Facts of the Case

  • The petitioners were registered taxpayers who migrated from the pre-GST indirect tax regime to the GST regime.
  • They intended to carry forward eligible input tax credit through Form GST TRAN-1.
  • Due to technical and procedural difficulties, they could not successfully avail the transitional credit.
  • Various representations were submitted before the GST authorities and grievance redressal authorities seeking relief.
  • Since no effective remedy was granted, the petitioners approached the Kerala High Court seeking permission to claim the eligible transitional credit.
  • During the pendency of the writ petitions, the Supreme Court passed its judgment in Union of India vs Filco Trade Centre Pvt. Ltd., providing a comprehensive solution for all similarly situated taxpayers.

Issues Involved

  1. Whether taxpayers who were unable to file or revise Form GST TRAN-1 due to technical or procedural difficulties should be permitted to claim transitional input tax credit?
  2. Whether the benefit of the Supreme Court's decision in Filco Trade Centre Pvt. Ltd. applies to the petitioners?
  3. Whether GST authorities are required to reopen the GST portal and verify transitional credit claims in accordance with the Supreme Court's directions?

Petitioner's Arguments

  • The petitioners contended that they possessed legitimate transitional input tax credit under the GST law.
  • They argued that technical glitches prevented proper filing of Form GST TRAN-1.
  • Several representations were submitted before the concerned authorities, but no effective relief was granted.
  • Since transitional credit is a valuable statutory right, denial of such credit merely because of technical difficulties would be arbitrary and unjust.
  • The petitioners sought permission to file or revise the required forms so that eligible credit could be carried forward.

Respondents' Arguments

  • The respondents relied upon the statutory provisions governing transitional credit under the GST regime.
  • During the hearing, it was brought to the notice of the Court that the Hon'ble Supreme Court had already settled the controversy in Union of India vs Filco Trade Centre Pvt. Ltd.
  • Therefore, the matter was governed by the directions issued by the Supreme Court regarding reopening of the GST portal and verification of transitional credit claims.

Court Order / Findings

The Kerala High Court observed that the controversy involved in the writ petitions stood completely resolved by the judgment of 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:

  • GSTN shall reopen the common portal for filing or revising Forms GST TRAN-1 and TRAN-2 during the period specified by the Supreme Court.
  • Any eligible registered taxpayer shall be permitted to file or revise the relevant forms irrespective of whether a writ petition had been filed or whether the matter had been decided by the IT Grievance Redressal Committee.
  • GSTN shall ensure that no technical glitches occur during the reopening period.
  • The jurisdictional authorities shall verify the transitional credit claims within the time prescribed by the Supreme Court after granting reasonable opportunity of hearing.
  • Eligible transitional credit shall thereafter be reflected in the Electronic Credit Ledger.
  • The writ petitions were disposed of in terms of the Supreme Court's directions.

Important Clarification

This judgment does not create any independent legal principle but applies the binding directions issued by the Hon'ble Supreme Court in Union of India vs Filco Trade Centre Pvt. Ltd.

The decision confirms that taxpayers who were denied transitional credit due to technical issues are entitled to the benefit of the Supreme Court's one-time window for filing or revising TRAN-1 and TRAN-2, subject to verification by the GST authorities.

Sections Involved

  • Section 140 of the Central Goods and Services Tax Act, 2017
  • Rule 117 of the CGST Rules, 2017
  • Transitional Credit Provisions under the GST Regime
  • Forms GST TRAN-1 and GST TRAN-2

Link to Download the Order

 https://www.mytaxexpert.co.in/uploads/1785569931_2552compressed.pdf 

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