Supreme Court dismisses Special Leave Petition allowing to file or revise TRAN-1
- Mar 19, 2020 | Viren Shah
Transitional credit is one of the most litigated issues under the GST regime. Various writ petitions have been filed in the High Court(s), with most of them having been ruled in favor of taxpayers.
The Punjab & Haryana (P&H) High Court in the case of Adfert Technologies Pvt. Ltd.i, along with other taxpayers, has held that the unutilized credit of duty/tax paid under the erstwhile indirect tax regime is a vested right and cannot be taken away on account of procedural or technical grounds. In this order, the High Court relied on the decision of Gujarat High Court in the case of Siddharth Enterprisesii wherein it was held that credit was a vested right and property and denial of the same would be violative of Article 300A of the Constitution of India.
The P&H High Court observed that in the absence of any period under the GST law (Section 140 of the CGST Act), it indicates that there is no intention of the legislature to deny carry forward of such unutilized credit on the ground of time limit.
It further pointed out that with GST being a new law and there being several steps and columns in the filing of Form GST TRAN-1, there may be bona fide mistakes by the taxpayers. It also reiterated that the unutilized credit had been recognized as vested right and property, as per Article 300A of the Constitution of India. Thus, it held that unutilized credit could not be taken away on account of procedural or technical grounds.
It, thus, directed the Revenue Authorities to permit the taxpayers to file or revise Form TRAN-1, either electronically or manually, by November 30, 2019.
The Revenue Authorities challenged the P&H High Court order by filing a Special Leave Petition (‘SLP’) before the Supreme Court.
The Supreme Court dismissed the SLPiii by stating that it is not inclined to exercise its jurisdiction against t/content/avalara/he order, as mentioned earlier of the High Court.
This is a welcome decision as it allows transitioning of erstwhile unutilized credits into the GST regime even in the case where the due date could not file form GST TRAN-1.
Further, it is to be noted that the Central Board of Indirect Taxes and Customsiv has extended the time limit for submitting the declaration in Form GST TRAN-1 till March 31, 2020.
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[i] CWP No.30949/2018 dated 4 November2019
[iii] SLP No. 4408/2020 dated 28 February 2020
[iv]Order No. 01/2020-GST dated 7 February 2020