The court affirmed the right to Transitional Input Tax Credit under Section 140 and mandated timely verification of claims without delay caused by technical issues.

JUDGMENT :

MANISH CHOUDHURY, J.

1. Heard Mr. R.S. Mishra, learned counsel for the petitioner and Mr. H. Baruah, learned counsel representing Mr. B. Gogoi, learned Standing Counsel, Finance & Taxation Department for all the respondents.

2. The petitioner has instituted the instant writ petition under Article 226 of the Constitution of India on being aggrieved by alleged inaction on the part of the respondent authorities in verifying the claim of the petitioner regarding Transitional Input Tax Credit, as submitted by the petitioner already in Tran-1, on 28.11.2022.

3. The petitioner has stated that he has been in the business of trading in hardware goods and other ancillary items and he carries on business in the name and style of his sole proprietorship firm, M/s Ahmed Hardware. The petitioner was a registered assessee under the provisions of the Assam Value Added Tax Act. With the repeal of the Assam Value Added Tax Act and introduction of the Goods and Services Tax Regime with the enactments of the Central Goods and Services Tax [CGST] Act, 2017 / Assam Goods and Services Tax [AGST] Act, 2017 w.e.f. 01.07.2017, the petitioner got himself migrated to the GST regime by making an application, as prescribed. On being applied, the petitioner has been issued a Registration Certificate in GST REG - 06 vide Registration no. 18AGMPB0283E1ZO dated 11.08.2020.

4. Section 140 of the CGST/AGST Act has provided for transitional arrangements for input tax credit. As per Section 140 , a registered person is entitled to take the benefit of unutilized input tax lying credited under the previous regime, so as to utilize it in discharge of CGST/AGST liability under the CGST/AGST Act.

5. According to the petitioner, the petitioner was having balance of unutilized input tax credit to the extent of Rs. 73,69,224/- under the Assam Value Added Act, [since repealed], as on 30.06.2017, and the said figure was also reflected in the monthly return submitted by the petitioner for the period of June, 2017.

6. Section 140 has provided for claiming input tax credit which remains unutilized under the previous regime, by filing a claim in the prescribed form, that is, either GST TRAN-1 or GST TRAN-2, as prescribed by Rule 117 of the CGST/AGST Rules. As per Rule 117, every registered person entitled to take credit of input tax under Section 140 , within ninety days of the appointed day [01.07.2017], was required to submit a declaration electronically in Form GST TRAN-1, duly signed, on the common portal, specifying therein, separately, the amount of input tax credit of eligible duties and taxes to which he was entitled under the provisions of Section 140 . As per the provisio to sub-rule [1] of Rule 117, the Commissioner may, on the recommendation of the GST Council, can extend the period of ninety days by a further period not exceeding ninety days.

7. With regard to the transitional provision, there were a number of litigations in various High Courts and finally, the issue came up for examination before the Hon’ble Supreme Court of India in a batch of Special Leave to Appeals including Special Leave to Appeal [C] Nos. 32709-32710/2018 [ Union of India and another vs. Filco Trade Centre Pvt. Ltd. and another ].

8. The Hon’ble Supreme Court after hearing different States and others; and after examining the matter; found just and proper to issue a set of directions with regard to the matter of transitional provision. Accordingly, by its Order date 22.07.2022, the Hon’ble Supreme Court of India had issued the following directions :-

1. Good