Macleods Pharmaceuticals LTD vs. Union Of INDIA

Held

The Court disposed of the writ petition with a direction to the respondents to consider the case of the petitioner-Company for amendment of the TRAN-1 form and pass appropriate orders within a period of three weeks from the date of the order. The reasoning was based on the communication placed on record by the respondents, which acknowledged a potential bonafide mistake by the petitioner in filing the TRAN-1 form. The communication highlighted that the petitioner had entered '0' in the field for 'CENVAT credit admissible as ITC', which was a non-entry in a relevant field rather than a wrong entry of an amount. This was considered an error apparent on the face of the record, and the request was deemed genuine. The Court's decision was influenced by the respondents' own assessment that the request may be considered favorably, referencing relevant circulars and office memorandums. The ratio decidendi is that where a bonafide mistake in filing a TRAN-1 form, particularly a non-entry in a crucial field, is identified and acknowledged by the revenue, and the taxpayer's request is genuine, the High Court can direct the revenue to consider the amendment favorably within a stipulated timeframe.

Facts

The petitioner, Macleods Pharmaceuticals Ltd., had a CENVAT credit balance of Central Taxes amounting to Rs. 7,51,33,423/- in June 2017. They also filed another TRAN-1 form for CENVAT credit of Rs. 14,71,031/-, which was credited to their Electronic Credit Ledger on October 26, 2017. The petitioner contended that due to the introduction of the Goods and Services Tax (GST) Act, they could not amend their TRAN-1 form as per the amended provisions. The writ petition sought a direction for the respondents to consider the petitioner's case for amendment of the TRAN-1 form. The respondents placed on record a communication dated May 9, 2019, indicating that the consideration of the petitioner's TRAN-1 form was under process and would be handled as per the amended GST Act.

Key Issues

1. Whether the petitioner should be permitted to amend their TRAN-1 form to carry forward their CENVAT credit balance, considering the introduction of the GST Act and alleged bonafide mistake in filing the form. Petitioner's contention: The petitioner argued that they could not amend their TRAN-1 form due to the introduction of the new GST Act and its amended provisions. They relied on the Punjab and Haryana High Court's decision in *Adfert Technologies Pvt. Ltd. vs. Union of India & Ors.*, which directed respondents to permit filing or revision of TRAN-1 forms. They sought a similar direction for their case. Respondents' contention: The respondents submitted a communication dated May 9, 2019, stating that the petitioner's TRAN-1 form was under consideration. This communication noted that the petitioner had filed '0' in the field for 'CENVAT credit admissible as ITC', leading to the non-posting of the credit to their electronic ledger. The communication suggested a bonafide mistake due to the nascent stage of GST and taxpayer unfamiliarity with the new system, recommending favorable consideration as per CBIC circular no. 39/13/2018-GST dated 03.04.2018 and Office Memorandum dated 28.03.2019.