Facts of the Case

The petitioner, Prayagraj Dyeing and Printing Mills Pvt. Ltd., is a company engaged in the business of job work and is registered under the GST regime.

Upon the introduction of GST on 1 July 2017, the petitioner became entitled to carry forward eligible transitional input tax credit under Section 140 of the CGST Act, 2017. While filing FORM GST TRAN-1, the petitioner inadvertently committed a numerical error. Instead of claiming the eligible transitional credit of ₹42,50,798, only ₹21,79,975 was claimed.

After discovering the mistake, the petitioner attempted to revise the TRAN-1 form on the GST portal. However, the portal did not permit revision after the prescribed deadline. The petitioner also submitted emails and representations to the authorities highlighting the issue, but no effective response was received. Consequently, the petitioner approached the Gujarat High Court seeking permission to revise TRAN-1 and claim the remaining transitional credit.

Issues Involved

  1. Whether the petitioner should be permitted to revise FORM GST TRAN-1 for correction of an inadvertent numerical error.
  2. Whether the petitioner is entitled to claim the balance transitional input tax credit under Section 140 of the CGST Act.
  3. Whether the relief granted by the Supreme Court in Union of India vs. Filco Trade Centre Pvt. Ltd. would apply to the petitioner.

Petitioner’s Arguments

  • The petitioner was legally entitled to transitional credit under Section 140 of the CGST Act.
  • Due to a genuine numerical mistake while filing TRAN-1, only part of the eligible credit was claimed.
  • The petitioner attempted to rectify the error immediately after discovering it, but the GST portal did not permit revision.
  • Despite making representations before the authorities, no relief was granted.
  • Therefore, the petitioner sought permission to revise TRAN-1 and avail the remaining transitional credit.

Respondent’s Arguments

The respondents submitted that the issue raised in the petition stood covered by the judgment of the Hon'ble Supreme Court in Union of India & Another vs. Filco Trade Centre Pvt. Ltd. & Another, wherein comprehensive directions had already been issued regarding reopening of the GST portal for filing or revising TRAN-1 and TRAN-2 forms.

Court Order / Findings

The Gujarat High Court observed that the controversy involved in the present petition had already been conclusively addressed by the Hon'ble Supreme Court in Union of India vs. Filco Trade Centre Pvt. Ltd.

The Court noted the Supreme Court's directions, including:

  • Reopening of the GST common portal from 1 September 2022 to 31 October 2022 for filing or revising TRAN-1 and TRAN-2.
  • All aggrieved registered taxpayers were permitted to file or revise the forms irrespective of whether they had approached any High Court or ITGRC.
  • GSTN was directed to ensure that no technical glitches occur during the reopening period.
  • Proper officers were directed to verify claims within 90 days after filing and pass appropriate orders on merits.
  • Approved transitional credit was to be reflected in the Electronic Credit Ledger.
  • GST Council could issue appropriate guidelines for scrutiny of such claims.

Accordingly, the Gujarat High Court disposed of the petition in terms of the directions issued by the Hon'ble Supreme Court and observed that the rights of the parties would be governed by those directions.

Important Clarification

  • Genuine mistakes in filing TRAN-1 were addressed through the Supreme Court's directions in Filco Trade Centre Pvt. Ltd.
  • Eligible taxpayers were given an opportunity to file or revise TRAN-1/TRAN-2 irrespective of earlier litigation.
  • Verification of transitional credit claims remained subject to scrutiny by the proper officer.
  • The High Court followed the binding directions of the Supreme Court without issuing separate substantive directions.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017
  • Rule 117 of the Central Goods and Services Tax Rules, 2017
  • Article 226 of the Constitution of India

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785566979_2527compressed.pdf  

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