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TMI Blog2019 (11) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and Service Tax Act, 2017 (hereinafter referred to as 'the CGST Act') read with rule 117 of the Central Goods and Service Tax Rules, 2017 (hereinafter referred to as the 'CGST Rules'). 4. The petitioner is inter alia engaged in manufacture of brass/steel/aluminum electrical wiring accessories, other articles of brass etc. and is registered under the CGST Act. Under the erstwhile Central Excise provisions the petitioner has three Central Excise registrations for its three factories located at Jamnagar. At the time of migration to GST regime, the petitioner had CGST transitional credit to be claimed/transferred to its GST electronic credit ledger in terms of sub-section (1) of section 140, sub-section (2) section 140 and sub-section (5) section 140 of the CGST Act. In terms of the provisions of section 140 of the CGST Act, post migration to GST, the petitioner was entitled for the input tax credit of the following: - Input credit of closing balance under ER-1. - Input credit of unavailed credit (balance 50%) of capital goods. - Input or input services in respect of which the supplier has already paid duty under the erstwhile Central Excise Act, 1944 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of sub-sections (1), (2) and (3) of section 140 of the CGST Act. 9. Rule 117 of the CGST Rules provides a mechanism to avail credit carried forward under any existing law or on goods held in stock on the appointed day. In terms of the provisions of subrule (1) of rule 117 of the CGST Rules, a registered person is entitled to take input tax credit under section 140 of the CGST Act within 90 days of the appointed day electronically, in FORM GST TRAN-1 which may be further extended for 90 days on the recommendation of the council. 10. The petitioner while filing FORM GST TRAN-1 provided details of balance credit amounting to Rs. 83,99,136/- under ER-1/ER-2 returns under column 5 of Table 5a and details of unutilized credit of capital goods amounting to Rs. 5,70,328/- and central excise duty on inputs and service tax on input services totally amounting to Rs. 2,93,727/- in respect of which the supplier has paid duty/tax under the erstwhile laws in column 6 of Table 5a. 11. The total amount of Rs. 8,64,055/- mentioned in column 6 were granted to the petitioner as transitional credit on 23rd December, 2017 in its electronic credit ledger. However, the amount mentioned in column ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under this Act; or (ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or (iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government." It was submitted that sub-section (1) of section 140 of the CGST Act clearly permits the assessee to carry forward cenvat available in the closing balance of the cenvat account of the registered person. It was pointed that the bar on carry forward of transitional credit of balance cenvat in ER-1/ER-2 return is only in the three conditions stipulated thereunder, whereas in the present case, the petitioner does not fall in any of the above-mentioned three conditions. It was contended that the petitioner has furnished all the returns required under the Central Excise Act and rules and the cenvat credit is not related to any goods which are cleared under any exemption notification, and, therefore, the restriction under section 140 of the CGST Act is not applicable in the facts of the present case and therefore, the petitioner is entitled to carry forward the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit inasmuch as merely not following the procedural conditions would not disentitle the petitioner of its substantive right of input credit. 14.4 It was next submitted that sub-rule (1) of rule 117 of the CGST Rules requires the registered person to submit a declaration electronically within 90 days from the appointed day in FORM GST TRAN-1 specifying the eligible amount of input credit. It was pointed out that the said time limit of 90 days has been extended from time to time, and the last extension was granted vide order dated 15th November, 2017 whereby the time limit was extended till 27th December, 2017. 14.5 Reference was made to rule 120A of the CGST Rules, which reads as under: "120A. Revision of declaration in FORM GST TRAN-1. Every registered person who has submitted a declaration electronically in FORM GST TRAN-1 within the time period specified in rule 117, rule 118, rule 119 and rule 120 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. It was submitted that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondents ought to have provided in the system itself a facility for rectification of errors which are clearly bona fide. The court further noted that although the system provided for revision of a return, the deadline for making revision coincided with the last date for filing the return i. e. 27th December, 2017. Thus, such facility was rendered impractical and meaningless. The court, accordingly, directed the respondents to either open the online portal so as to enable the petitioner therein to again file the rectified TRAN-1 form electronically or accept the manually filed TRAN-1 form with the correction on or before 31th July, 2019. 