Tata Unistore Limited Vs Commissioner CGST & Ex. (GSTAT Thane Bench)
The Thane Division Bench of GSTAT allowed Tata Unistore Limited’s appeal and set aside the impugned order concerning transitional ITC carried from the pre-GST regime into GST. The Appellant, engaged in operating an e-commerce platform, had been registered under the service tax regime and availed CENVAT credit on eligible input services and VAT credit on goods sold through its platform. Following the introduction of GST from 01.07.2017, it transitioned the credit reflected in its pre-GST returns through Form GST TRAN-1 under Section 140 of the CGST Act read with Rule 117 of the CGST Rules.
The disputed credit included CENVAT credit of Rs. 31,83,93,390, Krishi Kalyan Cess of Rs. 74,67,109 and VAT credit of Rs. 22,14,479. A Show Cause Notice dated 18.01.2022 was issued under Section 74(1) of the CGST Act alleging that the Appellant had not established eligibility of the transitioned credit. The Original Authority and 1st Appellate Authority confirmed the demand, along with interest and 100% penalty.
The Tribunal first considered whether GST authorities had jurisdiction to examine the admissibility of credit availed under the erstwhile laws. Referring to Sections 142(6)(a) and 174 of the CGST Act, it held that proceedings concerning inadmissible credit under the erstwhile regime could be initiated only under the provisions of the erstwhile laws. The GST provisions did not empower CGST authorities to examine the correctness of CENVAT credit availed under the pre-GST regime where such credit had not been disputed under that regime.
