2021 (3) TMI 1085 - HC - GST

Seeking to allow rectification of Form GST TRAN-2 filed for the month of July 2017 - filing of returns in Form GST TRAN-2 - transitional credit for supplies made in the months of August 2017 to December 2017 - Section 140(3) of the Central Goods and Services Tax Act, 2017 - HELD THAT - The controversy in the case on hand 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 , wherein 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 judgment of this Court in the case of Jakap Metind Pvt. Ltd., is in the context of an inadvertent error in the Form GST TRAN-1. However, the ratio should apply even in the case on hand. The writ-applicants cannot be made to lose the benefit of deemed transitional tax credit from August 2017 onwards only on account of an inadvertent and bonafide typographical error made in the Form GST TRAN-2 for the month of July 2017 - respondents are directed to either open an online portal so as to enable the writ-applicants to again file a rectified Form GST TRAN-2 electronically - Application allowed.

Summary

Issues:
- Claim for transitional tax credit under the GST Act based on Form GST TRAN-2 filing error for July 2017
- Rectification of Form GST TRAN-2 for the months of August to December 2017
- Legal remedy sought through a writ-application under Article 226 of the Constitution of India

Analysis:
1. Claim for Transitional Tax Credit: The writ-applicants, engaged in the distribution of Maruti cars and spare parts, sought transitional tax credit under Section 140(3) of the GST Act for goods in stock as of 30.6.2017. The applicants correctly filed Form GST TRAN-1 within the stipulated time limit but encountered a typographical error in Form GST TRAN-2 for July 2017, leading to an incorrect closing stock entry. Despite several requests for rectification due to the inadvertent error, the respondents did not respond positively, prompting the writ-application for relief.

2. Judicial Precedent: The judgment in the case of Jakap Metind Pvt. Ltd. vs. Union of India set a precedent where the court allowed rectification for bona fide errors in transitional credit claims. The court emphasized the obligation of authorities to provide facilities for rectification of such errors and highlighted the violation of Article 265 of the Constitution if entitled credit is not granted. The court directed the authorities to enable rectification or accept manually filed forms with corrections within a specified timeframe.

3. Court's Decision: The High Court, following the precedent, ruled in favor of the writ-applicants, acknowledging the inadvertent typographical error in Form GST TRAN-2 for July 2017. The court directed the respondents to facilitate the filing of rectified Form GST TRAN-2 electronically for July 2017 and subsequent months from August to December 2017. The court instructed not to raise objections regarding the time limit for filing due to the portal's restriction caused by the error in the July 2017 form. The writ-application was allowed, providing relief to the applicants for rectifying the transitional tax credit claim under the GST Act.

In conclusion, the judgment granted relief to the writ-applicants by allowing rectification of Form GST TRAN-2 for July 2017 and subsequent months to claim transitional tax credit under the GST Act. The court's decision aligned with established legal principles and judicial precedents, emphasizing the importance of rectifying bona fide errors to ensure the rightful entitlements of taxpayers.