GST authorities must allow revision of TRAN-1 form if time extended by Commissioner, rules Allahabad High Court.

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Case Name:

M/s. Ganpati Advisory Ltd. Vs. Union Of India (High Court of Allahabad)

Writ Tax No. 680 of 2019

Date: 27th May 2019

Key Takeaways:

- The court upheld Rule 120A of the CGST Rules, which allows revision of TRAN-1 form within the prescribed time or extended period allowed by the Commissioner.

- The Commissioner is the sole authority to extend the time for revising TRAN-1, not subordinate officers.

- The ruling provides clarity on the proper procedure for seeking time extension to revise transitional credit claims.

Issue:

Whether the application for extending the time period for submitting a revised FORM GST TRAN-1 electronically has to be decided by the Commissioner or can be decided by a subordinate authority.

Facts:

The petitioner, M/s. Ganpati Advisory Ltd., had filed the TRAN-1 form within the prescribed time but inadvertently did not include the CENVAT credit amount eligible as input tax credit (ITC). To rectify this, the petitioner tried to submit a revised TRAN-1 form. For this purpose, the petitioner moved an application dated 13.02.2019 before the Nodal Officer, CGST and Central Excise, Varanasi, as per the Commissioner’s circular.

Arguments:

Petitioner’s Argument:

Rule 120A of the CGST Rules allows revision of TRAN-1 form within the specified time or extended period granted by the Commissioner. Therefore, the application for time extension should be decided by the Commissioner.

Respondent’s Argument:

Not explicitly mentioned in the judgment.

Key Legal Precedents:

Rule 120A of the CGST Rules, 2017:

“…he may revise such declaration once and submit the revised declaration in FORM GST TRAN-1 electronically on the common portal within the time period specified in the said Rules or such further period as may be extended by the Commissioner in this behalf.”

Judgement:

The court held that as per Rule 120A of the CGST Rules, 2017, the application for extending the time period for submitting the revised FORM GST TRAN-1 electronically has to be extended by the Commissioner and not by any other subordinate authority. The Commissioner concerned was directed to ensure that the petitioner’s application for extension of time, submitted before the Nodal Officer, is called upon and appropriate orders are passed on it in accordance with law within one month.

FAQs:

Q1. What is the TRAN-1 form, and why is it important?

A1. The TRAN-1 form is used by taxpayers to claim transitional credit for taxes paid under the previous tax regime (like VAT, Service Tax, etc.) when migrating to GST. It is crucial for carrying forward legitimate credits to the GST regime.

Q2. Why did the petitioner need to revise the TRAN-1 form?

A2. The petitioner had inadvertently not included the CENVAT credit amount eligible as ITC in the original TRAN-1 filing. To rectify this error and claim the rightful credit, the petitioner needed to revise the TRAN-1 form.

Q3. What is the significance of the court’s decision?

A3. The court’s decision clarifies the proper procedure for seeking time extension to revise the TRAN-1 form. It upholds that the Commissioner is the sole authority empowered to grant such extensions, not subordinate officers, as per Rule 120A of the CGST Rules.

Q4. What happens next in this case?

A4. The Commissioner concerned has been directed to consider the petitioner’s application for time extension to revise the TRAN-1 form and pass appropriate orders within one month, in accordance with the law.

Q5. Does this decision have broader implications for GST compliance?

A5. Yes, this decision provides clarity on the interpretation of Rule 120A and the proper procedure for revising transitional credit claims under GST. It reinforces the importance of adhering to the prescribed rules and hierarchies within the GST framework.

Heard Sri Ashish Bansal, learned counsel for the petitioner and Sri Ramesh Chandra Shukla, learned counsel for the respondents.

The petitioner submitted FORM GST TRAN-1 on 23.12.2017 within the time prescribed.

However, it was noticed that due to some inadvertent mistake, the amount of CENVAT credit admissible as ITC was not filled up in the column due to which, the said credit is not being reflected in the electronic credit ledger.

In the above circumstance, petitioner tried to submit the revised declaration form in GST TRAN-1. The petitioner for the above purpose,

moved an application dated 13.02.2019 before the Nodal Officer, CGST and Central Excise, Varanasi as under the circular of the Commissioner such applications are to be dealt with by him.

Rule 120A of the CGST Rules, 2017 provides that where a registered dealer submits a declaration electronically in FORM GST TRAN-1 within the time period specified in Rule 117, Rule 118, Rule 119 and Rule 120 he may revise

such declaration once and submit the revised declaration in FORM GST TRAN-1

electronically on the common portal within the time period specified in the said Rules or such further period as may be extended by the Commissioner in this behalf.

In view of the above, the application for extending the time period for submitting the revised FORM GST TRAN-1 electronically has to be extended by the Commissioner and not by any other subordinate authority.

In view of the aforesaid facts and circumstances, as the petitioner has already submitted an application for extension of time, to submit the

revised FORM GST TRAN-1 to the Nodal Officer, the Commissioner concerned is directed to ensure that the aforesaid application so submitted by the petitioner before the Nodal Officer may be called upon by him and

appropriate orders are passed on it in accordance with law most expeditiously, if possible, within a period of one month from the date of production of a certified copy of this order before him. In the event, if the time is so extended by the Commissioner, the petitioner would submit the

revised FORM GST TRAN-1.

The present petition stands disposed of accordingly.

Order Date :- 27.5.2019

Ajeet