Constitutional Validity of condition Nos. 4.3 and 4.7 of CBIC Cir. 180/12/2022-GST dated 9.9.2022 while filing/Revising TRAN-1/ TRAN-2 pertaining to ‘Transitional Credit’─Analysis of SC Order
Background.─As per Rule 117, CGST Rules, 2017 claims for Transitional Credit had to be filed within 90 days from 1.7.2017. Thereafter the last date for furnishing Tran-1/Tran-2 Forms was extended, finally up to 31.3.2019. However, due to technical glitches in the GST portal, coupled with other reasons, a large number of assesses could not file respective Forms for availing ITC on opening stock. It resulted into a lot many Litigations in various High Courts, Supreme Court & appeals at appellate stage.
Judicial Pronouncement in view of Rigid approach of CBIC.─To mitigate the hardship caused to various citizens of India & to resolve the issue amicably, the Hon’ble Supreme Court in Union of India v. Filco Trade Centre (P) Ltd (2022) 38 J.K.Jain’s GST & VR 47 allowed 60 days time to all the aggrieved registered assessees to file/revise Tran-1/Tran-2 for claiming ITC u/s 140, GST Act, 2017. Previously the time was allowed from 1.9.2022 till 31.10.2022 for opening GSTN. Subsequently, as requested by the Govt., the time limit for opening GSTN Portal was extended by 4 weeks per order dated 2.9.2022 of the Hon’ble Supreme Court : (2022) 38 J.K.Jain’s GST & VR 225.
Binding Nature of SC Order─The order of the Supreme court has been passed in exercise of our powers u/Art.142 read with Art.141 of the Constitution of India. Hence it is a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities.
Scope of Interpretation of Supreme Court directives by CBIC.─ In tune with the orders dated 11.7.2022 & 3.9.2022, the CBIC issued Cir. 180/12/2022-GST dated 9.9.2022 permitting registered assessees to file/revise Tran-1/Tran-2 for claiming ITC u/s 140, GST Act, 2017 during 2 months period starting from 1.10.2022 to 30.11.2022.
However, the CBIC in their Circular dt. 9.9.2022 has put up the following additional condition to debar the legitimate claims inspite of no such condition put up by the Hon’ble Supreme Court in orders dated 11.7.2022 & 3.9.2022;
“4.3 No claim for transitional credit shall be filed in table 5(b) & 5(c) of TRAN-1 in respect of such C/F/H/I-Forms which have been issued after the due date prescribed for submitting the declaration in TRAN-1, i.e., after 27.12.2017.”
“4.7….In cases of pending appeals, filing the declaration is not appropriate.”
In view of the above, the Guidelines has been issued by CBIC, in its Cir. dated 9.9.2022, are not in the tune with the SC directives as under;
A) The Hon’ble Supreme Court in its order has permitted all aggrieved registered assessees in India to;
i) file ITC claim in Tran-1/Tran-2,
ii) revise ITC claim,
within the extended time frame of two months.
B) The above directions were issued, irrespective of the facts that,
a) the case of the taxpayer has been decided by ITGRC,
b) the taxpayer has not filed any petition in the High Court,
c) the taxpayer has not filed Tran-1/Tran-2, previously,
C) The Hon’ble Supreme Court has not put up any condition to debar any of the registered assessees, in any manner.
Our Views.─
i) Objectives of issuance of SC Order.─The Hon’ble Supreme Court Order has given directions in the context of multifarious difficulties being faced by all citizens of India on account of multiple technical glitches in the GSTN Portal leading to non filing of Tran-1/Tran-2/Revised Forms & Loopholes in the GST Act/Rules coupled with prolonged Litigations. As such, the Theme of Supreme Court Order must be read in the context in which it has been issued[1], i.e., to ease hardship being faced by various citizens of India, to resolve the issue of non-filing of Tran-1/Tran-2/Revised Forms, by the due date, amicably, coupled with seamless flow of ITC & to end up lot many litigations at different Forums.
ii). The Submission of the Forms/Revising the Forms stand permitted from 1.10.2022 to 30.11.2022, as a one time measure, meaning thereby that the C/F/H/I-Forms received after the earlier due date (i.e., 27.12.2017) shall also be taken into account while Submission of the Tran-1/Revising the Forms.
iii) In cases of pending appeals/adversely decided appeals, Submission of the Tran-1/-2/Revising the Forms should be permitted, in tune with SC Order.
iv).“Issuance of appropriate guidelines to the field formations in scrutinizing the claims”, in tune with Supreme Court Order do not cover stipulating any condition by CBIC, to debar the filing of/revising of claim by any of the assessees. As such, it will be against the binding Orders of the Supreme Court & tantamount to contempt of SC Orders.
v). Circular contrary to Directives laid down by the Supreme Court and contrary views expressed in circulars lose its validity and become nonest[2].
vi). Since circulars issued by CBIC are binding on the field staff[3], the CBIC should withdraw this contrary conditions in the circular which is not in tune with Hon’ble Supreme court directives so as to afford justice to various citizens of India.
vii). Even if the ITC claim filed earlier has been regretted by the assessing/ appellate authority, in view of the spirit of the Hon’ble Supreme Court order, it would be permissible to file revised Tran-1/Tran-2.
vii). In case the Tran-1/Tran-2 have not been filed earlier, it can be very well be filed now within the permissible time limit of two months.
For further clarifications, the author may be contacted. His article may also be referred to in (2022) 38 J.K Jain’s GST & VR, Page R-25.
CA Om Prakash Jain s/o J.K.Jain, Jaipur, Tel: 9414300730 [email protected]
[1]. CA No.1019/2014 decided on 29.1.2014, Deepak Bhandari v. HP State Indl. Develop. Corpn. Ltd. SC
[2]. (2020) 33 J.K.Jain’s GST & VR 361 Bharti Airtel Limited v. Union of India & Ors. (Delhi)
[3]. (2000) 11 J.K.Jain’s Vat Reporter 231 Commissioner of C/E v. Ratan Melting & Wire Industries SC
(2020) 33 J.K.Jain’s GST & VR 361 Bharti Airtel Limited v. Union of India & Ors. (Delhi)
(2020) 33 J.K.Jain’s GST & VR Precot Meridian Limited v. The Commissioner of Customs (Mad)
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