2021 (5) TMI 261 - HC - GST

Rejection of request for carry forward of Input Tax Credit (ITC) into the Goods and Service Tax regime - argument by Revenue is that there had been several opportunities for rectification of the mistake as time had been extended till 31.03.20201 - HELD THAT - In the present case, the error is seen to be inadvertent, constituting a human error. The Revenue does not dispute this either. Moreover, the era of GST is nascent and thus a rigid view should not be taken in procedural matters such as the present one. The petitioner is thus be permitted to transition the credit. After all, the consequence of such transition is only the availment of the credit and not the utilization itself, which is a matter of assessment and which can be looked into by the Assessing Officer at the appropriate stage - The third respondent, i.e., Deputy Commissioner of GST Policy, the Nodal Officer will enable the modification to be effected as well as the transition within a period of four (4) weeks from date of uploading of this order upon an application to be made by the petitioner in this regard - petition allowed.

Summary

Issues:
Challenge to rejection of request for carry forward of Input Tax Credit (ITC) into GST regime due to errors in Form TRAN-1.

Analysis:
The petitioner challenged the order rejecting the request for carry forward of Input Tax Credit (ITC) into the Goods and Service Tax (GST) regime. The petitioner had filed Form TRAN-1 within the stipulated time, but due to inadvertent errors, the correct amount of credit was not updated. Subsequent attempts to rectify the mistake were unsuccessful, leading to the rejection of the request. The Revenue argued that there were ample opportunities for rectification, which were not utilized by the petitioner, justifying the rejection of the request.

The Court acknowledged that the error was inadvertent and constituted a human error, a fact not disputed by the Revenue. Considering the nascent stage of the GST regime, the Court opined that a flexible approach should be adopted in procedural matters. The Court emphasized that the transition of credit only pertains to availing the credit, not its utilization, which falls under the purview of assessment by the Assessing Officer at a later stage.

In light of the circumstances, the Court allowed the writ petition, permitting the petitioner to transition the credit. The Court directed the Deputy Commissioner of GST Policy, the Nodal Officer, to facilitate the necessary modifications and transition within four weeks from the date of the order upon the petitioner's application. No costs were awarded in this matter.