Bombay High Court
Colgate Palmolive (I) Ltd vs Union Of India And 2 Ors on 29 August, 2022
Bench: K.R. Sriram, Shri A. Doctor
Digitally
signed by
MUGDHA
MUGDHA M
M PARANJAPE
PARANJAPE Date:
2022.08.30 1 403-WP 2168-21.doc
10:25:21
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.2168 OF 2021
Colgate Palmolive (I) Limited ... Petitioner
Vs.
Union of India & Ors. ... Respondents
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Mr. Jitendra Motwani, Mr. Chirag Shetty, Mr. Rizwan Khatri for Petitioner.
Mr. Ram Ochani for Respondents.
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CORAM : K.R. SHRIRAM &
A.S. DOCTOR, JJ.
DATED : 29th AUGUST 2022
P.C. :
1. The Petition is filed in relation to the objections raised with
regard to transition and distribution of CENVAT Credit by Input Service
Distributor (ISD) of the balance of Service Tax/Excise Duty as on 30 th
June, 2017.
2. Since filing declaration in Form GST TRAN-1 was the only
route for transitioning of the accumulated CENVAT credit balance in the
ISD registration under the erstwhile service tax regime, Petitioner had
filed the declaration in Form GST TRAN-1 for transitioning the credit of
Rs.13,69,01,936/- under Section 140 of the CGST Act within the
prescribed time and in the prescribed manner.
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3. The transition of the aforesaid CENVAT credit was permitted
and the said balance of Rs.13,69,01,936/- got credited to the Electronic
Credit Ledger ("ECL") of the ISD registration on the GST common portal.
4. Petitioner issued the invoices to transfer the transitional credit
being accumulated ISD credit to its other units and further disclosed the
said transfer to the recipient units through Column 9 of Table 8 in Form
GST TRAN-1. Basis the same, the respective units availed the input tax
credit in its Electronic Credit Ledger by disclosing the respective amount
of ISD Credit transferred in its returns filed under GST in Form GSTR-3B.
5. Show Cause Notice F. No.03/JC/Dn.III/2019-20 [Centralized
SCN No.26/CGST-NM/JC/VR/2019-20] dated 18th June, 2020 has been
issued to Petitioner which is impugned in the Petition. The case of the
Respondents is that (i) Petitioner has wrongly transitioned the balance of
ISD credit in Form GST TRAN-1 as ISD is not eligible to carry forward its
balance credit to electronic credit ledger under Section 140(1) of the
CGST; (ii) Migration of ISD registration from the existing law to the GST
regime as an ISD is prohibited under GST; and (iii) the ISD has
transitioned credit with respect to invoices which were not received by it
prior to 30th June, 2017.
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6. It is Petitioner's case that there is no dispute with regard to
the eligibility of Petitioner to the claim and/or transition the aforesaid
Credit. The entire dispute only pertains to the procedure for transition of
the said CENVAT credit being balance of the ISD credit and its distribution
to the other units of Petitioner. It is not the case of the department, that
Petitioner has transitioned/distributed ineligible credit i.e. there is no loss
to revenue on account of the said transition/distribution of the credit.
Even for invoices received post 30th June, 2017, credit can be availed
under Section 140(7) of the CGST Act.
7. It appears that most of the procedural issues have arisen due
to the fact that the GST was at the nascent stage of its implementation and
there was a prevalent ambiguity with regard to the transitional provisions.
8. The Hon'ble Apex Court to aid the assesses to overcome the
procedural technical hurdles in the case of Union of India & Another Vs.
Filco Trade Centre Pvt. Ltd. & Another 1
and other similar batch of
Petitions in relation to the transition of credit from the erstwhile regime to
the GST regime by an order dated 22 nd July, 2022, has inter alia observed
as follows :-
1 2022 (7) TMI 1232
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"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."
9. We also intend to adopt the same approach. Therefore, we
hereby direct Respondents to open the common portal for filing concerned
forms for availing Transitional Credit through TRAN-1 and TRAN-2 for
two months, i.e., with effect from 1 st September, 2022 to 31st October,
2022 in compliance with the order of the Hon'ble Supreme Court of India
in Filco Trade (supra).
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10. Accordingly, Petitioner's recipient units can file revised
declaration in Form GST TRAN-1, either electronically or manually (where
electronically is not possible), for taking the credit already distributed to
them by the ISD registration of Petitioner by issuing invoices.
11. Once, such a revised declaration is filed by the concerned
recipient units of Petitioner, the credit already taken by the said units shall
be treated to have been taken validly on the date on which it was
originally taken. However, no further credit based on revised declaration
in Form TRAN-1 shall be claimed by Petitioner, as the said filing is purely
for regularizing the earlier action of transition and distribution of Cenvat
credit by the ISD registration of Petitioner.
12. In case the said credit is once again reflected in the Electronic
Credit Ledger of the recipient units, Petitioner undertakes that its recipient
units shall make a debit entry in the Electronic Credit Ledger to the extent
such credit has already been claimed earlier.
13. Once, the credit taken by the respective units is regularized by
filing revised electronic or manual declaration (as the case may be) in
Form GST TRAN-1, the credit balance shown in Electronic Credit Ledger of
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Petitioner being the balance of ISD credit transitioned shall be deemed to
have lapsed/deleted.
14. Respondents and the authorities concerned shall not proceed
to adjudicate the above impugned Show Cause Notice issued to Petitioner
for transition of ISD credit balance and its subsequent distribution.
15. Liberty to Petitioner to raise all other issues/contentions/
reliefs raised in this Writ Petition in the appropriate proceedings at
appropriate time, if need arises.
16. Petition disposed.
(A.S. DOCTOR, J.) ( K.R. SHRIRAM, J.)
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