Power Palazzo PVT LTD vs. Union Of INDIA Through Commissioner Of Central Goods And Services Tax

Held

The Court noted that the respondents did not dispute the petitioner's entitlement to transitional input tax credit. The IT Grievance Redressal Committee had observed that the procedure under the circular dated 03.12.2018 was applicable and that the concerned Nodal Officer should decide the issue. Subsequently, the learned Assistant Government Pleader for the State informed the Court that the Nodal Officer had addressed a letter to the authority in-charge of the portal, stating that the petitioner's claim to carry forward Cenvat credit is justifiable and recommended opening the portal for filing TRAN-1. In view of this development, the Court found no further adjudication on merits necessary. The exercise of opening the portal and allowing the filing of TRAN-1 was to be completed within two weeks.

Facts

The writ applicant, Power Palazzo Pvt Ltd, sought a direction from the Gujarat High Court to grant transitional input tax credit under Section 140 of the CGST Act, as claimed in GST TRAN-1. The petitioner contended that they had filed Form GST TRAN-1 within the stipulated time and that tax credit is a vested right. The respondents, Union of India and the State, did not dispute the petitioner's entitlement to the credit. The IT Grievance Redressal Committee had considered the matter, noting that the procedure under a circular dated 03.12.2018 was applicable and that the case should be decided by the concerned Nodal Officer. The Court had previously directed the respondents to resolve the issue. On the final hearing date, the State's counsel informed the Court that the Nodal Officer had recommended opening the portal for the petitioner to file TRAN-1, deeming the claim justifiable.

Key Issues

1. Whether the petitioner is entitled to transitional input tax credit under Section 140 of the CGST Act, 2017, despite potential procedural issues in filing Form GST TRAN-1? The petitioner argued that tax credit is a vested right and that they had filed Form GST TRAN-1 within the stipulated time. They contended that the respondents were unjustified in denying the claim, especially when the error was not a defined technical glitch, and relied on Supreme Court decisions in Eicher Motors Ltd. v. Union of India and Collector of Central Excise, Pune v. Dai Ichi Karkaria Ltd. to support the proposition that a right accrues to the assessee upon payment of tax on inputs. The revenue/State argued that the IT Grievance Redressal Committee had not rejected the petitioner's case but observed that the procedure laid out under a circular dated 03.12.2018 of CBIC was applicable, and the issue required decision by the concerned Nodal Officer following the prescribed process. They stated that the matter was not forwarded correctly to the GSTC Secretariat.