Facts of the Case

The petitioner, Locon Solutions Pvt. Ltd., a service provider registered at Gurugram, Haryana, was earlier registered under the Central Goods and Services Tax Act, 2017 with its headquarters at Mumbai, Maharashtra. Upon shifting its headquarters to Gurugram, the petitioner was left with accumulated and unutilised Input Tax Credit at its earlier registration. It intended to transfer this accumulated ITC to its new registration at Gurugram, but found no enabling provision under the GST law permitting inter-state transfer of unutilised ITC between branches/units upon relocation, nor for refund of the same. The petitioner had made a representation dated 15.11.2021 to the Central Board of Indirect Taxes and Customs (CBIC) highlighting this ambiguity, but received no decision. It accordingly approached the Punjab & Haryana High Court by way of CWP-6882-2022 (O&M), seeking a direction to the CBIC to decide the representation.

Issues Involved

  1. Whether the GST law provides a mechanism for inter-state transfer of unutilised input tax credit from one branch/unit to another upon shifting of the branch.
  2. Whether the CBIC could be directed to examine and decide the petitioner's representation on this ambiguity.

Petitioner's Arguments

  • There is an ambiguity in the GST law regarding inter-state transfer of unutilised input tax credit from one branch/unit to another upon relocation, and equally regarding refund of such credit.
  • The petitioner had accumulated unutilised ITC at its earlier Mumbai registration prior to shifting headquarters to Gurugram, and had no statutory mechanism to carry it forward to the new registration.
  • A representation dated 15.11.2021 had already been filed before the CBIC raising this grievance, but remained undecided.

Respondent's Arguments

  • The Union of India, represented by counsel, did not substantively contest the petition; the matter proceeded primarily on the petitioner's grievance regarding the pending representation.

Court Order/Findings

  • The Division Bench observed that the writ petition raised an "innocuous prayer" for a decision on the pending representation, and declined to opine on the merits of the underlying entitlement to transfer or refund of ITC.
  • The Court disposed of the petition at the threshold with a direction to the CBIC, through its Chairman, to examine the petitioner's grievance in light of the representation dated 15.11.2021 (Annexure P-1).
  • CBIC was directed to take a final view in the matter within a period of two months from receipt of a certified copy of the order.

Important Clarification

  • Where the GST framework does not expressly provide a mechanism for a specific eventuality — here, inter-state transfer of unutilised ITC on relocation of a branch — courts will typically decline to legislate a solution in writ jurisdiction and instead direct the competent authority (CBIC/GST Council) to examine and resolve the representation within a fixed timeframe.
  • Such disposals leave the substantive question of law open and do not amount to a finding on entitlement; the taxpayer must await the authority's reasoned decision, which itself remains open to further challenge.

Sections Involved

  • Central Goods and Services Tax Act, 2017 — general framework governing registration and input tax credit; no specific provision found for inter-branch/inter-state ITC transfer on relocation.
  • Article 226, Constitution of India — writ jurisdiction invoked to compel a decision on the pending representation.

Decision – In Favour of

Disposed of with directions, without a finding on merits — the Court neither ruled in favour of the Assessee nor the Department on the substantive ITC-transfer question, but directed CBIC to decide the petitioner's representation within two months.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: Punjab & Haryana High Court, Chandigarh
  • Case No.: CWP-6882-2022 (O&M)
  • Coram: Hon'ble Mr. Justice Tejinder Singh Dhindsa and Hon'ble Mr. Justice Pankaj Jain
  • Date of Order: 05.04.2022

Link to Download the Order

Download the full judgment (PDF)

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