Case Law Details
Malabar Cements Ltd. Vs Assistant Commissioner (Kerala High Court)
Introduction: The Kerala High Court recently addressed a crucial issue regarding the time limit for claiming transitional credit under the Goods and Services Tax (GST) Act. The petitioner, Malabar Cements Ltd., had filed a writ petition seeking to challenge the denial of transitional credit for inward supplies made before 01.07.2017. The court’s decision centered on the rejection of the petitioner’s application for extending the limitation period for claiming transitional credit beyond the prescribed time frame.
Detailed Analysis: Malabar Cements Ltd. sought transitional credit for input tax in respect of supplies made before the implementation of the GST Act on 01.07.2017. According to Section 140(5) of the GST Act, a registered person can claim transitional credit within thirty days, with a provision for an extension of up to sixty days, subject to the Commissioner’s order. However, the Commissioner can extend the period only on a sufficient cause being shown.
In this case, the petitioner filed the TRAN-1 return on 27.12.2017, after the initial thirty-day period had expired. Subsequently, the petitioner submitted an application for extending the limitation period, but it was filed more than five years after the TRAN-1 return. The Commissioner rejected the application, citing the delay and the absence of a reasonable cause.
The court, in its analysis, highlighted the provisions of Section 140(5) and emphasized that unless the Commissioner passes an order extending the limitation period, an assessee cannot claim transitional credit beyond thirty days. The rejection of the application after such a significant delay was considered justified.
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