GST UPDATE ON REVISION OF TRAN-2 ALLOWED BY HIGH COURT 80/2020-21

GST has completed three years from the date of its implementation but yet we are struggling on the issue of carry forward of credit belonging to Pre GST regime. Extension of time limit to file TRAN-1 has been the topic of discussion amongst the professionals as many High Courts have provided reliefs to the assessees by allowing them to file TRAN-1, prominent amongst the decisions being that of M/s Brand Equity Treaties Pvt. Ltd. allowing all assessees to file TRAN-1 before 30.06.2020 by referring to the provisions of Limitation Act. The category of registered persons who are litigating the matter of transitional credit can be divided as follows:-

Those who were not able to file due to technical glitches.
Those who did not file due to ignorance.
Those who have wrongly filed and require the facility to revise.

In the recent days the concentration is laid on the first two categories wherein many decisions have been passed in favour of the assessees in spite of the fact that government has made a retrospective amendment in section 140 of the CGST Act, 2017. But, the majority of cases involve the issue of non- filing of TRAN-1. In this update we will discuss the decision of Hon’ble Calcutta High Court pronounced in the case of M/s Optival Health Solutions Private Limited pertaining to revision of the Form TRAN-2.
Before we proceed into the facts of the case, we shall have a quick understanding on who all were required to file TRAN-2. Form TRAN – 2 can be filed by a dealer/trader who has registered for GST, but was unregistered under the old regime. Such a dealer who does not have a VAT or excise invoice for stocks held by them on 30th June 2017, can use TRAN -2 to claim tax credit on the stock available with them. A manufacturer or service provider cannot file Form GST TRAN – 2. It has to be filed by a dealer or trader at the end of every month, when stock is sold reporting the details to claim input tax credit only for 6 months.
Coming to the facts of the case the petitioner had filed both Forms TRAN-1 & 2 within time but later on realised that TRAN-2 was wrongly filed. Therefore, the petitioner wanted to revise the TRAN-2. However, neither the Act/Rules nor the GST portal allow for rectification or revision of the Tran 2 so the petitioner has pleaded before the Calcutta High court to grant them appropriate relief.
The Hon’ble Calcutta High court held that the petitioner shall be allowed revise Form TRAN-2 either electronically or manually on the basis that law cannot take away the right of a person to explain his actions and correct them if he has valid proof. The Hon’ble High Court held that there is no ground on which the petitioner shall be denied the facility to revise the form.
To sum up, even in this case it was held that a person cannot be denied the substantial right of credit as it shall lead to violation of Article 14 of the Constitution. Moreover, when facility to revise TRAN-1 was allowed, there cannot be any reason for denying revision of TRAN-2. It is pertinent to mention here that the Hon’ble Delhi High Court has recently allowed revision of GSTR-3B in the case of M/s Bharti Airtel Ltd. Hence, the benefit of revision cannot be taken away for lack of express provisions in the statue.
This is solely for educational purpose.
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GST UPDATE ON REVISION OF TRAN-2 ALLOWED BY HIGH COURT 80/2020-21

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