The Petitioner is a wholesaler, importer and distributor of decorative sheets, which are used for furniture manufacturing. The petitioner was not registered under central laws in Pre-GST regime. As per section 140(3) of the Central Goods and Service Tax Act, 2017 (‘CGST Act’) r.w. Rule 117(4) of the Central Goods and Service Tax Rules, 2017 (‘CGST Rules’), the Petitioner was eligible to claim credit of custom duties and eligible duties (deemed excise duty) on goods held in stock on the appointed date i.e. as on 01.07.2017. The Petitioner was required to file Form TRAN -1 to declare the stock held on the appointed date i.e. as on 01.07.2017 and claim credit for custom duties. To claim credit of eligible duties (deemed excise duty), the Petitioner was required to file Form TRAN – 2 as and when goods held in stock on appointed date are sold.
The Petitioner’s consultant while filing Form TRAN – 1, inadvertently filled in the details of eligible duties in column titled as “Eligible Duties and Taxes (Central Tax)” in Part (b) of column 7 of Form TRAN – 1 instead of filling the said details in Form TRAN – 2 as and when sale of goods held in stock on appointed date took place. Due to this inadvertent human error, the Petitioner was unable to generate Form TRAN – 2 and file the same.
Subsequently, the Petitioner received notice from department to verify the Petitioner’s claim of Transition credit under Form TRAN – 1. In the course of verification, the department pointed out the error in filing Form TRAN -1. Also due to error in filing the details of eligible duties in column titled as “Eligible Duties and Taxes (Central Tax)” in Part (b) of column 7 of Form TRAN – 1, in department’s system it reflected as claimed made u/s 140(5) of the CGST Act instead of section 140(3) of the CGST Act and for this reason Petitioner was directed to reverse the credit claimed by him in Form TRAN -1.
The Petitioner approached the department to allow him to file revise Form TRAN – 1 and allow it to file Form TRAN – 2 to rectify his mistake and claim the credit in correct way. However, Petitioner was given to understand that there is no way out to file revised Form TRAN – 1 and allow Petitioner to file Form TRAN – 2. Petitioner took up the matter with Commissioner of CGST, but his efforts were not fruitful. The Petitioner thereafter made representation to GST Council, who issued direction stating that “an IT-grievance redressal mechanism is set up in terms of a Circular No. 39/13/2018 – GST dated 03.04.2018 issued by CBIC. Accordingly, you may file your IT related grievance through field officer or nodal officer of your jurisdiction, for consideration of your grievance by IT-Grievance Redressal Committee.”
Since in the present case there was no IT glitch and only inadvertent human error and also time limit to approach IT-Grievance Redressal Committee was already expired, the Petitioner filed Writ Petition before Hon’ble Bombay High Court.
The Hon’ble Bombay High Court vide its order dated 29.11.2018 disposed of the Writ Petition directing Petitioner to make representation before IT-Grievance Redressal Committee as per direction of GST council and if IT-Grievance Redressal Committee does not take any action on Petitioner’s representation, Petitioner has liberty to again approach this Court.
From above, following are the conclusions based on Hon’ble Bombay High Court order and GST council directions:
Key Takeaways from the Decision –
The High Court appreciated the fact that the Petitioner made a proper stepwise representation i.e. first before the Commissioner of CGST and then before the GST Council. In the case of O/E/N India Ltd as reported in (TS-611-HC-2018(BOM)-NT), this exercise was not carried out and therefore, the High Court directed O/E/N to make representation before CBIC.
Case Represented by Shreyash Shah (Advocate) & Rukshin Ghiara (Advocate)
Assisted by Kunal Shah (Chartered Accountant)