Dept. To Decide Whether Corrected Form TRAN-1 Would Be Entertained As Per Transitional Provision Under GST: Bombay High Court Allows Taxpayers To Correct Form TRAN-1

The petitioner/assessees filed Form TRAN-1, but inadvertently did not claim approximately Rs. 13,17,956 on the Form TRAN-1. There was no option available to the petitioner to revise the Form TRAN-1 after December 27, 2017. There was also a further condition of revising the form only once before the due date. The form TRAN-1 was not accepted. According to the petitioner, since the petitioner missed out on the claim of approximately Rs. 13,17,956, the petitioner prayed for permission by making a representation to correct the said mistake, which was not allowed.

The petitioner has challenged Rules 117 and 120A of the Central Goods and Services Tax Rules, 2017. The petitioners have sought the direction to the department to allow the revision of the Form TRAN-1 and Form TRAN-2 and allow the assessees to take credit under section 140(3) of the Central Goods and Services Tax Act, 2017 on the invoices missed out during the initial filing.

Provisions under Rule 117 of the Central Goods and Services Tax (CGST) Rules, 2017 relating to "Tax or Duty Credit Carried Forward under any Existing Law or on Goods Held in Stock on the Appointed Day"

Rule 120A of the Central Goods and Services Tax (CGST) Rules, 2017 relates to the revision of the declaration on Form GST TRAN-1.

As per section 140 (3) of the CGST Act, 2017, the only credit of eligible duty that can be claimed is CST and Service Tax, which are not covered under the category of eligible duty. Therefore, a person cannot claim a credit for both CST and service tax.

The petitioner contended that the time prescribed under Rule 117 (1) is directory. Though the petitioner has sought credit for the tax credit recoverable under the old regime by following the procedure under Rule 117 read with 140, the department has not entertained the application.

The court noted that the petitioner had already filed form TRAN-1 for transitional credit benefits under section 140 (3) of the Central Goods and Services Tax Act, 2017 and section 140 (3) of the Maharashtra Goods and Services Tax Act, 2017, respectively. However, since the petitioner missed out on a certain amount by mistake, the petitioner applied for a correction on Form TRAN-1 and thereafter filed Form TRAN-2.

The court has held that jurisdictional assessing authority shall also consider all the issues that would be raised by the petitioner including the issue on merits simultaneously.

"If the case of the petitioner is accepted by the authorities, the relief sought by the petitioner shall be granted within four weeks from the date of allowing such application. If the order is adverse to the petitioner, the petitioner would be at liberty to file appropriate proceedings," the court said.

Case Title: Ambica Fertilisers Versus The Union of India

Case Number: Writ petition No. 1690 OF 2019

Citation: 2022 LiveLaw (Bom) 148

Dated: 13/04/2022

Counsel For Petitioner: Advocate Ishaan Patkar h/f Advocate R.N. Jain

Counsel For Respondent: Assistant Solicitor General A.G. Talhar