GST update No 271 on return filing and revision due date of Tran1 cannot be same

The paradigm shift from erstwhile indirect tax regime to the GST regime and carrying forward of unutilised input tax credit was a roller coaster ride wherein the ambiguities and confusions prevailed in the minds of the taxpayers. There had been catena of cases wherein the High Court granted relief to the taxpayers on account of delay in filing of Tran-1. On similar lines, one case was reported before Madras High Court in the case of M/S INTERPLEX ELECTRONICS INDIA PVT. LTD. V/S THE ASSISTANT COMMISSIONER OF STATE TAXEX. The decision imparted in this case is subject matter of discussion of our present update.The petitioner sought a mandamus as regards carry forward of credit of Rs. 16,21,227/- and of Rs. 4,24,136/- to the electronic credit ledger. The petitioner claimed unutilised CENVAT credit as per returns for the month June 2017 and for service tax for the period from April 2017 to June 2017. As per Rule 117 of CGST Rule, 2017, the GST registrant was required to file declaration in Tran-1 within 90 days from 01.07.2017. The time limit was further extended taking into account the difficulty faced by the taxpayers. On parallel lines, Rule 120A provided a time limit for revision of Tran-1 which was inferred from the timelines set under Rule 117 of the CGST Rules, 2017. Therefore, it was submitted that the timelines equally apply on revision filing as well. The petitioner filed Tran-1 wherein error was detected since instead of Rs. 16,21,227/- it was mentioned Rs. 76,395/- and credit of Rs. 4,24,136/- was omitted. It was argued that a representation was filed seeking permission for availment of credit. The petitioner further questioned the wisdom since the last date for filing of Tran-1 and revision of Tran-1 being one and same. Reference was drawn to the decision of Divisional Bench of the Court in the case of COMMISSIONER OF GST & C. EX., CHENNAI SOUTH V/S BHARAT ELECTRONICS LTD. Further Reliance was placed on the decision of AMPLEXOR INDIA PVT. LTD. V/S UNION OF INDIA, BRAND EQUITY TREATIES LTD. V/S UNION OF INDIA AND OTHERS. The petitioner prayed that during the initialphase of implementation of GST, directions were issued in favour of petitioner for smooth flow. Another submission was the observation made by the Bench wherein it was held that claiming credit is not the vested right of the taxpayer.The respondent further relied on the decision of P.R. MANI ELECTRONICS V/S UNION OF INDIA. It was further argued that only recourse available to an assessee is challenging Rule 120A in absence of which no relief can be granted. Further reference was made to the decision of Apex Court in the case of UNION OF INDIA V/S BHARTI AIRTEL LTD. AND OTHERS wherein the decision of Delhi High Court was reversed. It was therefore argued that the timelinessunder CGST Act and Rules are sacrosanct and cannot be breached under any circumstances.The Court stated that the present case is on a different footing. The timeliness of seeking transition credit is mandatory. The point under consideration is whether the time limit of filing Tran-1 and seeking revision in the return can be one and the same. It was therefore, held that Rule 117 and 120A cannot be harmonized and viable in practicality. Itwas directed that time frame under Rule 120A must be period over and above the timeline prescribed in Rule 117 of CGST Rules, 2017. It was directed to reopen the portal within a period of 8 weeks such that revision may be sought.The above decision is a favourable decision concluding that there cannot be same time limits for filing original as well as revised return. It is very logical that the time limit for revision should be beyond the time limit prescribed for filing original return. It is worth mentioning that recently, hon’ble Supreme Court has allowed 2 months additional window from 1st September, 2022 to 31 October, 2022 in the case of UNION OF INDIA VERSUS M/S FILCO TRADE CENTRE PVT. LTD. AND ANR. [2022 LiveLaw (SC) 628]. Hence, reliefs as regards filing of TRAN-1 is being granted by the Courts. Furthermore, a miscellaneous application has also been reported to have been furnished by the Centre for the limited purpose for asking time extension of 60 days upto 31st December, 2022 to assure that the GST web portal would be effective to work in all fields for the execution of the order issued by the Supreme court .

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GST update No 271 on return filing and revision due date of Tran1 cannot be same

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