2022 (9) TMI 1042 - HC - GST

Transfer of Input Tax Credit - alternative prayer is to direct the respondents to permit the petitioners to again file manually the TRAN-1 for declaring and transferring Cenvate credit - Central Goods and Services Tax Act, 2017 (CGST Act ) read with Rule 117 of the Central Goods and Services Tax Rules, 2017 (CGST Rules) - circular No. 39/13/2018 GST dated 3.4.2018 as well as order No. 1/2020 GST dated 7.2.2020 - HELD THAT - The issue has been answered by the Apex Court in case of UNION OF INDIA ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. ANR. 2022 (7) TMI 1232 - SC ORDER where it was held that Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022. It goes without saying that the aforesaid decision of the Supreme Court shall govern the right of the parties. Petition disposed off.

Summary

Issues:
1. Petition to direct respondents to consider transfer of Cenvate credit as Input Tax Credit.
2. Alternative prayer for manual filing of TRAN-1 for transferring Cenvate credit.
3. Further alternative prayer to facilitate electronic filing of FORM GST TRAN-1.

Analysis:

Issue 1:
The petitioners, a partnership firm engaged in manufacturing brass items, sought direction to consider transferring Cenvate credit totaling Rs. 51,95,606 as Input Tax Credit (ITC) under the Central Goods and Services Tax Act, 2017. They filed multiple applications and letters to the competent authority, requesting such transfer. However, due to a technical error in the online portal, their initial filing on 26.8.2017 was unsuccessful, leading to the loss of transitional input tax credit. The petitioners subsequently made further requests for carry forward of Cenvat credit, culminating in the present petition under Article 226 of the Constitution.

Issue 2:
In the alternative prayer, the petitioners sought permission to manually file TRAN-1 for declaring and transferring the Cenvate credit amount to their electronic credit ledger. This request was made in light of Circular No. 39/13/2018 - GST dated 3.4.2018 and Order No. 1/2020 GST dated 7.2.2020, aiming to regularize the Cenvate Credit taken as Input Tax Credit based on Transitional Credit-Guidance Note dated 14.3.2018 issued by the Ministry of Finance.

Issue 3:
The further alternative prayer aimed to direct the respondents to facilitate electronic filing of FORM GST TRAN-1 in accordance with circulars and orders mentioned earlier. The petitioners sought to regularize the Cenvate Credit through electronic means and requested compliance with the guidance note issued by the Ministry of Finance. The Supreme Court's directions in a related case emphasized the opening of a common portal for filing relevant forms for availing Transitional Credit, ensuring no technical glitches, and providing a timeframe for verification and reflection of allowed Transitional credit in the Electronic Credit Ledger.

In conclusion, the High Court disposed of the petition in line with the Supreme Court's directives, emphasizing the governance of parties' rights by the said decision. The judgment provided clarity on the process for transferring and regularizing Cenvate credit as Input Tax Credit, ensuring compliance with relevant circulars and orders under the GST regime.