Facts of the Case

The petitioners approached the Kerala High Court seeking relief in respect of availing Transitional Input Tax Credit while migrating from the earlier indirect tax regime to the Goods and Services Tax (GST) regime.

They contended that they were unable to successfully file or revise the required TRAN-1/TRAN-2 forms because of difficulties faced during the transition to GST. Consequently, they sought appropriate directions permitting them to claim the eligible transitional credit.

During the hearing, it was acknowledged that the controversy involved in both writ petitions had already been addressed by the Hon'ble Supreme Court in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr., 2022 SCC OnLine SC 912.

Issues Involved

  1. Whether registered taxpayers should be permitted to file or revise TRAN-1 and TRAN-2 forms for claiming Transitional Input Tax Credit under GST.
  2. Whether taxpayers who could not claim transitional credit due to technical or procedural difficulties should receive relief in light of the Supreme Court's decision in Filco Trade Centre.
  3. Whether the Supreme Court's directions regarding reopening of the GST portal would govern the pending writ petitions before the High Court.

Petitioners' Arguments

  • The petitioners submitted that they were entitled to Transitional Input Tax Credit under the GST regime.
  • They argued that due to difficulties encountered during migration to GST and filing of statutory forms, they could not successfully avail the credit.
  • They requested the Court to permit filing or revision of TRAN-1/TRAN-2 so that legitimate transitional credit could be claimed in accordance with law.

Respondents' Arguments

The respondents relied upon the legal position governing transitional credit.

During the proceedings, it became evident that the controversy stood substantially covered by the judgment of the Hon'ble Supreme Court in Filco Trade Centre, wherein comprehensive directions had already been issued regarding reopening of the GST portal and filing/revision of TRAN forms by eligible taxpayers.

Court Order / Findings

The Kerala High Court observed that the issue involved in both writ petitions had already been conclusively addressed by the Hon'ble Supreme Court in Union of India & Anr. vs Filco Trade Centre Pvt. Ltd. & Anr., 2022 SCC OnLine SC 912.

Accordingly, the Court held that the directions issued by the Supreme Court would apply equally to the petitioners.

The Court recorded the following important directions flowing from the Supreme Court judgment:

  • GSTN shall reopen the common portal for filing TRAN-1 and TRAN-2 for the specified period.
  • Every aggrieved registered taxpayer shall be entitled to file a fresh form or revise an already filed form irrespective of whether:
    • a writ petition had been filed before the High Court; or
    • 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 authorities shall verify the transitional credit claims within the prescribed period after granting reasonable opportunity of hearing.
  • Allowed transitional credit shall thereafter be reflected in the Electronic Credit Ledger.
  • GST Council may issue suitable guidelines for scrutiny of such claims, wherever necessary.

The writ petitions were disposed of by directing that the Supreme Court's directions shall govern the petitioners' claims as well.

Important Clarification

This judgment does not independently decide the merits of Transitional Input Tax Credit.

Instead, the Kerala High Court followed and implemented the binding directions of the Hon'ble Supreme Court in Filco Trade Centre, thereby ensuring that taxpayers similarly situated receive the benefit of reopening of the GST portal for filing or revising TRAN-1 and TRAN-2 forms.

The decision reinforces that eligible taxpayers cannot be denied consideration of transitional credit claims merely because of earlier technical difficulties during migration to GST.

Sections

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

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785564045_2492compressed.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.