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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M.S.SONAK, JITENDRA JAIN
Johnson Matthey Chemicals India Pvt. Ltd., Through its Authorized Representative Mr. Ketan Gala – Appellant
Versus
Union of India, Through the Ministry of Finance Department of Revenue – Respondent
| Table of Content |
|---|
| 1. challenge to rejection of transitional credit. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8) |
| 2. petitioner's arguments for validity of claim. (Para 9 , 10) |
| 3. court's reasoning on electronic filing and deadlines. (Para 12 , 13 , 14 , 15 , 16) |
| 4. justification for enabling transitional credit claim. (Para 17 , 18 , 19) |
| 5. quashing of impugned order and directive for acceptance of credit. (Para 20 , 21 , 22) |
JUDGMENT :
Jitendra Jain, J.
1. Rule. Rule made returnable forthwith. By consent, heard finally at the admission stage.
2. This petition under Article 226 of the Constitution of India challenges an order passed by respondent no.3 whereby the petitioner’s revised TRAN-1 Form dated 28 November 2022 filed under Section 140 of the Central Goods and Service Tax Act, 2017 (‘CGST Act’) has been rejected on the ground that the petitioner has not revised its excise return for the period prior to 1 July 2017 electronically and consequently, the credit of duties cannot be transitioned.
Brief Facts :-
3. The petitioner is engaged in the business of manufacture and sale of industrial catalysts. On 26 August 2017, the petitioner filed its GST Form TRAN-1 for transition of credit of Rs.4,31,30,239/
Transitional credit rights under GST cannot be denied due to procedural shortcomings when there is no revenue loss, emphasizing the significance of legitimate claims in tax law.
The court established that procedural timelines should not infringe upon vested rights to claim tax credits, especially in light of technical challenges faced by taxpayers.
Authorities must act reasonably and fairly, ensuring assessees are not deprived of legal benefits due to technical errors in filing forms.
The court allowed the petitioner to correct their tax credit submissions based on a bona fide error, emphasizing the need for leniency to avoid unjust taxation.
The period prescribed under Rule 117 of the Rules for filing the TRAN-1 Form was merely directory and not mandatory.
The court's decision emphasized the importance of accommodating delays caused by the Covid-19 pandemic in filing revised forms and verifying transitional credit claims.
The entitlement to Input Tax Credit cannot be denied on account of procedural problems and technical glitches.
Vested rights for transitioning unutilized CENVAT credits under the GST regime cannot be denied due to technical difficulties; taxpayers are entitled to rectify their filings.
Inadvertent human errors in claiming input tax credit under the GST regime should not preclude a petitioner from having its claim examined by the authorities in accordance with law.
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