2021 (3) TMI 859 - HC - GST

Seeking grant of transitional credit under Section 140(1) of the CGST Act - amount of credit was shown in the wrong column in the Form GST TRAN 1 - HELD THAT - The issue arising in the present writ application is squarely covered by a judgment of this Court in the case of JAKAP METIND PVT LTD. VERSUS UNION OF INDIA THROUGH THE SECRETARY AND 6 OTHER (S) 2019 (11) TMI 710 - GUJARAT HIGH COURT where it was held that respondents are directed to either open the online portal so as to enable the petitioner to again file the rectified Form GST TRAN- 1 electronically or accept the manually filed FORM GST TRAN 1 with corrections on or before 30th November, 2019. The respondents are directed to either open the online portal, so as to enable the writ applicants to again file rectified Form GST TRAN-1 electronically or accept the manually filed from the GST TRAN-1 with necessary corrections on, or before, 18.05.2021 - application allowed.

Summary

Issues:
- Claim for transitional credit under Section 140(1) of the CGST Act.
- Denial of transitional tax credit due to incorrect filing in Form GST TRAN 1.
- Legal remedy sought through a writ application under Article 226 of the Constitution of India.

Analysis:
1. Claim for Transitional Credit: The writ applicants sought a writ of mandamus to direct the respondents to grant transitional credit under Section 140(1) of the CGST Act in their electronic credit ledger. The applicants had unutilized input tax credit under the Central Excise Act and the Finance Act, which they claimed through GST Form TRAN 1 within the stipulated time period. However, the credit was not reflected in the electronic ledger, leading to the need for legal intervention.

2. Denial of Transitional Tax Credit: The authorities denied the transitional tax credit to the applicants citing an error in filing Form GST TRAN 1. The issue was similar to a previous judgment by the Court in a related case, where the Court held that denial of transitional credit due to a technical error in filing was unjustified. The Court emphasized that bona fide errors should be rectified by the system, and the denial of legitimate credit was against the constitutional provisions.

3. Legal Remedy through Writ Application: The writ application was filed under Article 226 of the Constitution of India seeking appropriate relief. The Court, after hearing arguments from both parties, directed the respondents to either allow the rectified filing electronically or accept manually filed corrections within a specified timeline. The judgment highlighted the importance of ensuring that taxpayers are not unduly deprived of their rightful credits due to technical errors in filing procedures.

In conclusion, the High Court granted the writ application, directing the authorities to facilitate the correction of the transitional credit filing by the applicants. The judgment underscored the need for a fair and efficient system that enables taxpayers to claim their legitimate credits without being penalized for inadvertent errors in filing procedures.