14.9 Reliance was also placed upon the decision of the Delhi High Court in the case of M/s Aadinath Industries v. Union of India, 2019(10) TMI 91, wherein the court followed its earlier decision in M/s. Blue Bird Pure Pvt. Ltd. vs. Union of India (supra), and further observed that the credit standing in favour of an assessee is property and the assessee could not be deprived of the said property save by authority of law in terms of article 300A of the Constitution of India. The court noted that no law was brought to its notice which extingui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions. 15.2 It was argued that the petitioner, after the expiry of approximately two months from the last date of filing FORM GST TRAN-1 viz. 27th December, 2017, had requested the department on 19th February, 2018, to correct the mistake in the declaration filed in FORM GST TRAN-1. It was submitted that as time to revise FORM GST TRAN-1 has already expired on 27th December, 2017, the petitioner cannot be permitted to amend FORM GST TRAN-1 on the portal. It was emphatically argued that wide publicity and awareness campaigns were run by the department informing taxpayers regarding filing and revision of declaration. 15.3 According to learned senior standing counsel, there is no provision under the CGST Act and rules to revise FORM GST TRAN-1 after the last date of revision i. e. 27th December, 2017. Hence, the correct filing of details in FORM GST TRAN-1 as per rule 117 of the CGST Rules is a substantial condition/requirement for claiming transitional credit under section 140 of the CGST Act and such credit cannot be claimed in absolute terms. 15.4 It was further submitted that the availment of transitional credit is dependent upon fulfillment of the conditions of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunicated the problem to the respondents only on 19th February, 2018 after the expiry of approximately two months from the last date, that is, 27th December, 2017, when the facility of revising FORM GST TRAN-1 had already been exhausted. Thus, it is due to the apparent mistake on the part of the petitioner, which has resulted in disentitlement to get transitional credit. It was submitted that the claim of input tax credit by the petitioner, although a substantive right, is not an absolute right and that the petitioner having failed to file the correct details within the prescribed time limit, is not entitled to any relief as claimed in the petition. It was accordingly urged that the petition being devoid of merits, deserves to be dismissed. 16. From the facts as emerging on record, it can be seen that in terms of rule 117 of the CGST Rules, FORM GST TRAN-1 was required to be filed within the prescribed time limit. Such time limit was extended by the Central Government from time to time and was lastly extended till 27th December, 2017. It is an admitted position that the petitioner had filed the FORM GST TRAN-1 within the time prescribed in the rules. However, as noted hereinabo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to again file TRAN-1 electronically or to accept a manually filed TRAN-1 on or before 31st May, 2019. The Petitioner's claims will thereafter be processed in accordance with law. 12. With a view to ensure that in future such glitches can be overcome, the Court directs the Respondents to consider providing in the software itself a facility of the trader/dealer being able to save onto his/her system the filled up form and also a facility for reviewing the form that has been filled up before its submission. It should also permit the dealer to print out the filled up form which will contain the date/time of its submission online. The Respondents will also consider whether there can be a message that pops up by way of an acknowledgement that the Form with the credit claimed has been correctly uploaded." 19. Following the above decision, the Delhi High Court in M/s Blue Bird Pure Pvt. Ltd. v. Union of India (supra), in the context of facts similar to the present case, held thus: "12. In the present case, the Court is satisfied that, although the failure was on the part of the Petitioner to fill up the data concerning its stock in Column 7(d) of Form TRAN-1instead of Column ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 8,64,055/- (which came to be allowed as it was correctly mentioned). The only reason for denying credit of such a huge amount of Rs. 83,99,136/- is that the time limit for filing a revised TRAN-1 form has elapsed on 27th December, 2017. 22. It may be pertinent to note that the last date of filing the FORM GST TRAN-1 was 27th December, 2017, which was also the last date for filing a revised FORM GST TRAN-1. In the present case, the petitioner filed the FORM GST TRAN-1 on 23rd December, 2017 and by the time it noticed the inadvertent error in filing the form, the last date for filing revised FORM GST TRAN-1 had elapsed. The stand of the respondents is that the last date for filing revised FORM GST TRAN-1 having elapsed, the petitioner is not entitled to transitional credit of such amount. 23. In this case, it is not as if the petitioner has not filed FORM GST TRAN-1 within the time provided by the respondents under the rules. The petitioner had filed the form, but on account of not properly understanding the nature of the columns provided in the form, due to inadvertent error, did not mention the details of Rs. 83,99,136/- in column 6 of Table 5a and instead uploaded the ..... 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