5 May 2022 2:43 PM GMT
The Kerala High Court bench of Justice Bechu Kurian Thomas has directed the GST department to facilitate the revising of Form GST TRAN-1 and filing of Form GST TRAN-2 by making necessary arrangements on the web portal. The petitioner/assessee was a registered dealer under the Kerala Value Added Tax Act, 2003 as well as the Central Sales Tax Act, 1956. The assessee is in the business...
The Kerala High Court bench of Justice Bechu Kurian Thomas has directed the GST department to facilitate the revising of Form GST TRAN-1 and filing of Form GST TRAN-2 by making necessary arrangements on the web portal.
The petitioner/assessee was a registered dealer under the Kerala Value Added Tax Act, 2003 as well as the Central Sales Tax Act, 1956. The assessee is in the business of trading in iron and steel products and other accessories and allied items.
The petitioner is alleged to have Rs. 19,28,654 as an unutilized input tax credit under the earlier tax regime. After the introduction of GST, the petitioner submitted a declaration on form GST TRAN-1 declaring the details of the credit to be claimed while filing form GST TRAN-2. However, when attempting to complete form TRAN-2, the petitioner received an error message indicating that it had not declared anything in Part 7B of Table 7(a) of Form GST TRAN-1 and thus could not fill out details in Table 4 of TRAN-2.
Pursuant to the receipt of the error message and on verification, the petitioner realised that, while filling up form GST TRAN-1, an inadvertent mistake was made by filling in Table 7 (d) of Part 7B of form GST TRAN-1 instead of Table 7 (a) of Part 7B. The mistake resulted in the petitioner being unable to fill out form GST TRAN-2 and transition the input tax credit to the electronic ledger.
The petitioner contended that the mix up of fields in the GST form occurred inadvertently, due to a lack of awareness under nascent legislation, and it ought not to be treated as fatal to the entitlement of the petitioner to obtain credit. Immediately thereafter, the petitioner represented the GST Council, seeking redress of its grievance and requesting permission to revise TRAN-1 in order to file TRAN-2. The petitioner received a reply from the department pointing out that a one-time facility to complete the TRAN-1 procedure was extended to those assessees who could not file TRAN-1 due to glitches as prescribed in Circular dated 03/04/2018. It was also mentioned that the period for revising the declaration on form GST TRAN-1 was extended till December 27, 2017 and that no orders for extension of time have been permitted.
GST TRAN-1 is the transition form to be filed for taxpayers who were registered under the pre-GST regime to avail of the accumulated input tax remaining in their account on the day preceding the appointed day. The form is to be filed by every person having an input tax credit on the closing stock and who has migrated to GST. The balance of closing stock held by the taxpayer as on the appointed day ought to be disclosed in TRAN-1 to claim the input tax credit on the old stock in the GST regime.
The court noted that the mistake was a bona fide error and arose on account of an error in perception and comprehension of minute details of the new formats to be submitted. Denying the relief of correcting the error can only be termed as arbitrary and unreasonable.
The court found that the mistake in filling up the TRAN-1 form was genuine, and, in the circumstances, the error should not prevent the petitioner from claiming or being entitled to claim what is otherwise legally due to him.
The court directed the department to facilitate the revision of form GST TRAN-1 submitted by the petitioner and to file form GST TRAN-2 by making necessary arrangements on the web portal. If in case it is not possible, to permit the manual filing of returns by the petitioner, as expeditiously as possible, at any rate, within a period of two months.
Case Title: M/S G&C infra Innovations v. Union of india
Citation: 2022 LiveLaw (Ker) 209
Counsel For Appellant: Advocate A. Kumar
Counsel For Respondent: Advocate Jasmin M.M.
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