Page No. 1/6 vs The State Of Assam And 3 Ors
2025 Latest Caselaw 3351 Gua

Gauhati High Court

Page No. 1/6 vs The State Of Assam And 3 Ors on 20 February, 2025

Author: Manish Choudhury

Bench: Manish Choudhury

                                                                        Page No. 1/6

GAHC010008822025




                                                                2025:GAU-AS:2460

                              THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                                Case No. : WP(C)/276/2025

            ABDUL BAREK
            S/O LATE NOMAZ ALI, R/O VILL- MANDIA PATHAR, P.O- MADIA, P.S.
            BAGBOR, DIST- BARPETA, ASSAM, PIN-781308

            VERSUS

            THE STATE OF ASSAM AND 3 ORS.
            REPRESENTED BY THE COMMISSIONER AND SECRETARY OF ASSAM,
            DEPARTMENT OF FINANCE AND TAXATION, DISPUR, ASSAM

            2:THE PRINCIPAL COMMISSIONER OF STATE TAX
             KAR BHAWAN
             G.S. ROAD
             DISPUR
             GUWAHATI-781006

            3:THE ASSISTANT COMMISSIONER OF STATE TAX
             BARPETA
             BARPETA UNIT

            4:THE SUPERINTENDENT OF STATE TAX
             BARPETA
             BARPETA UNI

Advocate for the Petitioner   : MR. A K GUPTA, MR. R S MISHRA

Advocate for the Respondent : SC, FINANCE AND TAXATION,

BEFORE HONOURABLE MR. JUSTICE MANISH CHOUDHURY

JUDGMENT & ORDER Date : 20.02.2025

Heard Mr. R.S. Mishra, learned counsel for the petitioner and Mr. H. Baruah, learned counsel representing Mr. B. Gogoi, learned Standing Counsel, Finance & Taxation Department for all the respondents.

2. The petitioner has instituted the instant writ petition under Article 226 of the Constitution of India on being aggrieved by alleged inaction on the part of the respondent authorities in verifying the claim of the petitioner regarding Transitional Input Tax Credit, as submitted by the petitioner already in Tran -1, on 28.11.2022.

3. The petitioner has stated that he has been in the business of trading in hardware goods and other ancillary items and he carries on business in the name and style of his sole proprietorship firm, M/s Ahmed Hardware. The petitioner was a registered assessee under the provisions of the Assam Value Added Tax Act. With the repeal of the Assam Value Added Tax Act and introduction of the Goods and Services Tax Regime with the enactments of the Central Goods and Services Tax [CGST] Act, 2017 / Assam Goods and Services Tax [AGST] Act, 2017 w.e.f. 01.07.2017, the petitioner got himself migrated to the GST regime by making an application, as prescribed. On being applied, the petitioner has been issued a Registration Certificate in GST REG - 06 vide Registration no. 18AGMPB0283E1ZO dated 11.08.2020.

4. Section 140 of the CGST/AGST Act has provided for transitional arrangements for input tax credit. As per Section 140, a registered person is entitled to take the benefit of unutilized input tax lying credited under the previous regime, so as to utilize it in discharge of CGST/AGST liability under the CGST/AGST Act.

5. According to the petitioner, the petitioner was having balance of unutilized input tax credit to the extent of Rs. 73,69,224/- under the Assam Value Added Act, [since repealed], as on 30.06.2017, and the said figure was also reflected in the monthly return submitted by the petitioner for the period of June, 2017.

6. Section 140 has provided for claiming input tax credit which remains unutilized under the previous regime, by filing a claim in the prescribed form, that is, either GST TRAN-1 or GST TRAN-2, as prescribed by Rule 117 of the CGST/AGST Rules. As per Rule 117, every registered person entitled to take credit of input tax under Section 140, within ninety days of the appointed day [01.07.2017], was required to submit a declaration electronically in Form GST TRAN-1, duly signed, on the common portal, specifying therein, separately, the amount of input tax credit of eligible duties and taxes to which he was entitled under the provisions of Section 140. As per the provisio to sub-rule [1] of Rule 117, the Commissioner may, on the recommendation of the GST Council, can extend the period of ninety days by a further period not exceeding ninety days.

7. With regard to the transitional provision, there were a number of litigations in various High Courts and finally, the issue came up for examination before the Hon'ble Supreme Court of India in a batch of Special Leave to Appeals including Special Leave to Appeal [C] no[s]. 32709-32710/2018 [Union of India and another vs. Filco Trade Centre Pvt. Ltd. and another].

8. The Hon'ble Supreme Court after hearing different States and others; and after examining the matter; found just and proper to issue a set of directions with regard to the matter of transitional provision. Accordingly, by its Order date 22.07.2022, the Hon'ble Supreme Court of India had issued the following directions :-

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. Subsequently on 02.09.2022, the Hon'ble Supreme Court has observed that the time for opening the GST Common Portal would be extended for a further period of four weeks from 02.09.2022.

