Facts of the Case

The petitioner, M/s AM Wings Two Wheelers Pvt. Ltd., approached the Kerala High Court seeking relief regarding the availment of Transitional Input Tax Credit while migrating from the pre-GST indirect tax regime to the Goods and Services Tax (GST) regime.

The dispute related to the petitioner's inability to successfully avail transitional credit through the prescribed statutory forms. During the pendency of the writ petition, the Supreme Court delivered its landmark judgment in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, providing comprehensive directions to resolve transitional credit disputes across the country.

Since the controversy raised by the petitioner stood fully covered by the Supreme Court's decision, the Kerala High Court considered the matter in light of those binding directions.

Issues Involved

  1. Whether the petitioner should be permitted to file or revise Form GST TRAN-1 and TRAN-2 for claiming Transitional Input Tax Credit.
  2. Whether the benefit granted by the Supreme Court in Filco Trade Centre Pvt. Ltd. applies to the petitioner's case.
  3. Whether the authorities are required to verify the claim after reopening the GST portal and grant eligible transitional credit.

Petitioner's Arguments

  • The petitioner contended that it was unable to properly avail Transitional Input Tax Credit while migrating to the GST regime.
  • It sought an opportunity to file or revise the necessary declarations so that the eligible credit could be claimed.
  • The petitioner relied upon the relief granted by the Supreme Court regarding reopening of the GST portal for filing TRAN-1 and TRAN-2 forms.

Respondents' Arguments

The respondents submitted that the issue involved in the writ petition already stood covered by the judgment of the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another, which had laid down uniform directions applicable throughout the country regarding Transitional Credit claims.

Court Findings / Observations

The Kerala High Court observed that there was no dispute that the issue raised in the writ petition had already been completely addressed by the Supreme Court in Filco Trade Centre Pvt. Ltd.

The Court noted that the Supreme Court had issued detailed directions to resolve difficulties faced by taxpayers while claiming Transitional Credit under GST. These directions included:

  • Reopening of the GST common portal for filing or revising TRAN-1 and TRAN-2.
  • Allowing all aggrieved registered taxpayers to file or revise forms irrespective of whether they had filed writ petitions or approached the IT Grievance Redressal Committee.
  • Ensuring that the GST portal functions without technical glitches.
  • Verification of claims by the proper officer within the prescribed period after granting reasonable opportunity of hearing.
  • Reflection of admissible Transitional Credit in the Electronic Credit Ledger.
  • Issuance of suitable guidelines by the GST Council, wherever necessary.

The High Court held that these directions squarely applied to the petitioner's case as well.

Court Order

The Kerala High Court disposed of the writ petition by directing that the petitioner shall be governed by the directions issued by the Hon'ble Supreme Court in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another regarding Transitional Credit.

Accordingly, the petitioner became entitled to avail the benefit of the reopening mechanism and verification process prescribed by the Supreme Court for Transitional Input Tax Credit claims.

Important Clarification

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

Instead, the Kerala High Court applied the binding judgment of the Supreme Court in Filco Trade Centre Pvt. Ltd., thereby extending the benefit of reopening the GST portal and permitting eligible taxpayers to file or revise TRAN-1 and TRAN-2 forms, subject to verification by the tax authorities.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017 (Transitional Input Tax Credit)
  • Rule 117 of the CGST Rules, 2017
  • Transitional Credit through Form GST TRAN-1 and TRAN-2
  • Goods and Services Tax Regime
  • Supreme Court Judgment in Union of India & Another vs Filco Trade Centre Pvt. Ltd. & Another (2022 SCC OnLine SC 912)

Link to Download the Order


https://www.mytaxexpert.co.in/uploads/1785569781_2538compressed.pdf 

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