Supreme Court allows taxpayers to claim transitional GST credit, directs GST Network to open portal for 2 months.

Case Name:

Union Of India & Anr. Vs. Filco Trade Centre Pvt. Ltd. & Anr. (GST SC Case)

Key Takeaways:

- The Supreme Court recognized the difficulties faced by taxpayers in claiming transitional credit for taxes paid under the previous regime.

- The court directed the GSTN to open the common portal for filing TRAN-1 and TRAN-2 forms to claim this credit for two months (September 1, 2022, to October 31, 2022).

- Taxpayers can file or revise the relevant forms, regardless of whether they had filed writ petitions or their cases were decided by the IT Grievance Redressal Committee.

- The court's order aims to bring relief to taxpayers who could not claim the transitional credit due to technical glitches or other issues.

- The GST Council can issue guidelines to field formations for scrutinizing the claims.

Issue:

Whether the court can direct the GSTN and the GST Council to allow taxpayers to claim transitional credit for input tax under the GST regime by filing or revising the relevant forms, even if they had previously filed writ petitions or their cases were decided by the IT Grievance Redressal Committee.

Facts:

- The case involved a batch of petitions filed by taxpayers seeking relief to claim transitional credit for input tax paid under the previous tax regime.

- Many taxpayers could not claim this credit due to technical glitches or other issues while filing the relevant forms (TRAN-1 and TRAN-2) on the GSTN portal.

- Some taxpayers had filed writ petitions in High Courts, while others had their cases decided by the IT Grievance Redressal Committee.

Arguments:

- Petitioners' Arguments:

The petitioners argued that they should be allowed to file or revise the relevant forms to claim the transitional credit, as they could not do so earlier due to technical glitches or other issues.

- Union of India's Arguments:

The Union of India agreed that taxpayers should be given an opportunity to claim the transitional credit, considering the peculiar circumstances and the judgments of various High Courts on the issue.

Key Legal Precedents:

The court did not cite any specific legal precedents in this case. However, it considered the judgments of various High Courts on the issue of allowing taxpayers to claim transitional credit under the GST regime.

Judgement:

The Supreme Court issued the following directions:

1. The GSTN is directed to open the common portal for filing concerned forms (TRAN-1 and TRAN-2) for availing transitional credit for two months, from September 1, 2022, to October 31, 2022.

2. Any aggrieved registered assessee is directed to file the relevant form or revise the already filed form, irrespective of whether the taxpayer had filed a writ petition before the High Court or whether their case was decided by the IT Grievance Redressal Committee.

3. The GSTN has to ensure that there are no technical glitches during this period.

4. The concerned officers are given 90 days thereafter to verify the veracity of the claims and pass appropriate orders after granting a reasonable opportunity to the parties.

5. The allowed transitional credit is to be reflected in the Electronic Credit Ledger.

6. If required, the GST Council may issue appropriate guidelines to field formations for scrutinizing the claims.

FAQs:

Q1. What is the significance of the court's decision?

A1. The court's decision provides relief to taxpayers who could not claim transitional credit for input tax paid under the previous regime due to technical glitches or other issues. It allows them to file or revise the relevant forms, even if they had previously filed writ petitions or their cases were decided by the IT Grievance Redressal Committee.

Q2. What is the role of the GSTN in this case?

A2. The GSTN has been directed to open the common portal for filing TRAN-1 and TRAN-2 forms to claim transitional credit for two months (September 1, 2022, to October 31, 2022). The GSTN must ensure that there are no technical glitches during this period.

Q3. Can taxpayers who had filed writ petitions or had their cases decided by the IT Grievance Redressal Committee claim the transitional credit?

A3. Yes, the court's order allows any aggrieved registered assessee to file or revise the relevant forms, irrespective of whether they had filed writ petitions or their cases were decided by the IT Grievance Redressal Committee.

Q4. What is the role of the GST Council in this case?

A4. The GST Council may issue appropriate guidelines to field formations for scrutinizing the claims for transitional credit filed by taxpayers.

Q5. What is the timeline for the concerned officers to verify the claims and pass appropriate orders?

A5. The concerned officers are given 90 days after the two-month window (September 1, 2022, to October 31, 2022) to verify the veracity of the claims and pass appropriate orders after granting a reasonable opportunity to the parties.

Permission to file Special Leave Petition(s) is allowed. Delay condoned.

Having heard learned Additional Solicitor General, learned counsel appearing for different States and learned counsel appearing for different private parties and having perused the record, we are of the view that it is just and proper to issue the following directions in these cases:

1. Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022.

2. Considering the judgments of the High Courts on the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (ITGRC).

3. GSTN has to ensure that there are no technical glitch during the said time.

4. The concerned officers are given 90 days thereafter to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties concerned.

5. Thereafter, the allowed Transitional credit is to be reflected in the Electronic Credit Ledger.

6. If required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims.

The Special Leave Petitions are disposed of accordingly. Pending applications, if any, also stand disposed of.