10. In the backdrop of the Orders of the Hon'ble Supreme Court of India, dated 22.07.2022 and dated 02.09.2022, the respondent no. 2 had, at first, issued a circular vide Circular no. 129/2022 - GST dated 16.09.2022 and subsequently, another circular being Circular no. 130/2022 - GST dated 12.12.2022 laying down the guidelines for filing / revisiting TRAN-1/TRAN-2.

11. It is the case of the petitioner that subsequent to the Orders, dated 22.07.2022 and 02.09.2022, and the Circular dated 16.09.2022, the common portal was kept open from 01.10.2022 to 30.11.2022 for the registered assessees to submit TRAN-1 and TRAN-2 for availing transitional credit as per the provisions of Section 140 of the CGST/AGST Act. It is the further case of the petitioner that in terms of the above, the petitioner submitted TRAN-1 in the common portal on 28.11.2022 for availing transitional input tax credit of Rs. 73,69,224/-.

12. When the respondent authorities did not verify the claim of transitional input tax credit within the stipulated period of ninety days in terms of the directions laid down in the Order dated 22.07.2022, the petitioner has approached this Court by the instant writ petition.

13. By the directions made in the Order dated 22.07.2022, the Hon'ble Supreme Court of India had directed that the Goods and Services Tax Network [GSTN] should keep the common portal open for filing concerned forms for availing transitional credit through TRAN-1 and

TRAN-2 for a period of two months w.e.f. 01.09.2022 to 31.10.2022, initially by the Order dated 22.07.2022. The said period was extended up-to 30.11.2022 in terms of the subsequent Order dated 02.09.2022. The said fact is also evident from the Circulars, dated 16.09.2022 & dated 12.12.2022, issued by the respondent no. 2.

14. It is also an admitted fact that the petitioner submitted its claim in TRAN-1 in the common portal for availing transitional credit on 28.11.2022, as evident from the screenshot annexed to this writ petition as Annexure - G. The fact that TRAN-1 was submitted by the petitioner in the common portal is evident also from a Letter issued to the petitioner by the respondent no. 3 on 21.12.2022 whereby the petitioner was asked to submit the documents mentioned therein in respect of his claim made through TRAN-1. It is noticed that the petitioner submitted the documents to the respondent no. 3 in response to his Letter dated 21.12.2022 on 03.01.2023.

15. The learned Standing Counsel, Finance & Taxation Department has placed a Communication dated 18.01.2025 received from the respondent no. 3 in respect of the issue raised in this writ petition. In the said communication, the respondent no. 3 has admitted that the petitioner had submitted his application in TRAN-1 on 28.11.2022 for availing transitional input tax credit of Rs. 73,69,224/-. The respondent no. 3 has further admitted that due to technical problem, the Authorized Officer, at the relevant time, could neither accept nor reject the application in TRAN-1 within the stipulated time-period.

16. As per the directions made in the Orders, dated 22.07.2022 & dated 02.09.2022, of the Hon'ble Supreme Court of India and as acknowledged by the respondent no. 2 in its Circulars, dated 12.12.2022 & 16.09.2022, the GSTN had to ensure that there were no technical glitches during the period the common portal was to be kept open for availing transitional credit through TRAN-1 and TRAN-2, that is, up to 30.11.2022.

17. From the Communication dated 18.01.2025 placed on behalf of the respondent no. 3, it is evident that it was due to technical glitches the respondent no. 3 did not process the claim of the petitioner. It has been clearly directed in the Order dated 22.07.2022 and reflected in the Guidelines laid down in the Circulars, dated 12.12.2022 & 16.09.2022, that

the concerned Officer has to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits within a period of ninety days from the date of receipt of the application in the common portal, after granting appropriate reasonable opportunity to the parties. A mandate is also contained to the effect that if the applicant is entitled for transitional credit, the same should be reflected in the Electronic Credit Ledger.

18. In view of the facts emerged in respect of the case in hand, it is evident that there have been lapses on the part of the respondent authorities to adhere to the directions given for verifying the veracity of the claim/transitional credit and to pass appropriate orders thereon on merits after receipt of the claim in TRAN-1 and TRAN-2 and after granting appropriate reasonable opportunity to an applicant, if required.

19. In such obtaining facts and circumstances, this Court is of the clear view that the concerned Officer who is empowered to verify the veracity of claim/transitional credit made by the petitioner for transitional credit and to pass appropriate orders on merits, shall proceed to verify the veracity of the claim of the petitioner for transitional credit already submitted in TRAN-1 on 28.11.2022 in an expeditious manner. This Court is also of the view that the entire process of verifying the claim for transitional credit which the petitioner has made for an amount of Rs. 73,69,224/- in Tran-I, shall be processed to pass appropriate orders thereon on merits after affording reasonable opportunity to the petitioner within a period of one month from the date of receipt of a copy of this order from the petitioner. It is accordingly directed.

20. The writ petition is disposed of in the aforesaid terms. No cost.

JUDGE

Comparing Assistant