefit of the reopening directed by the Supreme Court.
  • The benefit extended even to taxpayers whose cases had not been accepted by the IT Grievance Redressal Committee.
  • Proper officers are required to examine each claim on its own merits after providing an opportunity of hearing.
  • This judgment reinforces that Transitional Credit disputes are governed by the Supreme Court's ruling in Filco Trade Centre Pvt. Ltd. and that eligible taxpayers must be afforded a fair opportunity to claim such credit.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785563946_2483compressed.pdf  

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