GST TRAN -1 Can be Filed Till 30.06.2020 irrespective of Retrospective Amendment in section 140 of the CGST Act

GST TRAN -1 Can be Filed Till 30.06.2020 irrespective of Retrospective Amendment in section 140 of the CGST Act

Landmark judgement passed by Delhi High Court on 16th June 2020 in the case of SKH Sheet Metals Compenents vs. Union of India & Ors.

The Delhi High court in the said order has directed the GST Authority to open an online portal to enable Petitioner to file revised declaration TRAN-1 electronically or manually on or before 30.06.2020to avail the short transitioning of ITC amounting to INR 5.5 crores (approx..) which crept on account of a clerical mistake to fill in the correct details in the right column.

It is held that in spite of the retrospective amendment in Section 140 of the CGST Act, 2017 its decision in case of Brand Equity Treaties Limited rendered on 05.05.2020 shall continue to apply.


  • Delhi High Court has in respect of writ petition filed by Brand Equity Treaties Limited and others had directed the Department to accept the TRAN-1 till 30.6.2020. The direction would apply to all those who could not file TRAN-1 and claim the input tax credit. The court has further directed that it should be advertised that all taxpayers who have not filed TRAN 1 can do so by 30.6.2020. The judgment has been made applicable to all irrespective of whether the taxpayer has approached the court or not. 
  • This judgment was overrided by amendment of Section 140 from retrospective effect w.e.f.01.07.2017 by Section 128 of the Finance Act,2020. made operative vide Notification No.43/2020-Central Tax dated 16th May, 2020.

GST TRAN -1 Can be Filed Till 30.06.2020 irrespective of Retrospective Amendment in section 140 of the CGST Act

Judgment of Delhi High Court

The Delhi High Court has given a hard-hitting judgement on the GST Authorities and the highlights of the order are as under:

  • The case before us demonstrates how the tax department has miserably fallen short of the expectation. It is regrettable that Respondents have failed to address the basic and fundamental problem faced by the Petitioner that occurred while filing a Form, seemingly on account of a bona fide or inadvertent mistake. Instead of offering a restitute solution, they have stonewalled all the attempts made by the Petitioner The injustice and prejudice caused to the Petitioner is profound and its disillusionment and despair are evident.
  • We have in a series of decisions, discussed as to how the advent of GST law created challenges for the taxpayers because of the lack of understanding of procedures provided therein.
  • The GST Council recognized that there could be errors apparent on the face of the record that could be non-technical in nature and merit leniency. In line with the spirit of the decision of the GST Council and the blurring thin line between technical and non-technical difficulty, keeping in view that entire filing is electronic, we find the restrictive applicability of Rule 117 (1A) to be arbitrary, as is demonstrated in the facts of the present case.
  • The transitional provisions and the language of section 140 of the Act in particular, even after amendment, manifests the intention behind the said provision is to save the accrued and vested ITC under the existing law. If the legislature has provided for saving the same by allowing a migration under the new tax regime, we have to interpret the rules keeping this objective in focus. This is the reason courts have held that CENVAT credit which stood accrued to the Petitioner is a vested right and is protected under Article 300A of the Constitution of India and could not be taken away by theRespondents, without authority of law, on frivolous grounds which are untenable.
  • Interpreting the procedural timelines to be mandatory would run counter to the intention of the legislature and defeat the purpose for which the transitionary provisions have been provided and have to be construed as directory and not mandatory.

  • TRAN-1 Form was filed within the stipulated period and revision thereof, to correct an error, will relate back to the said date of filing.The revision cannot be treated as a fresh filing , especially, keeping in view the spirit of the spirit of 32nd meeting of GST Council.
  • Delhi High Court in its order while expressing anguish and hitting hard the GST Department stated that “The case before us is one where there is a complete lack of understanding and fairness on the part of the Tax Department. The fact that Respondents have done nothing to solve the problem faced by the Petitioner, fueled with the adamant stand before us, contributes to the skepticism of GST technical infrastructure, which we feel should and can be easily avoided. Only if Respondents were to engage with the taxpayers with a genuine intention to solve the problems, confidence in the system can be built up and such matters would not reach courts,”
  • The Delhi High Court has in light of above adjudged that the Petition deserves to be allowed and Petitioner is permitted to revise TRAN-1 Form on or before 30.06.2020 and transition the entire ITC, subject to verification by the Respondents. The Court accordingly issued a writ mandamus to the Respondents to either open the online portal so as to enable the Petitioner to file revised declaration TRAN-1 electronically, or to accept the same manually.Respondents (GST Deptt.) shall thereafter process the claims in accordance with law.

GST TRAN -1 Can be Filed Till 30.06.2020 irrespective of Retrospective Amendment in section 140 of the CGST Act

With Regards

 CA CMA Anita Agarwal

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