2022 (1) TMI 607 - HC - GST

Transition of Input tax credit - mistake in filing Tran 1 - It is the case of the petitioner that instead of making a proper entry against 7(a) of Tran 1, the petitioner has made an entry in 7(d) - HELD THAT - In this case, the petitioner had filed the Tran 1 in time with certain mistakes and the petitioner had also made an another attempt to rectify the mistake on 27.12.2017. Thereafter, the petitioner had also filed a writ petition before this Court but withdraw the same under bonafide relief with the issue would be resolved before the IT Grievance Redressal Committee (IT-GRC) constituted by the GST Counsil and pursuant to an interim order of this Court dated 26.03.2019. The petitioner having made a mistake in filing the GST returns on 10.11.2017 was entitled to revise such declaration and submit a revised declaration in GST electronically on the common portal within a time specified in the GST Rules, 2017 namely Rules 117, 118, 119 and 120 - The technical problem arose at the time of initial implementations of GST which resulted in difficulties both for the Assessee and the for the Department. Ultimately, the amounts which were available as input tax credit under the erstwhile Central Excise Rules, 2002 read with Cenvat Credit Rules were to be transited as their equivalent to cash to the extent and that they are available for being used for discharging the tax liability. The procedure prescribed under the provisions of Central Goods and Service Tax Act, 2017 and the respective State Enactments and the Rules made there under should not come in the legitimate way of transitional credits as such credits were already available for being utilized for discharging the tax liability. These amounts cannot lapse. The difficulty in amending the Tran-1 is on account of the Architecture of the Web Portal which did not permitted the petitioner to make such amendments. The petitioner cannot be found fault of Architecture of the Web Portal did not have such facility. Input Tax Credit once availed are indefeasible and cannot lapse. This writ petition is disposed off by directing the second respondent to take an independent decision by deputing a suitable officer from the Department to verify the petitioner indeed had un-utitlized accumulated credit for a sum of ₹ 33,28,709.60 - petition disposed off.

Summary

Issues:
1. Petitioner's attempt to transition input tax credit
2. Representation for correction in Tran-1 form
3. Delay in filing amendment in Tran-1 form
4. Reference to IT Grievance Redressal Committee
5. Fresh application for correction in GST TRANS FORM
6. Judicial precedents cited by petitioner
7. Respondent's argument against the petition
8. Court's analysis and decision

Issue 1: Petitioner's attempt to transition input tax credit
The petitioner, a first stage dealer under Central Excise Rules 2002, sought to transition input tax credit by filing Tran 1 on 10.11.2017. However, an error was made in the filing process, leading to the need for correction.

Issue 2: Representation for correction in Tran-1 form
The petitioner sent a representation to the Principal Chief Commissioner, GST and Central Excise, seeking permission to correct the mistake in Tran-1 form filed electronically after the prescribed deadline of 31.12.2017.

Issue 3: Delay in filing amendment in Tran-1 form
Despite the delay in seeking amendment and the lack of a favorable response from the second respondent, the petitioner filed a writ petition for mandamus to process the GST Tran Credit amounting to ?33,28,709.

Issue 4: Reference to IT Grievance Redressal Committee
The matter was referred to the IT Grievance Redressal Committee, which decided against recommending the case favorably, leading the petitioner to withdraw the writ petition.

Issue 5: Fresh application for correction in GST TRANS FORM
Subsequently, the petitioner filed a fresh application for further correction in the GST TRANS FORM, citing another mistake.

Issue 6: Judicial precedents cited by petitioner
The petitioner relied on judgments from the Delhi High Court and the Madurai Bench in similar cases to support their argument for rectification of errors in the GST filing process.

Issue 7: Respondent's argument against the petition
The Senior Standing Counsel for the respondent contended that the petition lacked merit, emphasizing the prescribed time limits under the CGST Act, 2017, and the inability to rectify errors beyond the specified timeline.

Issue 8: Court's analysis and decision
The Court acknowledged the challenges faced during the initial implementation of GST, recognizing the importance of transitional credits accumulated before the GST Act's introduction. The Court directed the second respondent to verify the unutilized accumulated credit and resolve the technical issues within six weeks.

This detailed analysis covers the petitioner's attempts to rectify the input tax credit transition, the legal arguments presented by both parties, the reference to judicial precedents, and the final decision of the Court to address the technical issues and verify the available credit amount.