2021 (7) TMI 334 - HC - GST

Correction of amount shown in GST TRAN-1 - Transitional credit - Period of limitation - Constitutional validity of Section 140 of the CGST Act - carry forward of Input Tax Credit - revenue neutrality - HELD THAT - The writ petition is liable to be allowed - Admittedly, there have been multiple difficulties, both technical and otherwise, that have been faced by assesses and the Department post introduction of GST with effect from 01.07.2017. In such a situation a bonafide human error as in the present case should be permitted to be rectified. There is no dispute expressed by the respondents in its counters on the position that the error committed is inadvertent - the exercise of transitioning ITC is revenue neutral at this juncture, since what is enabled by permitting such transition is only the carryforward of the ITC and the utilization of the same will be subject to proper verification by the Assessing Officer at the time of assessment. It does not stand to reason that the date of filing of Form-1 and date for revision of the same be one and the same and in order to be viable, there must be a sufficient gap of time in between the two - Section 120A grants only one opportunity to the petitioner to rectify the Form TRAN-1 and there is, in my view, no basis for such restriction. In this case, the last dates for filing of TRAN-1, and seeking revision of the same are both 27.12.2017. The petitioner has uploaded the TRAN 1 on 27.12.2017 and there was thus, no time available for the petitioner to have sought revision of the error that was occasioned in the Form. The respondent will enable the filing of revised Form TRAN-1 by opening of the portal and this exercise will be completed within a period of eight weeks from today - Petition closed.

Summary

Issues:
1. Revision of GST TRAN-1 Form for availing CENVAT credit under GST Act.
2. Interpretation of Section 120A of the Central Goods and Services Tax Rule, 2017.
3. Permissibility of rectifying inadvertent errors in GST filings.

Analysis:
1. The petitioner, a public sector undertaking, filed Form GST TRAN-1 within the stipulated time to avail accumulated CENVAT credit under the GST Act. However, an error in reporting the admissible credit amount led to subsequent attempts to rectify the mistake through revised filings. The impugned communication from the revenue authority denied the petitioner's claim for utilizing the credit amount reflected in the GSTR-3B return for June 2018, citing the need for correction until a decision by the CBEC.

2. The petitioner argued that the error was inadvertent and sought permission to rectify it based on legal precedents allowing amendments for genuine mistakes. The revenue counsel, on the other hand, invoked Section 120A of the GST Rules, limiting the amendment of TRAN-1 declarations to once and emphasizing the absence of provisions for repeated revisions beyond the specified deadline of 27.12.2017.

3. In the judgment, the Court acknowledged the challenges faced by taxpayers and tax authorities post-GST implementation, recognizing the petitioner's bona fide error and the revenue-neutral nature of transitioning ITC. The Court scrutinized Section 120A, emphasizing the need for a reasonable gap between filing and revision dates, which was lacking in this case due to the simultaneous deadlines for both actions. Consequently, the Court set aside the impugned order, directing the respondent to facilitate the filing of a revised Form TRAN-1 within eight weeks.

This comprehensive analysis of the judgment highlights the key issues, legal arguments, and the Court's reasoning, culminating in the decision to allow the petitioner to rectify the inadvertent error in the GST filings.