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TMI Blog2023 (7) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not be shifted to the current management. Likewise, the credit available to the earlier management will also not be available to the current management as the current management was not a taxpayer during the period of procurement of inputs or capital goods as availed in the TRAN-1 filed on 30.11.2022. Nevertheless, at the last portion of the order it misdirected itself in holding that the whole amount taken as transitional credit is liable to be recovered along with applicable interest and penalties. This part of the order is certainly against the ratio of the judgments passed by the Hon ble Apex Court in the case of Ghanshyam Mishra and Sons Private Ltd. as such, the same requires interference. The petitioner can also not take credit of the ITC of the earlier period i.e., prior to 17.04.2018 (Annexure-1); the date on which the National Company Law Tribunal has approved the resolution plan of the Petitioner. Hence, the petitioner is not entitled to claim of Rs. 92,13,412/- which has been claimed by the Petitioner as Transitional credit by filing new TRAN-1 in light of the Order passed by Hon ble Supreme Court in the case of Union of India Vrs. Filco Trade Centre Put. Ltd. [ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 including admissibility as well as validity of TRAN-1 and since the Apex Court appears to be of the view that the current management was not a taxpayer for the period prior to 04.06.2018, i.e. the date of change of management and therefore the liability of the earlier management may not be shifted to the current management and therefore in a reciprocal approach, the credit available to the earlier management will not be available to the current Management as the current management was not a taxpayer during the period of procurement of inputs or capital goods as availed in the TRAN-1 filed on 30.11.2022, therefore, the whole amount taken as transitional credit is liable to be recovered along with applicable interest and penalties, which allegations of the Respondent No. 2 based on his imagination, as there is no finding of Hon'ble Apex Court in this regard. (c) For a direction upon the Respondents to immediately and forthwith restore the Form TRAN-1 filed by the Petitioner, which it is duly entitled to under the facts and circumstances of this case. (d) For restraining the Respondents from taking any coercive action for realizing any amount from the petitioner pursuant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy of IBC proceeding, the earlier Management of the Petitioner Company i.e., before taking over the management by M/s Vendanta, had filed Original TRAN-1 on 27.09.2017 and while filing the said Form TRAN-1, as the GST Portal did not allow the Petitioner to disclose and transition of CENVAT Credit on the Capital Goods received during the month of July, 2017 and August, 2017 amounting to Rs. 92,13,412/-. Petitioner vide Letter dated 22.12.2018 requested the Respondent No. 1 to allow it to file revised Form GST TRAN- 1 by giving instruction to the technical team to enable the option to file revised TRAN-1 in the online GSTN portal (Annexure-2). CREA Audit Team of the Respondents raised objections in Audit Report by the Respondent Department by issuing Letters dated 23.08.2021 and 10.09.2021. Petitioner vide its Letter dated 26.10.2021 has submitted the detailed reply in response to the aforesaid Audit Report. After submissions of the aforesaid reply, no further letters/notices were issued to the Petitioner in this regard by the Respondent Department. Moreover, as the TRAN-1 issue was quite a bit of extenuating issues pertaining to system glitches, technical errors, inability to re-ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit ledger and attended the personal hearing on 21.02.2023 before the Respondent No. 2, (Annexure-8). Respondent No. 2 vide its Order-in-Original No. 26/GST/ADC/Ran/2023 dated 24.02.2023, has confirmed the demand of Rs. 6,02,34,616/- u/s 74(9) of the Central Goods and Service Tax Act, 2017 on the ground of irregular availment of transitional credit during the period 2017-18, which includes the transitional credit of Rs. 5,10,21,204/- claimed by the Petitioner prior to 17.04.2018 and balance amount of Rs. 92,13,412/- has been claimed by the Petitioner as Transitional credit by filing new TRAN-1 in light of the Order passed by Hon'ble Supreme Court in the case of Union of India Vrs. Filco Trade Centre Put. Ltd. being SLP (C) No. 32709-32710/2018, without considering the show cause reply dated 20.02.2023 (Annexure-8) of the Petitioner and even without considering the Judgment of the Hon'ble Apex Court passed in the case of Ghanshyam Mishra and Sons Private Ltd. Vrs. Edelweiss Asset Reconstruction Company Ltd. reported in (2021) 9 SCC 657, to the effect that no recovery and or proceeding can be continued against the Petitioner, for any alleged dues prior to 17.04.2018 (Annexure1) i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner for the period prior to 17.04.2018 and balance amount of Rs.92,13,412/- has been claimed by the Petitioner as Transitional credit by filing new TRAN-1 in light of the Order passed by Hon'ble Supreme Court in the case of Union of India Vrs. Filco Trade Centre Pvt. Ltd. being SLP (C) No. 32709-32710/2018. He further submits that the TRAN-1 issue was quite a bit of extenuating issues pertaining to system glitches, technical errors, inability to re-adjust the credit once the onetime revision is done, inability to take the credit that got accumulated beyond the implementation date, and therefore the Hon'ble Apex Court in the case of Union of India Vrs. Filco Trade Centre Put. Ltd. (supra) has put the issue to rest by ordering portal to be re-opened for filing TRAN-1. He contended that the aforesaid judgment of the Hon'ble Supreme Court passed in the case of Ghanshyam Mishra and Sons Private Ltd. (Supra), which is in favour of the Petitioner, cannot be twisted by the Respondent by trying to take umbrage on the said Judgment of the Hon'ble Apex Court from the perspective of recovery of liabilities post IBC proceedings to contend that "liabilities go parallel with the assets". From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no recovery and or proceeding can be continued against the Petitioner, for any dues prior to 17.04.2018 (Annexure-1) i.e., the date on which the National Company Law Tribunal has approved the resolution plan of the Petitioner. From perusal of the aforesaid Judgment, it is crystal clear that it is only the past obligation of the past period gets extinguished once the new management has taken over the Company as part of the Resolution Plan. 6. At the outset it is clarified that the contention of the Petitioner-Company that there is nothing in the said judgment which says that the past credit due to the company gets expunged; is misconceived. As a matter of fact, the liability of the earlier management may not be shifted to the current management but at the same time, the credit available to the earlier management will also not be available to the current management as the current management was not a taxpayer during the period of procurement of inputs or capital goods as availed in the TRAN-1 filed on 30.11.2022 Accordingly, we hold that on the one hand; the Respondent No. 2 has illegally and arbitrarily confirmed the demand of Rs.6,02,34,616/- u/s 74(9) of the Central Goods and Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken as transitional credit is liable to be recovered along with applicable interest and penalties. 5. The said noticee has quoted Notification No. 11/2020 - Central Tax dated 21.03.2020 and Circular No. 134/04/2020 - GST dated 23.3.2020 and 138/08/2020GST dated 06.05.2020 in support of their defence. But I find from the case records that these Notification and Circulars are not applicable to the case of the said noticee as their defence reply is totally silent on the procedures followed by them." 8. After going through the relevant portion of the impugned order it can be safely held that the adjudicating authority was correct in holding that as the Apex Court was of the view that the current management was not a taxpayer for the period prior to 04.06.2018. i.e., the date of change of management and therefore the liability of the earlier management should not be shifted to the current management. Likewise, the credit available to the earlier management will also not be available to the current management as the current management was not a taxpayer during the period of procurement of inputs or capital goods as availed in the TRAN-1 filed on 30.11.2022. Nevertheless, at the last ..... X X X X Extracts X X X X X X X X Extracts X X X X
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