A long-awaited judgment passed by the Hon’ble Supreme Court on 22.07.2022 in the matter of Union of India & Anr.Vs. Filco Trade Centre Pvt. Ltd. & Anr. in Petition (s) Special Leave to Appeal (C) No.(s) – 32709 – 32710/2018, disposing of batch of around 400 appeals.  The Hon’ble Court through this order, directed GSTN (Goods and Service Tax Network) to open the Common portal from 01.09.2022 to 31.10.2022 to allow the assessees for filing concerned forms for availing Transitional Credit through TRAN-1 & TRAN-2.

That large number of assessees while carrying forward the amount of Input Tax Credit (CENVAT Credit in the erstwhile regime) faced various issues and ultimately could not transfer the amount of credit lying unutilized on 30.06.2017, to the GST regime.  As per Section 140 of the CGST Act, 2017, the taxable person was allowed to carry forward the credit of eligible duties (provided other conditions), however many assessees could not carry it forward due to technical glitches at the portal, or in many cases it accrued after the cut-off date of filing TRAN-1 i.e., 27.12.2017 giving rise to the peculiar situations, or it could not be carried forward due to any mistake committed by the assessee in filing the concerned forms or not following the procedures.

That the CENVAT Credit being vested right of the assessee, the issue has now been taken up by the Hon’ble Supreme court to give relief to the large number of assessees, by providing the opportunity to file or revise TRAN -1 & TRAN – 2.

The Hon’ble Supreme Court considering overall situation with respect to transitional Input Tax Credit, prevailing in the industry, in the country and the cases pending or disposed of the various High Courts, wherein the assessees could not transfer/carry forward the amount of unutilized credit to GST regime due to technical glitches on the portal or peculiar facts involved in the case, or due to small procedural errors committed at their end, passed the present order giving relief to those assessees. The Hon’ble Supreme Court while passing the order directed as under: –

Having heard learned Additional Solicitor General, learned counsel appearing for different States and learned counsel appearing for different private parties and having perused the record, we are of the view that it is just and proper to issue the following directions in these cases:

1. Goods and Service Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022.
2. Considering the judgments of the High Courts on the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (ITGRC).
3. GSTN has to ensure that there are no technical glitch during the said time.
4. The concerned officers are given 90 days thereafter to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties concerned.
5. Thereafter, the allowed Transitional credit is to be reflected in the Electronic Credit Ledger.
6. If required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims.

 The Hon’ble Supreme Court with the above directions disposed of the Special Leave Petitions.

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