Pending Adjudication Not a Bar to Revised TRAN Filing: Andhra Pradesh HC allows Transitional Credit [Read Order]

The Andhra Pradesh High Court held that the Goods and Services Tax ( GST ) authorities could not reject revised filing of transitional credit forms on the ground that earlier proceedings regarding the same credit were pending. The Court found that the authorities had taken an incorrect view by relying on departmental instructions and directed that the transitional credit be permitted.

The petitioner, Mahavir Auto Diagnostics Private Limited, a dealer who migrated into the Goods and Services Tax regime on 01.07.2017, had been entitled to transition excise duty-paid credit under Section 140 of the Central Goods and Services Tax Act, 2017.

The petitioner was unable to upload Form TRAN-3 earlier, resulting in a show-cause notice and an adverse adjudication order dated 10.02.2023, which was later upheld by the appellate authority on 30.11.2023.

The Supreme Court in Union of India vs. Filco Trade Centre Pvt. Ltd. (2022) permitted taxpayers to file or revise TRAN declarations during a special extended period. The petitioner filed the required forms within this permissible window ending on 30.11.2022.

Master the Latest Amendments in Income Tax Act Click here

However, these forms were rejected by the department based on Guideline 4.7 of Circular No. 180/12/2022-GST dated 09.09.2022, which states that where adjudication of credit claims is pending, fresh submission of forms is not the appropriate course of action.

The bench comprising Justice R. Raghunandan Rao and Justice Sumathi Jagadam held that this rejection was unsustainable, as the situation contemplated in the circular did not apply to the present facts. The Court observed that there was no dispute regarding the availability of credit under the Excise Act, and the earlier proceedings only related to the petitioner’s inability to upload Form TRAN-3.

Therefore, in such circumstances, the bar contained in the circular could not be invoked to deny the filing made during the extended window.

The Court accordingly set aside the Order-in-Original dated 25.09.2023 and the Order-in-Appeal dated 30.11.2023, and directed the authorities to permit the transition of credit into the Goods and Services Tax regime. It was further directed that any demands raised as a result of the reversal of transitional credit would stand quashed.

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates