2022 (3) TMI 743 - HC - GST

Input Tax Credit - seeking direction to first respondent to enable the petitioner to file respondents to either open the portal so as to enable the petitioner to again file TRAN-1 electronically or to accept manually - HELD THAT - There is no provision under the provisions of the respective GST enactments for lapsing of the input tax credit and the credit availed on capital goods under the respective enactments. These credits are indefeasible. They were meant for being used for discharging the tax liability under the provisions of the erstwhile Central Excise Act, 1944, and under the provisions of Chapter V of the Finance Act, 1994 - there are no merits in the stand of the respondents to deny the credit, which may have been legitimately earned by an Assessee or a Dealer under the provisions of the respective enactments, which stood subsume into the respective GST enactments. The case is remitted back to the jurisdictional authorities to examine the credit in the respective returns of the petitioner which the petitioner claims to have attempted to transition by uploading TRAN-1 after the enactment of GST Act with effect from 01.07.2017 and come to an independent conclusion on the same - petition allowed by way of remand.

Summary

Issues:
1. Petition for Mandamus to enable filing of TRAN-1 electronically or manually.
2. Challenge in transitioning unutilized credit due to portal error.
3. Interpretation of Delhi High Court judgment on credit utilization.
4. Applicability of judgments in similar cases.
5. Denial of credit by respondents.
6. Consideration of past judgments by the High Court.
7. Indefeasibility of credit earned under previous tax enactments.
8. Denial of input tax credit under GST regime.
9. Remittance of case for examination of credit claims.

Issue 1: Petition for Mandamus
The petitioner filed a writ petition seeking Mandamus to direct the first respondent to allow the petitioner to file respondents to either open the portal for electronic filing of TRAN-1 or accept manual filing.

Issue 2: Portal Error in Transitioning Credit
The petitioner faced challenges in transitioning unutilized credit due to a portal error, preventing successful uploading of TRAN-1 within the stipulated time frame.

Issue 3: Interpretation of Delhi High Court Judgment
The petitioner relied on a Delhi High Court judgment regarding credit utilization, emphasizing entitlement to utilize pre-GST credit, which was supported by the dismissal of a Special Leave Petition by the Apex Court.

Issue 4: Applicability of Judgments
Various judgments were cited by the petitioner's counsel to support the claim, including cases from Delhi, Gujarat, Punjab & Haryana, and Bombay High Courts, highlighting the importance of allowing unutilized credits to be carried forward under the GST regime.

Issue 5: Denial of Credit
The respondents opposed the prayer based on a previous Division Bench stay order, challenging the reliance on the Delhi High Court decision. However, the court considered arguments from all parties, including the government advocate, before reaching a decision.

Issue 6: Consideration of Past Judgments
The court referred to previous cases it had adjudicated on similar issues, following the Division Bench's order in a specific case involving GST authorities and a taxpayer, emphasizing the importance of allowing rectification of errors in filing TRAN-1.

Issue 7: Indefeasibility of Credit
Drawing on legal precedents, the court highlighted the indefeasible nature of credits earned under previous tax enactments, emphasizing the right to carry forward such credits for adjusting tax liabilities under the GST regime.

Issue 8: Denial of Input Tax Credit
The court rejected the respondents' stand on denying credit legitimately earned under previous enactments, directing the authorities to credit the unutilized amount into the petitioner's GST Electronic Register within a specified period.

Issue 9: Remittance for Examination
The case was remitted back to the authorities for independent examination of the petitioner's claims regarding unutilized credit, with a directive to credit the amount if found valid, within a specific timeframe.

This detailed analysis of the judgment showcases the court's interpretation of legal principles, consideration of past judgments, and the ultimate decision to allow the writ petition, ensuring the petitioner's entitlement to transition unutilized credits under the GST regime.