Transitional credit can be claimed till 31.10.2022: Gujarat HC

Prayagraj Dyeing And Printing Mills Pvt. Ltd Vs Union of India (Gujarat High Court)

Heard learned advocate Mr. Anand Nainawati for the petitioner, learned advocate Mr. Utkarsh Sharma for the Union of India and learned Assistant Government Pleader Mr. Trupesh Kathiriya for the respondent State and its authorities.

2. The petitioner M/s. Prayagraj Dyeing and Printing Mills Pvt. Ltd. is a company registered under the Companies Act, 1956, engaged in the business of carrying out job work. It is holding GST registration number.

3. By filling this petition under Article 226 of the Constitution, the petitioner has prayed as under,

“(i) to call for the records pertaining to the petitioner’s case and after going into the validity and legality thereof to grant Tran-1 credit of INR 20,70,823/- (INR Twenth Lakhs Seventy Thousand Eight Hundred and Twenty Three only) in terms of Section 140 of CGST Act, 2017 and Section 140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017, to direct the respondents to pass an appropriate order to grant credit of INR 20,70,823/- in the petitioner’s electronic credit ledger and/or GSTR-3B and/or GSTR 2, as the case may be, and allow the petitioner to utilise the same for payment of GST for future supplies,

(iii) to direct the respondents to allow the petitioners to upload the fresh FORM GST TRAN-1 electronically on GST portal or allow the petitioner to submit the fresh FORM GST TRAN-1 manually as the court may deems think fit,”

3. On 1.7.2017, GST regime has been implemented in India. Various previous taxation regimes such as Excise, Service Tax, Value Added Tax etc. have been subsumed into the GST legislation. As per the provisions of Section 140 of the CGST Act, 2017, the petitioner was eligible to migrate existing credit balance of Excise Act, 1944, Finance Act, 1994 and Gujarat VAT Act, 2003 under new GST regime. The date 27.12.2017 was the last date of filling FORM GST TRAN-1. The petitioner submitted FORM GST TRAN-1 with numerical error. As a result, instead of claiming the credit of Rs. 42,50,798/-, the petitioner could only claim the amount of Rs. 21,79,975/-. And thus the petitioner has claimed less amount.

4. On 2.1.2018, the petitioner tried to submit the revised TRAN-1 on the portal but the portal did not allow the petitioners to submit the revised TRAN-1 after 27.12.2018. The petitioner addressed E-mail letters stating that they had submitted From GST TRAN-1 but were not able to file the same due to portal snag. Despite correspondence in this regard, the respondents failed to respond which let the petitioner to file the present petition seeking the prayers as above.

5. Learned advocates appearing for the respective parties are ad idem that the issue involved and required to be addressed in this petition, has been answered by the Apex Court in case of Union of India and Anr. vs. Filco Trade Centre Pvt. Ltd and Anr. in Special Leave to Appeal No. 32709–327010 of 2018 and another allied matters decided on 22.07.2020.

6. The Supreme Court issued the following directions disposing of the Special Leave to Appeal,

“1. Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022.

2. Considering the judgments of the High Courts on the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (ITGRC).

3. GSTN has to ensure that there are no technical glitch during the said time.

4. The concerned officers are given 90 days thereafter to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties.

5. Thereafter, the allowed Transitional credit is to be reflected in the Electronic Credit Ledger.

6. If required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims.”

6.1 It goes without saying that the aforesaid decision of the Supreme Court shall govern the right of the parties.

7. The petition is accordingly disposed of in the above terms.