2023 (11) TMI 1154 - HC - GST

Transitional credit - Condonation of delay in obtaining permission from commissioner u/s 140(5) - application filed belatedly after five years from the prescribed date - HELD THAT - Section 140 of the CGST Act enables a registered person to take in its electronic credit ledger, the amount of CENVAT credit/input tax credit carried forward in the return for the period up to 30/6/2017. Sub-section (5) of Section 140 prescribed a condition for taking transitional credit. The condition is that the invoice or any other duty or tax paying document pertaining to the transitional credit has to be recorded in the books of account of the registered person within thirty days from the appointed day. i.e., within 30th July, 2017. Proviso to the said Section permits such entry of invoice in the books of account beyond the thirty days period by a further period of thirty days upon permission to be obtained from the Commissioner concerned. The appellant has entered the invoices within the said extended period of sixty days. But admittedly, it did not obtain any order from the Commissioner extending the limitation period beyond thirty days. From a perusal of Sub-section (5) of Section 140 of the CGST Act, it is evident that beyond the period of thirty days, an assessee can claim the transitional credit of input tax within another thirty days only on production of an order passed by the Commissioner. The Commissioner, therefore, rightly rejected the application. As the Commissioner did not extend the limitation period, the appellant cannot claim the benefit of transitional credit regarding input tax. There are no no illegality or impropriety in the impugned judgment of the learned Single Judge - appeal dismissed.

Summary

Issues involved: Challenge to rejection of transitional credit application under GST statutes.

Summary:
The appellant, a public limited company owned by the Government of Kerala, challenged the rejection of its transitional credit application under the GST statutes. The appellant availed transitional credit of excise duty and Kerala Value Added Tax paid on inputs and service tax paid under RCM for input services under GST. The appellant did not make an appropriate application for condonation of delay before the Commissioner, resulting in the rejection of the application. The learned Single Judge dismissed the writ petition, upholding the rejection of the application. The appellant appealed this decision.

Upon hearing both parties, the Court noted that Section 140 of the CGST Act allows a registered person to carry forward CENVAT credit/input tax credit. Sub-section (5) of Section 140 sets conditions for taking transitional credit, requiring the recording of invoices within thirty days from the appointed day, with a provision for extension by the Commissioner. The appellant failed to obtain an order from the Commissioner extending the limitation period beyond thirty days. The Court emphasized that an assessee can claim transitional credit only upon production of an order passed by the Commissioner extending the limitation period. As the appellant applied for the transitional credit after five years without the Commissioner's extension, the rejection of the application was deemed appropriate.

In conclusion, the Court found no illegality or impropriety in the judgment of the learned Single Judge and dismissed the writ appeal.