Enable assessee to file rectified TRAN -1 Form: Kerala HC to GST Dept

The South Indian Bank Limited Vs Union of India (Kerala High Court)

It is not in dispute in the instant case that the input tax credit accumulated in the account of the petitioner was validly taken during the pre-GST period. The returns filed by the petitioner during the relevant period have all been accepted by the revenue authorities and, in the absence of a requirement to migrate to the GST regime, the petitioner would have been able to distribute the credit to its various branches through the input service distribution mechanism that was in place prior to the introduction of the GST Act. Although the petitioner has since obtained a registration as an input service distributor under the GST Act, the non-availability of the details of the purchase invoices, on the strength of which the input credit was availed, virtually prevents the petitioner from pursuing the Form GST TRAN -1 already filed by it before the 5^th respondent. I note, however, that if the petitioner is permitted to file individual Form GST TRAN-1 in respect of each of the recipient branches, then the accumulated credit could be distributed to its various branches without having to furnish details of the invoices, on the strength of which the credit was taken during the relevant time before the introduction of GST. In effect, this procedure would facilitate the transfer of credit in a situation where the accumulation of credit as also the entitlement of the petitioner to distribute the credit to its various branches is not in dispute. I also take note of the decision of the Delhi High Court in Blue Bird Pure Pvt.Ltd. V. Union of India and Others [(2019) 68 GSTR 340(Delhi)], where, taking note of the contention of the respondents regarding the technical difficulty in permitting assessees to transfer accumulated credit to the GST regime, it was observed that the Department should either open the online portal so as to enable the assessee to file rectified TRAN -1 Form electronically or accept manually filed TRAN-1 Form with correction before a specified date so as to render justice to the assessees.

In the instant case, as already noted, the availlment of credit by the petitioner, and its entitlement to distribute the credit to its various branches is not disputed. I am therefore of the view that the 5^th respondent should either permit the petitioner to file a rectified TRAN-1 Form electronically in favour of each of its branches in the country, or accept manually filed TRAN -1 Form with the appropriate corrections, on or before 30.12.2019. The time limit specified above shall be strictly adhered to, so that the petitioner will be able to distribute the accumulated credit to its branches immediately thereafter.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

The petitioner, the South Indian Bank Limited, is before this Court aggrieved by Ext.P1 letter dated 15.05.2019 issued by the 5th respondent, whereby the latter rejected the request of the petitioner to correct a bona fide error which occurred while filing Form GST TRAN -1, on account of which the eligible credit under the earlier indirect tax laws could not be transferred to the petitioner in the GST regime. It is the case of the petitioner in the Writ Petition that it had obtained a centralised registration for its various branches, located across 30 States, in connection with their service tax registration under the erstwhile Finance Act,1994 as amended, governing the levy of service tax. The returns filed by them in the various States have been accepted for the purposes of assessment to service tax and the entitlement of the petitioner to the input tax credit availed was also accepted by the revenue authorities through the acceptance of the returns filed by the petitioner during the relevant period (April 2017 to June 2017). With effect from 1^st July 2017, consequent to the introduction of the GST regime in India, the petitioner applied for and obtained registration as an input service distributor under the GST regime. For the purposes of distributing the CENVAT credit that had accumulated in its account to the 30 branches located across the country, it preferred an application for transitioning the credit to its various branches in the country. The application in Form GST TRAN -1 that was filed by it on 22.12.2017 showed the registration number of the input service distributor that was obtained by it under the GST regime for the purposes of seeking a transfer of the accumulated credit to the respective branches. The application was rejected by Ext.P1 communication, where the stand taken by the respondents is that the petitioner had erroneously shown the GSTIN pertaining to the input service distributor instead of the GSTIN of the assessee to whom the credit had to be transferred. The said defect is stated to be non-rectifiable, and therefore, the 5^th respondent expressed its inability to assist the petitioner in the matter of transfer of credit.

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