Facts of the Case

The respondent, M/s Annapoorna Motors, was unable to successfully file Form GST TRAN-1 for claiming Transitional Input Tax Credit due to difficulties associated with the GST portal. The petitioner had approached the High Court seeking another opportunity to file TRAN-1 and claim the eligible transitional credit.

The learned Single Judge directed the GST authorities to reopen the portal for filing TRAN-1 or alternatively accept the form manually if reopening the portal was not feasible. The authorities were also granted liberty to verify the claim after submission.

Aggrieved by the said order, the Union of India and other GST authorities preferred the present writ appeal before the Karnataka High Court.

Issues Involved

  1. Whether the order of the learned Single Judge directing reopening of the GST portal for filing TRAN-1 required interference.
  2. Whether taxpayers should be granted another opportunity to claim Transitional Input Tax Credit through TRAN-1.
  3. Whether the subsequent directions issued by the Hon'ble Supreme Court regarding TRAN-1 and TRAN-2 filing governed the present dispute.

Petitioner's (Appellants') Arguments

The Union of India and other GST authorities challenged the order of the learned Single Judge and sought setting aside of the directions permitting reopening of the GST portal for filing TRAN-1. During the hearing, however, it was submitted that the matter could appropriately be disposed of in terms of the subsequent directions issued by the Hon'ble Supreme Court in the connected Special Leave Petitions concerning Transitional Credit.

Respondent's Arguments

The respondent supported the order passed by the learned Single Judge and submitted that the appeal should be disposed of in accordance with the directions issued by the Hon'ble Supreme Court permitting reopening of the GST portal for filing or revising TRAN-1 and TRAN-2 forms to avail Transitional Input Tax Credit.

Court Order / Findings

The Karnataka High Court observed that the Hon'ble Supreme Court had subsequently directed GSTN to reopen the common portal for filing or revising TRAN-1 and TRAN-2 during the specified period.

The Supreme Court further directed that:

  • GSTN should reopen the portal for filing/revising TRAN-1 and TRAN-2.
  • The benefit would be available irrespective of whether the taxpayer had approached the High Court or the IT Grievance Redressal Committee.
  • GSTN should ensure that there were no technical glitches during the filing period.
  • Proper officers should verify the claims within the prescribed period after granting reasonable opportunity to the taxpayers.
  • The admissible Transitional Credit should thereafter be reflected in the Electronic Credit Ledger.

In view of these binding directions, the Karnataka High Court held that no interference with the order of the learned Single Judge was warranted. Accordingly, the writ appeal was disposed of in terms of the directions issued by the Hon'ble Supreme Court.

Important Clarification

  • Taxpayers were entitled to file or revise TRAN-1/TRAN-2 in accordance with the directions issued by the Hon'ble Supreme Court.
  • The benefit extended even to taxpayers whose cases had already been considered by the IT Grievance Redressal Committee.
  • Verification of Transitional Credit claims remains within the authority of the GST department.
  • Allowed Transitional Credit must be credited to the Electronic Credit Ledger after due verification.
  • This judgment reinforces the implementation of the Supreme Court's landmark directions relating to Transitional Credit under GST.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017
  • Rule 117 of the CGST Rules, 2017
  • Rule 117(1A) of the CGST Rules, 2017
  • Section 4 of the Karnataka High Court Act, 1961
  • Transitional Input Tax Credit (TRAN-1 & TRAN-2)

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785566835_2513compressed.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.