Facts of the Case

The petitioner, Pinnacle Vehicles & Services Pvt. Ltd., a company with its registered office at Mannuthy, Thrissur, represented by its Director Gaabi Gafoor, filed this writ petition before the High Court of Kerala at Ernakulam under Article 226 of the Constitution, impugning an order dated 14.02.2023 passed by the Superintendent of Central Tax & Central Excise, Kozhikode. The petitioner had claimed Transitional Credit of Rs.54,10,677/- in TRAN-1 under Table 7(b), representing excise duty and taxes paid on closing stock as on 30.06.2017 valued at Rs.2,17,22,425/-. The petitioner attributed its inability to submit supporting documents partly to a portal error while filing TRAN-3 and partly to devastating floods in August 2018 and 2019 that damaged its vehicles, spare parts, infrastructure and records; it submitted reconstructed worksheets collected from suppliers instead of original invoices. On verification, the department found the claim exceeded eligible transitional credit under Section 140(5)/140(7) of the CGST Act, 2017, and rejected it by the impugned order dated 25.10.2023.

Issues Involved

  1. Whether the petitioner discharged the burden of proof cast upon it under Section 155 of the CGST Act to substantiate its claim for Transitional Credit under Section 140(5)/140(7).
  2. Whether the rejection of the Transitional Credit claim suffered from any error of law or jurisdiction warranting interference under Article 226 of the Constitution.

Petitioner's Arguments

  • Claimed Transitional Credit of Rs.54,10,677/- representing excise duty and tax paid on closing stock as on 30.06.2017, as reflected in Table 7(b) of TRAN-1.
  • Attributed its inability to upload TRAN-3 and to include certain CTD details in TRAN-1 to technical errors on the GST portal.
  • Explained that original invoices and records could not be produced because devastating floods in August 2018 and 2019 damaged the petitioner's vehicles, spare parts, infrastructure and records.
  • Submitted tabular worksheets reconstructed from figures collected from its suppliers as the best available evidence of the claim, relying on CBIC Circular No.180/12/2022-GST and a Supreme Court order extending the window for filing transitional credit forms.

Respondent's Arguments

  • The department, as reflected in the impugned order, thoroughly verified the TRAN-1 and TRAN-2 filings and found the claimed amount of Rs.54,10,677/- exceeded the transitional credit eligible under Section 140(5)/140(7), while the petitioner had claimed a zero amount in the revised TRAN-2 for credit under Section 142(11)(c).
  • The petitioner was directed to submit original invoices and connected documents by 07.02.2023 but failed to do so.
  • Under Section 155 of the CGST Act, the burden lies on the claimant to prove eligibility for Input Tax Credit/Transitional Credit, and the petitioner had failed to establish its claim with cogent evidence.

Court Order/Findings

  • The Court found that the Superintendent had considered the relevant statutory provisions while rejecting the claim and had not committed any error of law or jurisdiction.
  • The petitioner failed to discharge the burden of proof cast upon it under Section 155 of the CGST Act, 2017, to establish its entitlement to Transitional Credit of Rs.54,10,677/-.
  • Exercising the limited jurisdiction of judicial review under Article 226, the Court held it could not re-examine the case on merits where the authority had committed no error of law or jurisdiction.
  • The writ petition was accordingly dismissed, without costs.

Important Clarification

  • The burden of proving eligibility for Transitional Credit under Section 140(5)/140(7) of the CGST Act lies squarely on the claimant under Section 155 of the Act; this burden is not discharged merely by reconstructed worksheets or explanations for the absence of original documents, even where the absence is attributable to circumstances such as floods.
  • Writ courts exercising judicial review under Article 226 will not reappreciate factual findings on transitional credit eligibility where the assessing authority has considered the relevant provisions and has not committed any error of law or jurisdiction.

Sections Involved

  • Section 140(5) and 140(7) of the CGST Act, 2017 — provisions governing eligibility for transitional credit of duty/tax paid under the earlier regime.
  • Section 142(11)(c) of the CGST Act, 2017 — transitional provision relevant to credit already availed under earlier law.
  • Section 155 of the CGST Act, 2017 — places the burden of proving eligibility for input tax credit or transitional credit on the person claiming it.
  • Article 226 of the Constitution of India — the writ jurisdiction invoked, exercised here on a limited judicial-review basis.

Decision – In Favour of

The decision was in favour of the Department. The Court upheld the rejection of the petitioner's Transitional Credit claim of Rs.54,10,677/-, holding that the petitioner had failed to discharge the statutory burden of proof under Section 155 of the CGST Act, and dismissed the writ petition.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.34839 of 2023
  • CNR: Not available on record
  • Coram: Justice Dinesh Kumar Singh
  • Decision Date: 25 October 2023
  • Disposal Nature: Writ petition dismissed

Link to Download the Order

Download the full judgment (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.