The Bombay High Court in its recent order in the case of Heritage Lifestyles and Developers and Private Limited has directed the Central Govt. / GST Department to accept the TRAN-1 and grant due Input Tax Credit (ITC) in the electronic credit ledger.
Facts of the case:
- The Petitioner, Heritage Lifestyles and Developers and Private Limited is engaged in the business of construction and development of real estate for the purpose of sale to prospective buyers and is registered as a dealer under the provisions of the Maharashtra Value Added Tax Act, 2002 (MVAT) as well as registered under the provisions of the CGST Act as a ‘service provider’ and also as “registered dealer”.
- The Petitioner submits that Section 140 of the CGST Act read with Rule 117 of the CGST Rules requires a migrated registered supplier to file a declaration in electronic form under Form TRAN–1 disclosing details of CENVAT credit of tax paid on inputs, capital goods, input services in order to carry forward the same to the electronic credit ledger/input tax credit account under the CGST Act, 2017.
- The declaration/form was required to be filed within a period of 90 days from the appointed date i.e. 01.07.2017, which time limits were extended to December 27, 2017, then to March 31, 2019, and finally to December 31, 2019.
- The said form TRAN–1 was notified in August 2017 and the online functionality to file the said form was deployed on the GST portal only on August 21, 2017.
- The Petitioner could not file GST TRAN-1 on or before 27.12.2017 but had manually applied for GST TRAN-1 on 7.5.2018 as per Circular dated 03.04.2018 within the timeline as per the date extended by this Court. Also the Respondents have found the Petitioner to be eligible for credit amounting to Rs. 78,62,466/-. But the credit for the same has been denied as the ITGRC found that the Petitioner has not tried to save or submit or file TRAN-1 before 27.12.2017.
- It is submitted by the Petitioner that upon inquiry about the form TRAN–1, the Petitioner was assured that sufficient time would be provided and further extension beyond 27th December 2017 would be granted as there were lots of other extensions taking place in the implementation of various modules/forms of GST.
Order of Bombay High Court:
The division bench of Justice Ujjal Bhuyan and Justice Abhay Ahuja held that as in this case the Respondents have found the Petitioner to be eligible for input credit amounting to Rs. 78,62,466/-, in our view the finding of the lT Grievance Redressal Committee (ITGRC) in the face of the admission by the Respondents to the amount of credit would be a mere technicality which cannot come in the way of substantial justice.
The court directed the Respondent Authority to accept the TRAN-1 filed by the Petitioner and to give the due of an input tax credit of Rs. 78,62,466 in the electronic credit ledger / input tax credit of the Petitioner within 2 weeks.
READ / DOWNLOAD ORDER:
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