Jigar Cars PVT. LTD. vs. Union Of INDIA

Held

The Court held that the petitioners should not be made to lose the benefit of deemed transitional tax credit for supplies made from August to December 2017 solely due to an inadvertent and bonafide typographical error in the Form GST TRAN-2 filed for July 2017. The Court found that the substantive right of the petitioners to claim transitional credit should not be denied on account of such an error. The Court relied on its previous judgment in Jakap Metind Pvt. Ltd. vs. Union of India, which dealt with a similar inadvertent error in Form GST TRAN-1. The ratio of that judgment, emphasizing that bona fide errors should be rectifiable, was applied to the present case concerning Form GST TRAN-2. The Court directed the respondents to either open the online portal to enable the petitioners to file a rectified Form GST TRAN-2 for July 2017 and the subsequent Forms for August to December 2017 electronically, or to accept the manually filed Forms with necessary corrections. The respondents were also directed not to raise any objection regarding the time limit for filing these forms.

Facts

The petitioners, Jigar Cars Pvt. Ltd., engaged in car and spare parts distribution, were not registered under the Central Excise Act but dealt with excise-duty-laden goods. They sought to claim transitional tax credit under Section 140(3) of the GST Act. After filing Form GST TRAN-1, they needed to file Form GST TRAN-2 for deemed credit for supplies made from July to December 2017. While filing TRAN-2 for July 2017, a typographical error occurred where the entire stock on hand as of July 1, 2017, was mistakenly shown as supplied, resulting in a zero closing stock. This error prevented the auto-population of opening stock for subsequent months, blocking the filing of TRAN-2 for August to December 2017 and the claim of deemed transitional credit. The petitioners' repeated representations to the authorities for rectification were unsuccessful, leading to the present writ-application.

Key Issues

1. Whether the petitioners are entitled to rectification of the inadvertently erroneous Form GST TRAN-2 filed for July 2017 and to file subsequent Forms GST TRAN-2 for August to December 2017 to claim deemed transitional tax credit, despite the expiry of the stipulated time limits? (Section 140(3) of the CGST Act, 2017). Petitioner's arguments: The petitioners contended that the error in Form GST TRAN-2 for July 2017 was a bonafide typographical mistake. They argued that they should not be deprived of their substantive right to claim transitional credit due to such an inadvertent error, especially when the system did not provide a facility for rectification. They relied on the principle that retention of credit to which they are entitled would violate Article 265 of the Constitution. Revenue's arguments: The judgment records no specific arguments from the respondents.