Assessee Can't forgo the deemed excise credit: Bombay High Court Orders Tran 1 Or Tran 2 to be filed on GST portal

The Bombay High Court has held that it will be wholly unfair if the assessee ends up having to forgo the deemed excise credit, particularly when under Section 29(3) his liability will continue even after cancellation of registration.

The division bench of Justice K.R. Sriram and Justice A.S. Doctor has observed that the application, subject to paying all necessary fees and filing requisite documents, shall be considered and registration shall be restored by not later than November 22, 2022. After the restoration of registration, the nodal officer shall forward the restoration order to GSTN. The GSTN shall, on receipt of the order, ensure that the portal is open in such a way that the petitioner will be able to apply for migration under TRAN-1 and TRAN-2 before November 30, 2022.

The court ordered that if online restoration is not possible, the order will be passed manually. The Nodal Officer shall forward all those documents to GSTN, and GSTN shall consider the order as if it were filed online or properly filed and give effect to that in its portal.

The petitioner was registered under the GST. The petitioner closed his business and applied for cancellation of registration, which was granted by an order dated July 18, 2019.

The petitioner was entitled to claim transition credit in Form GST TRAN-1 under sub-section 3 of Section 140 of the Central Goods and Services Tax Act, 2017. Petitioner applied for transition, but due to various reasons, his transition could not take place.

Section 30 of the CGST Act provides for revocation or cancellation of registration, but that only envisages situations where a registration is cancelled by the proper officer on his own motion. It does not take into account a situation such as the current one, in which a registered person has applied for cancellation, revocation of cancellation, or restoration of registration.

The court held that if it is not resolved online by November 28, 2022, the petitioner is permitted to file manually for the migration of TRAN-1 and TRAN-2, and the Nodal Officer shall consider it.

Case Title: Euro Pratik Sales Corporation Vs. Union of India and Ors

Citation: Writ Petition No. 3380 Of 2022

Date: 17.11.2022

Counsel For Petitioner: Advocates Shreyash J. Shah, Udayan Mukherjee, Kavita Singh

Counsel For Respondent: Advocates V.A. Sonpal, Jyoti Chavan, Himanshu B. Takke

Citation: 2022 LiveLaw (Bom) 450