Facts of the Case

The petitioner approached the Andhra Pradesh High Court by filing a writ petition under Article 226 of the Constitution of India seeking reopening of the GST common portal to enable filing of FORM GST TRAN-1 for claiming transitional input tax credit amounting to ₹42,05,365/- under Section 140(3) of the Central Goods and Services Tax Act, 2017.

The petitioner submitted that due to technical difficulties, it could not file TRAN-1 within the prescribed period and consequently could not carry forward the eligible credit. The petitioner also challenged the consequential demand initiated through Form GST DRC-01 dated 02.07.2020 and alternatively requested permission to submit the claim manually.

During the pendency of the writ petition, reliance was placed upon the judgment of the Hon'ble Supreme Court dated 22.07.2022 concerning reopening of the GST portal for filing TRAN-1 and TRAN-2 forms.

Issues Involved

  1. Whether the petitioner should be permitted to file FORM GST TRAN-1 for claiming transitional input tax credit after expiry of the prescribed time limit.
  2. Whether the petitioner is entitled to the benefit of the directions issued by the Hon'ble Supreme Court for reopening of the GST portal.
  3. Whether technical glitches preventing filing of TRAN-1 can deprive an assessee of legitimate transitional credit.

Petitioner's Arguments

  • The petitioner was legally entitled to transitional credit under Section 140(3) of the CGST Act, 2017.
  • Due to technical issues on the GST portal, TRAN-1 could not be filed within the stipulated period.
  • The petitioner relied upon the Supreme Court order dated 22.07.2022, wherein GSTN was directed to reopen the common portal for filing or revising TRAN-1 and TRAN-2 forms.
  • It was argued that the respondents should either reopen the portal or permit manual filing of the transitional credit claim.
  • The petitioner further requested that recovery proceedings initiated through GST DRC-01 should not continue until the legitimate credit claim is considered.

Respondents' Arguments

  • The Government Pleader for Commercial Taxes opposed the writ petition.
  • However, after considering the Supreme Court judgment governing reopening of the GST portal, the dispute primarily revolved around whether the petitioner was entitled to avail the benefit of those directions.

Court Order / Findings

The Andhra Pradesh High Court observed that the Hon'ble Supreme Court had already issued comprehensive directions requiring GSTN to reopen the common portal for filing TRAN-1 and TRAN-2 forms from 01.09.2022 to 31.10.2022.

The Supreme Court further directed that:

  • Every aggrieved registered assessee should be permitted to file or revise TRAN-1/TRAN-2 irrespective of whether a writ petition had been filed.
  • GSTN should ensure that no technical glitches occur during the reopening period.
  • Jurisdictional authorities should verify the claims within 90 days after filing and pass appropriate orders after granting reasonable opportunity of hearing.
  • Approved transitional credit should thereafter be reflected in the Electronic Credit Ledger.

The High Court noted that these directions were not confined to any particular assessment year but were intended to benefit all eligible taxpayers who had earlier failed to file the forms due to technical difficulties.

Accordingly, the writ petition was allowed to the limited extent of granting the petitioner the benefit of the Supreme Court directions for filing TRAN-1/TRAN-2 during the reopening period. No order as to costs was passed.

Important Clarification

  • The reopening of TRAN-1/TRAN-2 portal pursuant to the Supreme Court order applies to all eligible registered taxpayers affected by technical glitches.
  • Filing or revision of TRAN forms was permitted irrespective of whether the taxpayer had previously filed a writ petition.
  • Filing of TRAN forms does not automatically result in grant of credit. The claim remains subject to verification by the jurisdictional GST authorities.
  • Allowed credit is required to be reflected in the Electronic Credit Ledger after due verification.

Sections Involved

  • Section 140(3), Central Goods and Services Tax Act, 2017
  • Article 226 of the Constitution of India
  • Transitional Credit Provisions under the CGST Act
  • FORM GST TRAN-1
  • FORM GST TRAN-2

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785566721_2502compressed.pdf  

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