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.

JUDGMENT :

ZIYAD RAHMAN A.A., J.

1. The petitioner is a private limited company and is a registered taxpayer under the provisions of the CGST/SGST Act. The dispute in this case pertains to the denial of transitional credit under Section 140 of the CGST Act , in relation to the Input Tax Credit available to the petitioner under the Kerala Value Added Tax Act and the Central Sales Tax Act. As per Section 140 of the CGST Act , the petitioner had earlier submitted applications in TRAN-1 and TRAN-2, seeking the carry forward of the said claim to the CGST regime on 27.12.2017. In the TRAN-1 filed in the year 2017, the petitioner claimed an amount of Rs.88,04,678.87/- as the amount available to its credit which is to be carried forward to the CGST regime.

2. Later, owing to various discrepancies in submitting the TRAN-1 and TRAN-2 applications by the taxpayers across the country, the Honourable Supreme Court, passed a judgment in SLP(C) No.32709-32710/2018, permitting the taxpayers to revise the TRAN-1/TRAN-2 on or before 30.11.2022. According to the petitioner, as they omitted certain amounts in TRAN-1 earlier submitted, they submitted a revised TRAN-1 and TRAN- 2, on 29.10.2022. In the TRAN-1 application so submitted, the credit shown was Rs.6,84,886/- and in TRAN-2 the figure shown was nil.

3. According to the petitioner, while submitting the revised TRAN-1 and TRAN-2 applications in the year 2022, they were under the impression that, a revised TRAN-1/TRAN-2 were required to be submitted for any additional claim to be put forward, other than the claim already made as per the earlier applications. It was in those circumstances, in TRAN-1, the additional amount was shown as Rs.6,84,886/- without showing the earlier figure of Rs.88,04,680/- and in TRAN-2, the amount was shown as nil, whereas the amount shown as per the earlier TRAN-2 was Rs.2,01,681/-.

4. However, after processing TRAN-1 and TRAN-2, the officer concerned rejected the claim as per Ext.P2 order, on the reason that the petitioner failed to produce necessary invoices to substantiate the said claim. In the said order, there was a reference to the amounts mentioned in the earlier TRAN-1 and TRAN-2 applications, and it was also informed that an assessment for the amounts referred to in the said applications would be made.

5. Even though Ext.P2 was challenged by the petitioner before this Court by filing W.P.(C) No.34974/2023, the said challenge was not entertained and the writ petition was dismissed as per Ext.P3 judgment. Subsequently, an assessment was carried out and as part of the same, Ext.P4 order was passed under Section 73(9) of the CGST Act in respect of the amounts covered by TRAN-1 and TRAN-2 submitted in 2017. In response to the show cause notice issued prior to Ext.P4, the petitioner submitted a reply highlighting the circumstances under which it happened to file, the modified TRAN-1 and TRAN-2, without referring to the figures included in the TRAN-1 and TRAN-2 submitted in the year 2017. However, as per Ext.P4, the contentions of the petitioner were rejected, and the assessment was made by denying the credit of Rs.88,04,680/- availed by the petitioner in TRAN-1 and Rs.2,01681/- availed by the petitioner in TRAN-2 submitted in the year 2017. This writ petition is submitted by the petitioner challenging Ext.P4.

6. A detailed counter affidavit has been submitted by the respondents disputing the contentions raised by the petitioner and also opposing the reliefs sought. It was pointed out that, in the light of the TRAN-1 and TRAN-2 submitted in the year 2022, the claim of amounts covered by the earlie