Facts of the Case

This appeal by the revenue under the Central Goods and Services Tax Act, 2017 arose from a common order dated 4 March 2020 passed by a Single Bench of the Calcutta High Court in W.P. No.24020(W) of 2019, allowing the respondent-assessee, Baljit Iron Private Limited, relief connected with availing transitional credit through Form TRAN-1/TRAN-2. The Union of India, as appellant, also sought condonation of a 643-day delay in filing the appeal. While the appeal was pending, the Hon'ble Supreme Court, in Union of India v. Filco Trade Centre Pvt. Ltd. (SLP(C) Nos.32709-32710/2018), passed a comprehensive order dated 22 July 2022 directing GSTN to reopen the common portal for filing/revising TRAN-1 and TRAN-2 forms for two months (later extended), covering all aggrieved registered assessees irrespective of pending litigation.

Issues Involved

  1. Whether the 643-day delay in filing the departmental appeal deserved condonation.
  2. Whether the appeal against the Single Bench's order allowing transitional credit relief survived in light of the Supreme Court's subsequent comprehensive directions in Filco Trade Centre.

Petitioner's Arguments

  • The Union of India (revenue) sought condonation of delay, relying on the reasons stated in its supporting affidavit.
  • It pressed the appeal against the Single Bench's order permitting the assessee's transitional credit claim.

Respondent's Arguments

  • The respondent-assessee's counsel did not seriously contest condonation, and did not press for independent adjudication of the appeal once the Supreme Court's Filco directions were placed before the Court.
  • The respondent's position was, in effect, that the Filco directions rendered separate adjudication of the appeal unnecessary.

Court Order / Findings

  • The Division Bench found the delay-condonation reasons "not very convincing" but condoned the 643-day delay having regard to the Supreme Court's own reasoned order dated 22 July 2022 in Filco Trade Centre.
  • The Court held that in light of the Supreme Court's comprehensive directions reopening the GST common portal for filing/revising TRAN-1 and TRAN-2 for all aggrieved registered assessees, no separate orders were required in the appeal.
  • The appeal, along with the connected application, was disposed of in terms of the Supreme Court's order rather than on an independent merits finding.

Important Clarification

  • Where the Supreme Court has issued a nationwide, self-executing direction covering the very transitional-credit dispute at issue (as in Filco Trade Centre), a pending High Court appeal on the same subject is often disposed of by simply directing compliance with that order, without a separate merits ruling.
  • Registered assessees with unresolved TRAN-1/TRAN-2 disputes could rely on the Filco window (as extended) to file or revise their transitional credit claims, and the assessing officers were required to verify and decide such claims within 90 days of the window closing.

Sections Involved

  • Section 140 of the CGST Act, 2017 - governs migration/carry-forward of pre-GST transitional credit into the electronic credit ledger, the subject of the TRAN-1/TRAN-2 forms.
  • Rule 117 of the CGST Rules, 2017 - prescribes the manner and time-limit for filing TRAN-1 to claim transitional credit.

Decision – In Favour of

The appeal was disposed of in terms of the Supreme Court's directions in Filco Trade Centre without an independent merits finding for this specific case; since those directions opened a fresh window for assessees to avail transitional credit, the practical effect favoured the Assessee, though the Court expressed no view on the correctness of the Single Bench's original order.

Case Details

Calcutta High Court (Appellate Side), M.A.T. No.16 of 2022 with I.A. Nos. CAN 1 and CAN 2 of 2022; Coram: Hon'ble Mr. Justice T.S. Sivagnanam and Hon'ble Mr. Justice Bivas Pattanayak; decided on 26 July 2022.

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