2021 (11) TMI 719 - HC - GST

Transfer of credit by permitting the petitioner to resubmit form GST TRAN-2 electronically or manually - stock valuation - Section 140 (3) of the CGST Act read with Rules framed - HELD THAT - In the present petition we are impressed by the petitioner s argument of no fault on the part of the petitioner in properly uploading the petitioner s input tax credit for the month of July, 2017. The Department does not dispute that the petitioner had made monthly declaration in Tran 2 form for all three months of July, August and September, 2017. This was done on a single date i.e. 14.06.2018. 2. For the months of August and September, 2017, the system showed the input tax credit as declared by the petitioner in the respective Tran-2 forms. 3. On the same day on 14.06.2018 itself the petitioner raised an objection to the Department regarding non-reflection of input tax credit for the month of July, 2017. The petitioner cannot be deprived of its rightful tax credit if otherwise available in law. The respondents shall ensure that such declaration of the petitioner is accepted - Petition disposed off.

Summary

Issues:
Transfer of credit in electronic credit ledger under GST regime.

Analysis:
The petitioner, a company supplying smartphones in Rajasthan, sought direction for transferring credit of ?25,39,371 in its electronic credit ledger by resubmitting form GST TRAN-2. The petitioner's stock valuation on 30.06.2017 was ?9.09 Crores, eligible for credit under Section 140(3) of the CGST Act. The petitioner filed necessary forms within statutory limits but faced an issue where credit for July 2017 was not reflected in the ledger despite timely submission. The respondent contended no technical glitch caused the discrepancy, attributing it to the petitioner.

The Court noted the petitioner's timely submissions for all months and the discrepancy in credit reflection for July 2017. It found no fault on the petitioner's part in uploading the credit. The Department acknowledged the petitioner's submissions for August and September 2017, indicating an error specific to July 2017. Consequently, the Court ruled in favor of the petitioner, asserting their right to the tax credit under the law.

The Government counsel emphasized the need for verification before availing the credit, which the Court acknowledged. The judgment directed the respondents to reflect the petitioner's declaration of ?25,39,371 credit for July 2017 in the ledger. However, the petitioner must provide necessary documents to establish the credit's availability for verification by the Assistant Commissioner. The Court clarified the distinction between allowing a declaration and verifying the claim, ensuring compliance with the law.

In conclusion, the petition was disposed of with directions for reflecting the credit in the petitioner's ledger, subject to verification by the Assistant Commissioner. The Court upheld the petitioner's right to the credit, emphasizing compliance with necessary procedures for availing the benefit under the GST regime.